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CNN: Sky-high prices for air ambulances hurt those they are helping

Sky-high prices for air ambulances hurt those they are helping


Sonna Anderson was enjoying a horseback ride through the Badlands in North Dakota in September 2017 when her horse, Cody, got spooked, jerked toward a fence and tripped on a cow track in the dirt. The horse rolled onto Anderson, who hit her head, briefly lost consciousness and broke three ribs.
The 911 transcript shows that an ambulance reached the 60-year-old judge from Bismarck within 20 minutes. Anderson was secured on a backboard and ready to go when an air ambulance, a helicopter with a medical crew, also landed at the scene. Anderson says her husband asked repeatedly whether the ground ambulance crew could take her by ground; there was a hospital less than an hour’s drive away.
“But he was told that [the air ambulance] was necessary. They never told him why it was necessary or how much it cost, but they insisted I had to go by air ambulance,” Anderson said. “But it’s so odd there is nothing in the record that indicated it was time-sensitive or that I needed to be airlifted.”
For that one helicopter ride, to a hospital farther away in Bismarck, records show that Valley Med Flight charged Anderson $54,727.26. Sanford Health Plan, her insurance, paid $13,697.73. That left Anderson with a $41,029.53 bill.
Valley Med Flight did not respond to requests for comment.
“It shocked me,” Anderson said. “I kept thinking, ‘my God.’ I got a copy of the 911 and air ambulance report to see how long they actually spent with me, when really, it was only around 45 minutes. I wrote [the air ambulance company] a letter telling them that I thought it was all outrageous.”

Shared outrage

Anderson is not alone. CNN reached out to every state’s insurance regulatory office. Nearly every one said it has heard from patients like Anderson, and complaints about air ambulance bills have “increased rapidly,” according to the Mississippi commissioner of insurance.
Charges vary wildly. CNN saw bills ranging from nearly $34,000 to more than $533,000.
A 2017 federal investigation found that costs for an average air ambulance flight doubled between 2010 and 2014. Some states saw even bigger increases. New Mexico bills went up 229% between 2006 and 2015, a state investigation found.
Each state’s law varies in what can be disclosed about these complaints due to its interpretation of patient privacy. In some cases, CNN could see details about the patient’s condition, how far and where they were flown, how much they were charged, how much insurance paid and the nature of the complaint. Some states released much less. Some would acknowledge only that there had been complaints. However, it’s clear that these bills can be devastating for families.
One complaint sent to the Michigan insurance office says a family flew a dying relative home after he got sick in Arizona. To get him to a hospice in Michigan cost $547,725.
It cost another family $62,749.35 to fly a child with a malignant brain tumor from Wisconsin to Houston to see a specialist.
But these high prices aren’t just for cross-country flights. An air ambulance transferred a man from a hospital in Winter Haven, Florida, to one in Orlando for tests, which would be a one-hour drive. The complaint to the Michigan insurance office about that Florida flight said the family faced a $31,253.33 bill.
$4,680 bill for air ambulance hits 17 years later 02:02
Emergency personnel requested another hospital-to-hospital transfer in Arkansas for an X-ray. It cost $37,850, according to a letter to the state insurance department.
“We carry insurance to avoid the catastrophic situations,” wrote the man, whose name was redacted. “I don’t see where the consumer is getting a fair shake in this deal.”
The desire may be there for change, but nothing’s worked.
Patients have tried. Dogged by bill collectors, hundreds have turned to the courts. Few consumers have found help, research shows.
Insurance commissioners’ offices and insurance associations have tried to help: sending letters, pleading with Congress to do something about “unreasonably high and unregulated rates,” as one Mississippi insurance commissioner put it. Yet standalone legislation, even with bipartisan backing, has gone nowhere.
The price of these flights is not regulated by Obamacare. Instead, they fall under the 1978 Airline Deregulation Act, which removed a state’s ability to control airfares and routes long before air ambulances were common. October’s Federal Aviation Reauthorization Act created a committee to address the problem, but it failed to design a definitive solution, experts say.
States have also tried. North DakotaWest Virginia and Texas passed legislation to limit costs but were stymied by the courtsConsistently, judges conclude that air ambulance regulation is a federal, not state, matter due to the Airline Deregulation Act.

