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:

• Our average patient out of pocket cost is $167.
• 90% of our uninsured patients pay $0.
• 70% of our Medicare patients pay less than $50 out of pocket.

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:

• The decision doesn’t address that because air ambulance memberships are sold to cover cost-sharing amounts that are set by the consumer’s health insurer, these products are engaging in the business of insurance.
• The judge also stated at the end of page seven of the decision, that if a state law is enacted for the purpose of regulating the business of insurance of air ambulance memberships, the Airline Deregulation Act does not apply. Hence, SB 1038 would be allowed by 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.