The soaring costs of air ambulances is capturing national attention

Published on
October 20, 2016

While the term “air ambulance” may conjure up images of high drama — say, hiking in Yosemite and falling off a cliff — these helicopters are also often used in more common emergencies: a heart attack, stroke or even a car crash.

At the time, consumers typically have little say on how they’re transported.

“You’re in an emergency,” said Angela Perry, a policy analyst with the advocacy group Consumers Union who has researched the topic. “People are not going to disagree with a medical professional’s assessment of how much time they have until they’re going to die.”

Afterward, though, consumers increasingly are facing the financial consequences of that transport — sometimes that can mean out-of-pocket bills as high as $60,000.

“These are bills people didn’t expect to get, and, if given the option, they probably wouldn’t have selected a transportation model not covered by their insurance,” Perry said.

The topic recently captured the attention of the National Association of Insurance Commissioners, which hosted a discussion at its national meeting this summer. (Their consumer alert and issues brief on the topic can be found here). During that meeting, the insurance group heard about air ambulance bills that are costing consumers tens of thousands of dollars.

“It’s a thing that’s really starting to bubble and I think is going to start coming to a boil on the national stage,” Perry said. “This is a health issue ... access to care is critical, and air ambulances need to be part of that conversation.”

More transport, higher bills, safety concerns

Consumers Union started looking into air ambulances while working on its surprise medical bill campaign. As the organization sought stories of surprise billings, they also heard from people who ended up with unexpected air ambulance bills. When Perry delved into the topic, she found an increase in people being transported by air, as well as big growth in for-profit operators.

At the same time, patients are becoming more financially vulnerable as insurers reduce reimbursements for air ambulances, as The New York Times explained last year: “Air ambulance companies, which indisputably save lives, often in dramatic circumstances, have consistently raised their rates and aggressively expanded their networks, adding scores of expensive new helicopters.”

Safety is also a growing concern, according to The Bulletin in Bend, Oregon, which published a comprehensive two-part series on the rapid growth of air ambulances. Health reporter Markian Hawryluk wrote:

Fueled by high reimbursement rates and scant regulation, the rapid growth of the helicopter EMS industry over the past 15 years has transformed what many consider a life-saving service into an industry fraught with safety concerns but little oversight. ‘It’s sort of the perfect storm,’ said Dr. Michael Abernethy, chief flight surgeon for University of Wisconsin Health’s Med Flight. ‘It’s great money, it’s unregulated and there’s really no utilization criteria.’

Under federal jurisdiction

While states such as California are enacting laws protecting consumers from surprise bills from out-of-network providers, air ambulances do not fall under these provisions. That’s because the federal Airline Deregulation Act of 1978 keeps states from regulating air transport rates, routes and services. 

“Health care tends to be a state issue, but because of this weird quirk of federal law, these air ambulances are being considered more transportation than health care,” Perry said.

That limitation has stymied states’ efforts to regulate the industry, the Associated Press explained earlier this year: “Last year, North Dakota lawmakers passed legislation that required air ambulance services to be participating providers with insurance companies that cover at least 75 percent of the state's population for inclusion on a ‘primary call list’.” But earlier this year, a federal judge found that the federal law prevented that state effort. And efforts to amend the federal legislation to give state’s more authority on the matter have stalled.

Meanwhile, Consumers Union is advocating for states to assess their local air ambulance industry, and to take steps to make the services more effective and better coordinated. On a larger scale, they’d like to see states have control over costs, utilization and surprise billing, Perry said.

Covering air ambulances

Perry suggested several angles for reporters looking to dig into the topic in their communities.

Safety: The National Transportation Safety Board keeps track of all crashes. Take a look at the crashes, locations, providers and see if there are any interesting patterns.

Financials:  Since the country’s largest air ambulance carrier, Air Methods Corporation, is publicly traded, it offers a window into financials of for-profit air ambulance companies. As the New York Times reported, “Jonathan Hanlon, founder of Research 360, a firm that analyzes companies, calculated that Air Methods’ average bill in 2014 was $40,766, compared with roughly $17,262 five years earlier.” Look at how much health insurance companies are reimbursing for such flights, as well as Medicare. 

Personal Stories: Check with your state’s department of insurance for consumer complaints as a way to find personal stories. In California, for example, you can visit the Department of Managed Health Care and search their air ambulance files.

Distribution: There’s an overabundance of air ambulance providers in some areas and not enough in others. As rural hospitals close at an alarming rate, there’s a growing need for air ambulances that can quickly ferry patients to more distant hospitals. But, there are also reports of that suggest air ambulances are overrepresented in urban areas where reimbursement rates are often higher.   

State hearings: Hearings on the topic can provide useful sources and data. For example, last year, the Maryland Insurance Administration hosted a hearing on the issue