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Air Methods thanks West Virginia Governor Jim Justice for protecting the citizens of his state from misleading air medical membership practices by signing House Bill 2776; the Air Ambulance Patient Protection Act.
We applaud the consumer protections this law will provide in West Virginia and commend Delegate Steve Westfall for his leadership in drafting and passing this consumer-focused legislation. Air Methods also thanks HealthNet Aeromedical Services and its President and CEO, Clinton Burley. Without their leadership and support these important consumer protections would never have become law.
This legislation protects West Virginia consumers who have purchased air ambulance membership products and have previously been without recourse to file consumer complaints or seek assistance from the state. This is a responsible decision because these memberships function as supplemental health insurance, over which the State of West Virginia has previously established consumer oversight authority.
In most states, air ambulance memberships are not regulated. This new law is a step in the right direction for protecting citizens from confusing, and sometimes misleading business practices. When a patient has a membership with the air ambulance company that transported them, they must still go through an insurance claims process. What’s more confusing, Medicaid and Medicare Part B beneficiaries have never needed memberships because they are fully covered for air medical services.
But this hasn’t stopped some air medical companies from targeting these populations with marketing campaigns designed not to protect patients, but to make money off their fear. And these companies are more than happy to accept the membership fees, regardless of whether the person is already covered by their insurance.
At Air Methods, we believe memberships are the wrong direction for the industry and the people we care for. We strongly encourage every state to take up similar legislation to safeguard consumers and establish practices that set the air medical industry along the same path as the rest of health care.
What the Legislation Does:
“The purpose of this bill is to create the Air Ambulance Patient Protection Act and to provide for certain consumer protections for patients of air ambulance services.This legislation declares that any entity, whether directly or indirectly, who solicits air ambulance membership subscriptions, accepts membership applications, or charges membership fees, is an insurer and shall be licensed and regulated by the Offices of the Insurance Commissioner.”
On Tuesday, March 23, 2021, Ruthie Barko, Air Methods Director of Government Affairs, testified before the Tennessee Senate Commerce and Labor Committee in support of SB 1038, which seeks to provide consumers protection in regards to air medical memberships. The following is the complete text of her testimony, which can also be viewed on the Committee webpage – testimony begins at 23:00 minute mark.
Thank you Mr. Chairman, my name is Ruthie Barko, I’m the Director of Government Affairs for Air Methods. We have partnered with Vanderbilt LifeFlight for over 30 years. We support SB 1038 because we think going in-network and providing Patient Advocacy is better for patients than selling membership products.Memberships confuse consumers and sell a false narrative that the membership provides access to air medical services, or even worse, that it is the only way to keep access to these services in their rural communities. Membership marketing and sales tactics have skewed consumers’ understanding of these high-acuity services and the coverage that the products provide.For instance, members think their $85 fee pays for the cost of their transport, but it actually doesn’t – the membership provider bills the patient’s health insurer. Data also shows that less than 1% of members will need an air medical transport – making these products insurance and not a simple prepayment for a service, because the consumer cannot reasonably expect they will use the service, nor do they have any choice in the matter.Additionally, 75% of air ambulance patients are covered by Medicare, Medicaid, or are uninsured, so they don’t need an air ambulance membership:
Yet, the largest population who buys memberships seems to be Medicare beneficiaries, making air ambulance memberships one of the largest Medigap products sold to seniors; without any safeguards against seniors being sold unnecessary duplicative insurance.You will hear in testimony today that the 8th Circuit appellate court decision prevents states from enacting consumer protections like SB 1038, but this is an inaccurate reading of the 8th Circuit decision:
Oversight of the coverage and terms offered by air ambulance membership policies is critical for consumers.As a result of the No Surprises Act, policyholders should get a large discount on air ambulance membership premiums starting in 2022 now that patients can no longer be balance billed, because the payment to cost ratio will only cover copay and deductibles.
There are also predatory terms in some membership contracts, such as auto-renewals without express consent and without refunds to consumers who object – we have filed letters with the committee from consumers in Tennessee describing such circumstances.SB 1038 is not about taking anything away from consumers, it provides a more effective product for the very small portion of the population that may need it, at a much lower premium cost to them. Thank you for considering our perspective and working to put patients first in Tennessee.
Since March 2019, Air Methods has worked to eliminate air medical memberships from the industry. We will continue this fight because it is the right thing for our patients and the communities we serve.
On Thursday, December 10, 2020, Chris Myers, Air Methods EVP of reimbursement and strategic initiatives, testified before NCOIL in support of the Model Act Regarding Air Ambulance Patient Protections, which seeks to regulate air medical memberships as insurance products. The following is the complete text of that testimony.
Chair Hunter and Vice Chair Ferguson, thank you for the time today to address you and the committee members on this very important topic. I am joining you today representing Air Methods Corporation in support of the Model Act Regarding Air Ambulance Patient Protections (introduced by Delegate Steve Westfall of West Virginia and Representative Tom Oliverson of Texas).
