US Congress and Government Help for Air Ambulance
It is but in the interest of Air Ambulance companies to take help from the Government.
What is often lost in mainstream media coverage of the U.S. air medical industry is the fact that the industry has more than one operating model. While many for-profit, community-based air medical operators are locked in battle with patients and insurance carriers, other providers simply are not. Boston MedFlight chief financial officer Maura Hughes said the service has a “great” relationship with insurance companies. “They know our patients are sick,” she explained. “We don’t have claims denied based on medical necessity.”
Boston MedFlight is a unique example of an air medical transport service: a nonprofit program funded by a consortium of otherwise competitive medical centers. For 30 years, Boston MedFlight has operated with the mission to “provide the right vehicle to the right patient at the right time, and transport them to the right facility.” Often, the right vehicle is a ground ambulance; the service reserves transports in its S-76 and Airbus Helicopters EC145s for those patients who would benefit from them the most.
“Our acuity is among the highest in the country,” observed CEO and medical director Suzanne Wedel. “We’re not doing transports that other services — for example, ground ALS — could do just to add to our numbers.” By contrast, a 2009 review by the Arizona Department of Health Services found a significant amount of inappropriate utilization among trauma patients transported by air ambulance in that state: 43 percent were discharged to home from the emergency department within 24 hours, and 88 percent had non-life-threatening injuries (as defined by a probability of survival greater than 90 percent).
While Boston MedFlight has adhered to the highest clinical and aviation standards and maintained positive relationships with its payors, it’s also true that the service loses money each year — as do many hospital-based and nonprofit programs around the country. The hospitals in the consortium continue to support Boston MedFlight because they see it not as a profit center, but as a cost center that serves a valuable role in the longitudinal continuum of a patient’s treatment. “Would we like to be paid more? Of course; we’re a high clinical acuity service, with significant investment in our aviation technology and training,” said Wedel. “But if you’re just focusing on the transport piece, you’re missing a lot of the patient experience and the cost of delivering care.”
The narrow focus on transport reimbursement is why many nonprofit and hospital-based air medical providers are skeptical of House Bill H.R. 822 and Senate Bill S. 1149 — twin bills, championed by AAMS, that are now under consideration by Congress. The bills would require air medical providers to report cost data, which would eventually be used to set Medicare reimbursement rates that accurately reflect the cost of providing air medical transports. In the meantime, the bills would increase Medicare reimbursement rates by 20 percent immediately, and by five percent each subsequent year until the new, cost-based guidelines are adopted. The House bill would provide a rate boost beginning in 2016; the Senate version would commence rate hikes in 2017, and would require the increased expenditures to be budget-neutral.
“Today’s reality is for every 10 patients flown, two may pay nothing at all (uninsured) and five are on government insurance like Medicare and Medicaid, neither of which pay close to the cost of an average transport (underinsured),” AAMS’ Blair Beggan wrote in an email to Vertical. “Our efforts on Medicare are solely focused on ensuring the Medicare pays a fair price for the cost of the services provided.”
It’s true that Medicare reimbursement rates, which since 2002 have only been adjusted by inflationary updates averaging 2.2 percent a year, no longer come close to covering the current costs of most air medical transports. Moreover, the increases proposed by H.R. 822 and S. 1149 would benefit all providers, including nonprofit services like Boston MedFlight. However, the biggest beneficiaries would be those for-profit, community-based providers who benefited the most from the original changes to Medicare reimbursement. And the legislation doesn’t consider the relationship between the cost per transport and volume of transports — which could encourage providers to pump even more helicopters into an already crowded market. “If this is such a bad business, then why do we have more and more suppliers?” observed LifeFlight of Maine’s Tom Judge. “The industry has created all of its own cost problems.”
Beggan countered that AAMS does not expect to see significant further growth in the number of helicopter air ambulances, but does anticipate growth in their number of flight hours. “It is readily apparent that the need for air medical transport will only increase over time,” she explained. “Air medical transport continues to fill a growing gap in the healthcare system in the U.S. As trauma centers and rural hospitals continue to close their doors, EMS helicopters are the means to move critically ill and injured patients to the medical facility best suited to treat their condition in a timeframe that can make a significant difference in their clinical outcomes.”
Beggan said that AAMS is optimistic about the prospects for H.R. 822 and S. 1149, citing “a number of productive conversations with the committees and our congressional supporters who serve on those committees.” When he’s speaking on the record to Air Methods investors, Aaron Todd is also optimistic about the proposed legislation (which hasn’t stopped Air Methods from recently diversifying into aerial tourism).
But the legislation faces some fundamental hurdles. As Boston MedFlight’s Maura Hughes observed, “Everyone knows we’re spending too much money on healthcare in this country.” Air Methods had over $1 billion in revenue last year, and AAMS’ supporters in Congress will have to make a plausible case for why the company and its competitors deserve even more.