Air ambulances take off

Air ambulances became necessary out of a desperate need to save lives, but some question whether their value remains.
In 1966, civilian deaths from accidental injuries were “a public health problem second only to the ravages of ancient plagues or world wars,” the National Academy of Sciences wrote at the time.
Air ambulances weren’t a regular civilian option then, but when researchers discovered that soldiers wounded in the Vietnam War had better survival rates than California motorists injured in car accidents, the US government decided to fund two medical helicopter experiments in 1969. They were successful, and hospitals slowly started creating their own programs.
A Denver hospital put the first one into service in 1972. By 1980, there were 32 in the US. In the ’90s, there were 231. By 2018, there were more than 1,461 air ambulances in service. Today, air ambulances provide access to care for about 550,000 patients a year, according to the Association of Air Medical Servicesa nonprofit trade association.

The golden hour

Air ambulances remain lifesavers, especially for patients who need critical care fast. Heart attacks, strokes and burns all benefit from quick care. Trauma patients face much better survival odds if treated in the “golden hour” or as quickly as possible after injury, studies show.
Growing gaps in available care make getting quick medical attention difficult. About 46.7 million Americans don’t have access to a Level I or II trauma center within an hour’s drive from their home, a 2005 JAMA study showed. Since 2005, more than 120 rural hospitals have gone out of business, and more emergency departments have closed in the community hospitals that remain. Both of these trends are predicted to increase. That means more patients will need air ambulances.

A ‘cash cow’

Demand for services wasn’t the industry’s only growth driver. The Balanced Budget Act of 1997created a new fee schedule that was much more generous to independent operators and paid more for rural trips. Almost immediately, new companies entered the market. Private equity firms, not hospitals, now own the three largest air ambulance providers in the United States. Bain Capital bought Air Medical for $1 billion in 2010 and sold it five years later for $2 billion.
As private companies got into the market, prices went up. Between 2010 and 2014, the median price that air ambulance companies charged Medicare doubled to nearly $30,000 a ride, according to a 2017 US Government Accountability Office investigation.
“They have a cash cow on their hands,” New Mexico state Rep. Liz Thomson said.
Thomson said a state analysis also found a 98% increase in the amount charged by air ambulance providers that weren’t covered by insurance between 2009 and 2015. When patients travel on helicopters that are not in-network, insurance will cover little or nothing at all.
The Association of Air Medical Services says more firms are accepting insurance — about a dozen announced that they were going in-network this year — but still too many do not, Thomson said, and that can be a serious issue.
“If they aren’t in a network, they don’t have to adhere to the usual customary fees that insurance will pay,” said Susan Rider, an employee benefits and human capital HR consultant with Gregory & Appel Insurance in Indianapolis. “They don’t have to participate, so they don’t, and then essentially, they can charge what they want.”
In 2017, Thomson introduced a bill to cap reimbursement rates and let consumers off the hook for “balance bills,” meaning what consumers owe above what insurance pays. The bill failed in the New Mexico Legislature, but she hopes to introduce it again.
The air ambulance industry packed the committee hearing room when Thomson introduced the bill, but it was not alone.
“I’m a Democrat and introduce a lot of legislation around patient protection, so I had a running joke that while I don’t drink, I would drink a bottle of champagne if the [insurance?] industry ever stood up for any of my bills,” Thomson said. “Sure enough, I needed to buy a bottle, because when the chair asked who was in favor of the bill, all these insurance people stood up and said, ‘we are.’ This practice is costing them a mint. It’s outrageous.”
Mike Castleberry, senior vice president of network services and business development for HealthSCOPE Benefits, a national firm that helps major companies manage health plans, said the costs for these services don’t add up. “When you really get into the math, it starts to get embarrassing for the folks running those businesses,” he said.
“We know what their fuel costs. We know how many hours they fly and how much it costs for a pilot,” Castleberry said. “Add up all those factors, even if you give them a 20% profit on top of that, that’s still not even half what they are charging me, which is more like 300 to 400 times what it actually costs to fly our customers. When I can go rent a private plane and put medical personnel on board for less than some of these bills, I know it shouldn’t cost this much.”
He also notes that a lot of patients whose bills the firm sees, who are told to take these flights, aren’t trauma cases. “They are not for a wreck on the side of the road needing Level I trauma care,” Castleberry said. “Only about 15% of the air ambulance charges we see involve those kind of accidents. The vast majority are patient transfers from one facility to the other.”
As hospitals specialize in certain types of care, there has been an increasing number of hospital-to-hospital air transfers. There are few evidence-based guidelines about what appropriate use for air ambulances.
Castleberry, who has clients across the country, said private operators aren’t the only ones making money. “County governments and city hospitals [which can have their own air ambulance services] also see it as a revenue stream that supports their overall programs,” he said.

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