Air Methods serves 49 states with over 400 helicopters and fixed wing aircraft representing over 65,000 time-sensitive transports a year. When called by an independent physician or first responder we have an asset deployed with our highly trained clinicians and pilots within less than 15 minutes. The most common conditions that we treat are trauma, cardiac, stroke, and respiratory stress where minutes matter to the outcome of a patient. During these unique times we have transported over 4,000 COVID patients, as well. As rural hospitals continue to close, we are the last line of defense to get patients to the Level I trauma center to best serve their needs.
Over the last four years, Air Methods has deployed multiple strategies to make the patient billing experience as transparent and simple as possible. Our guiding principle is to approach any billing concerns according to what is best for the patient. To that end, we have aggressively pursued in network agreements with any willing payer which has resulted in us having 50% of our privately insured patients covered by in network agreements with great partners like Anthem, Humana, and most states Blues plans. This is up from only 5% just four years ago. United, Aetna, and Cigna remain the final opportunities for us to be 100% in-network. Being in-network is the best way to remove the financial burden from patients and ease the reimbursement process. Additionally, we have deployed patient advocates that are individually assigned to patients with an out of network payer and a robust financial assistance policy so that the average out-of-pocket for all our patients is $167 and getting lower. We do NOT balance bill patients and only send patients a bill if they have never provided us a payer of record or communicated with us to qualify them for financial assistance, including 100% relief.
Air Methods supports Delegate Westfall and Representative Oliverson’s model act because it aligns with our patient centric approach and protects patients from unscrupulous insurance and insurance-like products and related practices. Many membership sales tactics feel like being both arsonist and fi re fighter, where consumers are scared into thinking they will have a big bill and therefore need to buy a membership to avoid this imminent peril, from the same company that is transporting them. This is the opposite of providers working to truly take the patient out of the middle. The overwhelming majority of air ambulance transports are for Medicare and Medicaid beneficiaries who have a defined fee schedule and copay. Medicare patients are disproportionately marketed to with tactics like special “senior pricing.” The prevalence of these products being sold to seniors is cause for question about whether regulation is needed. If only 25% of the three million AirMedCare Network memberships are sold to seniors, this would make it the second largest Medicare supplemental product sold in the U.S.
The lack of regulation of these membership programs today has created financial opportunists like Helimedic, which launched a web-site selling memberships but has no verified operations. It claims to cover the entire country in only minutes with only a few helicopters based out of Texas and California. Additionally, when you attempt to call the posted contact number it connects to no one. Yet, they are still trying to sell air ambulance memberships at $500 for an individual or $1,500 for a “family,” even garnering local news coverage.
From an actual utilization perspective, there are approximately 360,000 air medical trans-ports a year which represents 0.1% of the U.S. population. Given the extremely low utilization of all air medical services, one wonders why there are millions of annual memberships sold each year. Additionally, 80% of our transports are covered by a set fee schedule. Given this dynamic, Air Methods has chosen to apply resources to mitigate any patient out-of-pocket expense to the patients that actually need it versus those that do not and will likely never need it.
I will leave it to others smarter than I am to conclude whether you believe memberships are insurance products or not, but a simple definition from Black’s Law Dictionary states, “Insurance is a contract by which one party (the insurer) undertakes to indemnify another party (the insured) against risk of loss, dam-age, or liability arising from the occurrence of some specified contingency.” And borrowing from the Guardian Flight v. Godfread opinion, “if a bird looks like a duck, swims like a duck, and quacks like a duck, a reasonable person can only conclude that it is indeed a duck.” Montana, New York, Connecticut, and Wyoming have all decided to regulate memberships as insurance, and Florida requires licensure and regulatory oversight as an insurance company to sell to Florida consumers. Patients and consumers should have full transparency and under-standing of the product they are purchasing and not have their care compromised or face unexpected bills.
The arsonist and firefighter sales tactic utilized to sell air ambulance memberships puts undue pressure on patients and doesn’t fully disclose the financial terms of the insurance product they are purchasing, or the fact that it isn’t needed. Patients have sued membership providers for balance billing them when the patient received a legal settlement, and the membership provider tried to collect those funds. Uninsured patients may not necessarily understand that, per the contract terms of some providers, they can be billed the Medicare allowable rate which isn’t covering their out-of-pocket costs in full. The one point that contract membership terms make abundantly clear, is that they only cover the patient in the scenario where that specific provider transports them – this creates unnecessary and dangerous pressure on the patient to delay their care and wait for their “free” air ambulance transport. This is a risk that patients who need time-sensitive air ambulance transport cannot afford to take. At Air Methods, we have chosen a decidedly different path to memberships. You do not have to pay us a membership fee to do what is best for the patient. It is a part of the service we provide.
Thank you, Chair Hunter, Vice Chair Ferguson, and committee members, for the time you have provided me today.
Since March 2019, Air Methods has worked to eliminate air medical memberships from the industry. We will continue this fight because it is the right thing for our patients and the communities we serve. NO MEMBERSHIP REQUIRED.
