One year ago, EP Monthly published a feature examining the exorbitant fees frequently charged to patients by the helicopter air ambulance (HAA) industry. Response to the piece was spirited, to say the least, particularly from for-profit HAA companies. The largest of these companies, Air Methods, subsequently reached out to EP Monthly to clarify their billing practices. Additionally, legislative developments have transpired on the federal level since publication of that original article. The following update highlights some of the recent and welcome changes from corporations and politicians alike on the complex issue of HAA costs to patients.
BACKGROUND
For full background on the economic and policy factors affecting HAA billing, please see the initial EP Monthly article “Navigating the Turbulent Skies.”[1] HAA transport has grown increasingly frequent and increasingly expensive in recent years. In particular, for-profit HAA companies tend to charge more than non-profit companies and tend to balance bill patients for large sums not covered by commercial insurers. State and local actions against these billing practices are prohibited by the federal Airline Deregulation Act of 1978. As a result, patients can have their lives saved by HAA transport only to have their finances devastated by the subsequent charges.
PATIENT ADVOCACY PROGRAM
Karen Espinosa’s case from Florida illustrates many of the problems and complexities in HAA patient billing. On the morning of April 20, 2017, Mrs. Espinosa suffered sudden onset, complete right-sided hemiplegia and aphasia. EMS activated a stroke alert, and by Florida state statute mandating that all stroke alert patients receive the fastest available transport to a stroke center, Mrs. Espinosa was flown by an Air Methods crew to her regional stroke center, where she underwent successful left MCA thrombectomy with essentially full neurologic recovery. Her husband states that there was no discussion of pricing or insurance coverage at the time of transport; his wife was simply hot-loaded onto the helicopter. Two months later, Mrs. Espinosa and her husband received the Air Methods bill for $53,000. Their insurer, CIGNA, covered only $10,000 of the bill, leaving the Espinosas with the remaining tab of $43,000, a prohibitive sum that they would not have been able to pay.[2]
The same year Mrs. Espinosa suffered her stroke, Air Methods created an internal division known as the Patient Advocacy Program (PAP). According to Chris Meyers, executive vice-president of reimbursement for Air Methods, a PAP representative will reach out to the patient and/or family at the time of Air Methods’ initial billing contact and will offer support in filing reimbursement appeals to the patient’s insurance company.[3]
Provided that the patient/family actively participates in this process until the insurance company maximizes its reimbursement for the transport, Air Methods will waive any remaining unmet portion of the bill. In other words, the patient and/or family will not be held liable for any balance billing.[3] In the Espinosa’s case, working with their PAP representative, they underwent five rounds of appeals with CIGNA over a four-and-a-half month period before CIGNA finally paid 100% of the transport cost, leaving the Espinosas with no out-of-pocket expense for her $53,000 helicopter ride.[2]
PAP’s financial strategy is clear — maximizing billing reimbursement on the commercially insured out-of-network patients that Air Methods transports. Balance billing is a problem only for commercially insured out-of-network patients, as Medicare/Medicaid patients and commercially insured in-network patients are immune from it. Meyers notes 30% of Air Methods’ patients are commercially insured and that Air Methods is currently in-network for only 30% of commercial insurers nationwide. This leaves the company transporting a significant number of commercially insured out-of-network patients, more than 90% of whom now participates in PAP. As a result of this PAP participation, these patients’ average out-of-pocket expense for a flight has fallen to just $300-400.[3] Myers did not disclose the effects of PAP on Air Methods’ revenue, but one can imagine the program leads to improved collections from insurers and thus improved profit margins for the company.
LEGISLATIVE UPDATE
In addition to these private corporate strategies, federal legislative progress over the past year promises substantial changes to the HAA billing environment. At the time of our previous article, three HAA-related proposals were under consideration across the U.S. House and Senate (SB 471, HR 3780, and HR 3378). None of these three bills made it out of committee
However, one measure that did pass and was signed into law in October 2018 is Section 418 of the FAA Reauthorization Act of 2018, which directs the Department of Transportation and the Department of Health and Human Services to convene an advisory committee to “review options to improve the disclosure of charges and fees for air medical services, better inform consumers of insurance options for such services, and protect consumers from balance billing.”[4] This Air Ambulance and Patient Billing (AAPB) Advisory Committee will include representatives from across the industries of healthcare, insurance, consumer protection and air ambulances.[4] Although the committee has not yet met or released any recommendations,[5] one hopes that its broad representation across related industries will lead to effective and long-lasting policy reform.
IMPLICATIONS
These industry updates impact our patients and us as emergency physicians. The Air Methods PAP does nothing to address the substantial cost differential between non-profit and for-profit HAA flights; if anything, it simply enables Air Methods to continue charging enormous fees for their service. Myers justifies this cost gap by saying, “Unlike non-profit carriers, Air Methods is not subsidized by the hospital,” implying that non-profit HAA groups can charge their lower rates solely because the hospital can offset the comparatively cheap non-profit transport with the revenue from the patient’s subsequent inpatient course.
Alternatively, one can examine Air Methods’ annual report for 2016, the last year in which the company was publicly traded, and note a net income of nearly $98 million,[6] an amount which might also account for their higher patient charges. Which of these two explanations one finds acceptable will likely depend on whether one views healthcare as a free market to be exploited or a universal human right to be shared by all. Regardless, in the short term, the PAP does take the noble and laudable step of removing patients from the financial battles between HAA and insurance companies. In the long term, the AAPB Advisory Committee will hopefully yield evidence-based, fair, and sustainable policy reforms for the HAA industry as a whole.
What does all of this mean for the emergency physician on their next shift? Previously, we recommended that the physician familiarize themselves with the billing policies of HAA companies in their area, and this advice remains sound. Preferentially calling non-profit companies is still in the financial interest of one’s patients, but if a non-profit carrier is unavailable, then perhaps the next best option is a for-profit company offering programs such as PAP. And of course, emergency physicians should remain active in contacting their congressional officials to support legislative efforts that they feel will most protect their patients.
CONCLUSION*
HAA costs to patients remain a complex and potentially financially devastating reality across the country, but positive changes appear to be taking shape. While the slow machine of federal politics has introduced some promising legislation to study HAA issues in greater detail, some corporate entities have taken internal steps to mitigate direct costs to patients. Emergency physicians must continue to monitor these policy and business developments to ensure that our helicopter aeromedical system remains viable and affordable to all of our sickest patients.
*Note that Air Methods provided no funding for this article and had no editorial influence over its contents or arguments beyond the factual data of Mrs. Espinosa’s case and the PAP.
REFERENCES
- Schwartz JT & Trimarco TW. Navigating through the turbulent skies. EP Monthly, Sept 2018.
- Espinosa K & Espinosa A. Personal communication, 8 March 2019.
- Myers C. Personal communication, 20 March 2019.
- US Department of Transportation. Air ambulance and patient billing advisory committee. Available at transportation.gov. Updated 17 April 2019. Accessed 25 July 2019.
- National Association of Insurance Commissioners. Air ambulances. Available at naic.org. Updated 28 May 2019. Accessed 25 July 2019.
- Air Methods. Form 10-K, Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, for year 2016. Available at airmethods.com. Accessed 15 Aug 2019.