The cost of air ambulance services in workers’ compensation has risen dramatically, with average payments per transport increasing more than 60% over the past decade, from roughly $15,000 to more than $25,000, according to a new report from the Workers Compensation Research Institute.

The findings highlight a growing cost pressure for employers and insurers, particularly in states with limited regulatory authority over air ambulance pricing. By 2024, air ambulance services accounted for nearly half of all ambulance transport payments in the workers’ compensation system, the WCRI said.

Rural Workers Bear the Brunt of Air Ambulance Use

While air ambulance transport remains relatively rare overall — occurring in about 0.29% of claims with more than seven days of lost time — usage is heavily concentrated in rural areas, WCRI found. Roughly 1 in 100 rural workers with significant lost time required air ambulance transport, compared with just 0.16% of workers in urban areas. In very rural locations, the rate climbed to 1 in 60 workers, underscoring the role geographic isolation plays in emergency medical transport decisions.

The type and cause of injury also influenced air ambulance utilization. Workers with burns and other skin conditions, leg fractures, and lacerations were most likely to require air transport. Among causes, motor vehicle injuries and burns stood out , with more than 5% of rural workers with those injury causes received air ambulance services, according to the report.

Despite concerns about rising costs, the overall rate of air ambulance use has remained largely stable since 2015, hovering between 1.0% and 1.2% of rural claims with more than seven days of lost time, WCRI found.

Costs Vary Dramatically by State

Perhaps the most striking finding is the enormous state-by-state variation in air ambulance payments, WCRI noted. In the 2022–2024 period, the average payment per air ambulance transport ranged from roughly $10,000 in Texas to more than $58,000 in California, the report said. The typical study state averaged around $30,000 per transport.

The regulatory environment plays a central role in explaining these disparities. Air ambulance providers have argued that the federal Airline Deregulation Act classifies them as air carriers, exempting them from state workers’ compensation fee schedules. Some states have pushed back, asserting their authority to regulate medical costs within their systems.

Texas and California illustrate the divergence. Texas applies its fee schedule to air ambulance services and has benefited from a state Supreme Court ruling that insurers need not pay the full billed amount if charges exceed a “fair and reasonable” standard. California, by contrast, explicitly exempts air carriers from its ambulance fee schedule, effectively tying payments to provider charges, which results in higher average costs, according to the report.

Growth in payments over time also varied widely. Average payments per air ambulance transport more than doubled in Indiana (112%), Iowa (108%), and California (108%) between the 2013–2015 and 2022–2024 periods. Meanwhile, a handful of states saw payments decline, including South Carolina (-47%), Illinois (-15%), and Texas (-13%), WCRI found. Fourteen of the states studied experienced increases of more than 50%, and nine saw growth exceeding 80%.

Utilization Rates Differ Sharply Across States

Texas led all 32 study states in air ambulance utilization, with 3.5% of rural workers with significant lost time requiring air transport, which was more than four times the rate in the typical study state, the report said. The state’s vast rural landscape and long distances between injury sites and medical facilities likely contribute to the elevated use.

Southern and western states generally showed higher utilization rates than other regions, a pattern WCRI attributed to greater distances to trauma care facilities and regional differences in the availability of ground-based emergency services.

The report noted that the regulatory landscape remains unsettled in many states, leading to ongoing litigation over air ambulance reimbursements. For risk managers and insurers, the combination of rising costs, wide pricing variation, and legal uncertainty presents a challenge that shows few signs of easing.

Obtain the full report here. &