NCOIL is the National Council of Insur-ance Legislators. From the NCOIL web-site:NCOIL is a legislative organization com-prised principally of legislators serving on state insurance and fi nancial institutions committees around the nation. NCOIL writes Model Laws in insurance, works to both preserve the state jurisdiction over insurance as established by the McCar-ran-Ferguson Act seventy-four years ago and to serve as an educational forum for public policy makers and interested parties.
NCOIL works to:• Educate state legislators on current and perennial insurance issues• Help state legislators from different states interface effectively with each other• Improve the quality of insurance regulation• Assert the prerogative of legislators in making state policy when it comes to insurance• Speak out on Congressional initiatives that attempt to encroach upon state primacy in overseeing insurance
NCOIL is an adamant, vocal opponent of any Congressional initiative that would de-prive consumers of key state protections, preempt state laws that respond to unique insurance markets, threaten critical state premium tax revenue, and, in many cases, lead to cherry picking and fraud.
By JaeLynn WilliamsCEO, Air Methods
This week, our team read with interest a study titled, “Most Patients Undergoing Ground And Air Ambulance Transportation Receive Sizable Out-Of-Network Bills,” that was published by Health Affairs on April 15. While it examines balance billing from one point of view, it is important to provide thoughts from the perspective of an emergency air ambulance provider that has first-hand experience with the issue.
During the past several years, and before any legislation was considered, Air Methods has certainly recognized the problem of balance billing in our industry and has enacted a variety of strategies to take patients out of the middle of this complicated process. A key initiative has been our work to partner with insurance companies all over the country to reach in-network agreements. This has proven to be the most effective way to ensure patients do not have to deal with unexpected charges.
The average out-of-pocket cost for our patients amounts to just a little over $200. This data set is completely absent from the study, as is any acknowledgement of the provider’s attempt to resolve the claim. Our prevailing tendency, through our Patient Advocacy process, to forgive the balance left by the insurance company contradicts much of the premise in this study.
The Health Affairs study states that,“legislation at the state and federal levels is being considered to protect patients from these ‘surprise bills,’ defined as out-of-network charges.” While these legislative efforts are underway, Air Methods has proactively and independently worked with insurance companies and has reached agreements with 54 health plans to date.
Our goal is to be 100 percent in-network nationwide. In-network coverage offers health plan members a discounted, out-of-pocket payment for qualified services, which varies depending on their plan’s benefits. It is important to note that health insurance companies control who is “in-network” for their plans, and, unfortunately, some of the largest national payers, United Healthcare, Cigna, and Aetna, have been unwilling to add Air Methods as an in-network provider at rates consistent with what they are already paying today.
Another key detail in the Health Affairs study is its frame of reference, which does not take into account work that has been done over the past three years (all data is from 2013 to 2017). The gap in data from 2017 to present is particularly significant to Air Methods, as we have made a great deal of progress in eliminating balance bills during the past three years – going from just six percent in-network to nearly 50 percent today. This means that more than 80 percent of the population is covered for Air Methods’ services either through commercial insurance or through Medicare or Medicaid so they will not receive a balance bill for services. Once these final three large national payers I mentioned above allow us to be in-network, we will, for all intents and purposes, be very close to our 100 percent goal and have the ability to eliminate balance bills.
Along with our own efforts to partner with insurance companies, we continue to work with state and federal legislatures for a more accurate Medicaid and Medicare reimbursement model. Currently, more than 70 percent of air medical flights are Medicare, Medicaid, or self-pay/uninsured, which only covers approximately 30 percent of the median cost of a flight. At the federal level, we support legislation that would preserve access to these lifesaving services, while addressing the issue of consumer costs by updating the Medicare reimbursement rates of air medical services to be based on the actual cost of care, which has not been updated in over 20 years.
I would also be remiss if I didn’t point out a few elements that are missing from the study. It does not look at the denial rate of health insurance companies when it comes to emergency air medical transports. On average, more than 50 percent of our emergency air medical transport claims are denied by insurance companies on first examination. That means the patient and the provider must appeal to the insurance company for payment using the process created by the insurance company itself. And it often takes months of appeals before the patient knows whether their insurance company will cover the cost of the emergency air medical transport. Almost every single denial is overturned after this lengthy and time-consuming appeal process.
At Air Methods, we only balance-bill for two very specific reasons: First, if the patient does not provide us with their insurance coverage information so we can bill their insurance company or if they do not assist in the appeals process – which is a requirement set by the insurance company; Second, if the insurance company sends the payment for emergency services directly to the patient, who then either willfully or as directed by insurance, does not send the reimbursement check to Air Methods (the provider) for payment of medical care.
The authors of the study point out that they “were not able to observe whether patients were balance-billed.” That means the dramatic phrasing of the Health Affairs headline is misleading – the potential for a balance bill does not equate to an actual balance bill. A health insurance company’s reimbursement behavior dictates that potential. The study lays the blame for a potential balance bill not at the feet of the insurance company for its lack of reimbursement, but solely with the provider.
Our healthcare system is complicated and, unfortunately, patients are indeed often caught in the middle. While the issue of balance billing and the cost of air medical transportation is complex, Air Methods continues to actively work with all willing parties to make sure patients can focus on recovery and that insurance fairly covers this necessary service.