In a conference held on 9 July, Rick Sherlock, CEO of AAMS, outlined that since January this year, 32 air medical bases have already closed and one of the biggest air medical providers is currently in bankruptcy proceedings. “Since 2010, more than 90 rural hospitals have closed and an estimated 20 per cent are at risk of closing,” added Sherlock, warning that the new act would rapidly accelerate the closure of rural hospitals.
“If section 105 of the Lower Health Care Cost Act passes in the Senate, and if reimbursement rates for air ambulances are set at a median in-network rate, the closure of air medical bases would accelerate rapidly, leaving Americans in rural areas without access to critical levels of healthcare, trauma centres, cardiac cath labs and stroke treatment centres when they need them most,” Sherlock said.
He highlighted that the air ambulance industry transports roughly 360,000 patients every year, that 90 per cent of the patients flown by air medical services are victims of heart attacks, severe trauma or strokes, and more than one-third of them are flown across state lines every day, in order to get them to the closest, most appropriate facilities for their medical emergency.
The underlying problem emphasised at the conference was that none of the proposals that have been put forward by members of Congress actually address the root causes of balance billing in the air ambulance industry.
Sherlock detailed that 70 per cent of the 360,000 patients transported annually are covered by Medicare or Medicaid and therefore do not receive a bill. And Chris Myers, Air Methods Corp. Executive Vice-President, Reimbursement, noted that, for the small percentage that do receive a balance bill – and he pointed out that these numbers are in the single digits – on average they receive a bill of around US$600 and are often able to work with their insurers to cover the cost.
Still, for argument’s sake, let’s assume that surprise medical bills are still a burden on patients; clearly, air medical facilities only want what is best for their patients – it’s the ethos that the industry is built upon. As such, negotiating fair median in-network rates is a great way to ensure that balance billing doesn’t become a problem for patients.
But the problem for the air ambulance industry lies with the uncertainty of what ‘paying a median in-network rate’ really means. Seth Myers, President of Air Evac Lifeteam and a former flight nurse, explained that the legislation does not provide any incentive for insurance companies to contract with an air ambulance company – indeed, some insurance companies may even discontinue or not renew a contract for a rate they pay today, as they will be able to reduce the amount they pay in line with the new legislation: “The bill states that if there is no in-network rate to determine a median, an unknown state authority would then set a rate – which could have unforeseen consequences.”
Chris Myers added: “If payers truly want what’s best for patients then they will negotiate fair and reasonable in-network agreements for emergency air services, which can happen today.” But, unfortunately, it seems that air medical services are having no such luck – the conference revealed that, to date, several large Blue Cross / Blue Shield plans have refused to discuss the possibility of entering into in-network agreements.
Ultimately, Chris Myers urges for more industry data to be collected, in order to inform all parties involved about what’s going on in the industry and enable better decisions to be reached.
Listen to the full AAMA Telepress Conference, here.