The U.S. civilian air ambulance industry has grown steadily since the first programs were established in the 1970s, but the industry underwent significant change in 2002. That’s when the Centers for Medicare and Medicaid Services began phasing in a national fee schedule for air ambulance providers, part of a series of Medicare payment reforms mandated by the Balanced Budget Act of 1997.
As described in a 2010 report by the Government Accountability Office, prior to 2002, Medicare reimbursement differed depending on the air ambulance provider’s business model: hospital-based providers were reimbursed based on reasonable costs (and generally received higher reimbursement), while independent, community-based providers were reimbursed based on reasonable charges (and received less). The new fee schedule established a single rate for helicopter transports regardless of the business model followed; although it provided for higher reimbursement for transports in rural areas, it did not make provisions for the type of aircraft used, or the level of medical or safety equipment on board.
The new fee schedule incentivized the expansion of community-based providers flying smaller, cheaper helicopters, and that is exactly what happened. According to ADAMS, in 2003, there were 545 helicopter air ambulances in the U.S.; today, there’s almost twice that number. Meanwhile, the composition of the fleet has shifted from 41 percent single-engine and 59 percent twin-engine in 2004, to 51 percent single-engine and 49 percent twin-engine in 2014.
Helicopter Ambulance in the United states