On Saturday, April 17, 2021, Chris Myers, Air Methods Executive Vice President of Customer Experience, Reimbursement, and Strategic Initiatives, testified before the NCOIL Health Insurance & Long Term Care Issues Committee regarding the NCOIL Model Act regarding Air Ambulance Protections Draft. The following is the complete text of his testimony with presented materials. The hearing can be viewed here on the Committee web page.

Chair Hunter, Vice Chair Ferguson, and Members of the Committee, my name is Chris Myers. I am the Executive Vice President of Reimbursement for Air Methods and I am glad to be back with you today. Thank you for the opportunity to appear before you to continue our discussion on this important topic. Since we last met, there has been a key development that directly affect this Model Act, and how consumers interact with membership products: The No Surprises Act was voted into law and will become effective on January 1, 2022. This law significantly changes the landscape of the U.S. healthcare system and dramatically decreases the financial risk for patients, as it prohibits the practice of balance billing.

To be clear at the outset, I am not here today to argue for the prohibition of memberships but, instead, for the appropriate regulation of them so that consumers are not deceived by what they are purchasing. Air Methods continues to believe that the best way to solve for the patient financial burden is to go in-network with payers. We have led the industry in doing just that and have in network agreements with almost every major payer in every state and continue to work hard to get the big three payers – Aetna, United, and Cigna – into network as well.

The implications of the No Surprises Act make this Model Act even more important because:

  • Memberships are largely obsolete starting January 2022, as they have been marketed to cover patients’ financial exposure to balance bills, which, again, will be prohibited in less than nine months. These products are now marketed to cover only copays and deductibles. One must ask how does this factor into the federal government’s prohibition on the routine waiving of copays and deductibles under the False Claims Act, Anti-Kickback Statute, and Civil Monetary Penalty Law?
  • Given emergency air medical transport is always bookended by a continuum of care, any value to consumers in covering copays and deductibles is actually determined by the insurer, subject to when an air ambulance claim is submitted, and what amount of financial responsibility remains on a consumer’s policy.
  • Memberships offer far less financial value to consumers now than they did previously since they only cover copays and deductibles.
  • Companies that sell memberships believe these products operate above state law; however, states can, and do, regulate air ambulance membership subscriptions. Good examples of this are FL, NY, and most recently WV. Importantly, there are several areas of consumer protection for state regulators to consider:
    • Payment-to-cost ratio decreasing – will consumers be charged fair premiums?
    • Interaction of memberships with the patient’s main health insurance policies. How will regulators ensure that these products add financial value for the policyholder and are not merely duplicative coverage?
    • Sales of memberships to consumers who have no real need to purchase them. We already know that 35% or more of consumers who purchase these are Medicare beneficiaries. When comparing the data provided to NCOIL with data from NAIC and AHIP on the U.S. Medigap market, the largest membership product in the United States, AirMed Care Network, is technically the second-largest Medigap product sold in the U.S., second only to United Healthcare, but without any regulatory oversight at the state or federal level whatsoever. What about the additional consumers who truly will not have any out-of-pocket financial risk starting in January because of the No Surprises Act?
    • Because membership policies are completely unregulated, there is no state or federal oversight to prevent consumers from being taken advantage of in the case of being sold membership policies by fraudulent companies. Last time I spoke to the Committee, we discussed HeliMedic, which masquerades as an air ambulance provider and air carrier but doesn’t seem to actually exist. Yet you can google their website right now and buy a membership from them that claims to cover you and your family anywhere in the United States.
    • Confusing and deceptive practices buried within the fine print of memberships should be reviewed to determine if they are truly in the best practice of the policy holders. For example:
      • Disclosures for Medicaid and Medicare beneficiaries shifts the burden to the consumer to certify they are Medicaid beneficiaries. What about adding disclosures for the No Surprises Act?
      • Membership contracts sign away the consumer’s first lien rights so that any settlement received from auto or homeowners insurance must first go to pay the full billed charges of the air medical bill.
      • Terms & Conditions allow for auto-renewals in perpetuity without consent or refunds.
      • How will consumers that realize they can no longer be balanced billed next year be able get a refund after the No Surprises Act is enacted, and to which state agency do they go for recourse if they cannot get a refund?
      • Some of the policyholders have been so scared by the potential financial burden of a balance bill that they have delayed care to be transported by their membership provider in a medical emergency versus the closest and most appropriate provider.

Memberships are indemnity products.

  • Copays and deductibles are set by a third party, the payer, not the provider.
  • In fact, a January 6 handout entitled “HR 133/Membership Matters Talking Points,” GMR states: No air company can predict individual out-of-pocket costs as those are determined by insurance companies.
  • Indemnifying the policyholder against costs determined and set by third-party entities is dispositive of the “insurance” question: air ambulance memberships engaging in this activity clearly fall within the business of insurance.
    • The data filed in Air Evac v. Dodrill in February 2021 shows that these products are pooling risk like an insurance product, not prepaying for services.
    • The patient cannot call an air ambulance and has no choice in the matter, for a membership to be considered prepayment, the consumer has to have a reasonable expectation that they will use the product.
    • Yet, you and I have a higher likelihood of dying of heart disease than we do of being transported by an air ambulance. Air Evac v. Dodrill showed similar utilization among consumers who had purchased an air ambulance membership. In this case, 0.2% of these individuals in West Virginia used their membership.
  • There has been a lot of confusion about the recent Appeals Court decision in Guardian Flight v. Godfread in the 8th Circuit. State legislators and regulators have been told that this decision prohibits them from taking any action on regulating memberships because of the Airline Deregulation Act. However, this is not completely accurate. Guardian Flight found that a state law enacted “for the purpose of regulating the business of insurance” falls under the reverse preemption of the McCarran Ferguson Act, 15 U.S.C. § 1012(b). Hence, legislation like the proposed NCOIL Model Act on Air Ambulance Memberships, including the amendment before you today, are permissible and appropriate, ensuring meaningful consumer protections for air ambulance membership products.
  • The proposed NCOIL Model Act, and the amendment before you, takes a targeted, narrow approach to appropriately regulate the business of insurance, and to protect consumers from predatory marketing and sales tactics.

If memberships are simply a prepaid service then they should be just that, and the economics should support it. However, after January 1, 2021 the only possible prepayment is for the copayment and deductible. It is important to remember that based on the timing of service or when the claim is filed that there may be no copay or deductible. Additionally, when the provider seeks reimbursement for these services from a third party, then they become a medigap product.

One final point to make is that there are much better ways to reduce the financial burden that a patient may face. At Air Methods our average out of pocket expense for all patients is less than $165. And in the case where an individual cannot afford to pay that amount we use specific financial information from the patient to qualify them for an appropriate discount.

We continue to support this proposed Model Act, and the amendment before you, as a way to give States a tool to help consumers, and to ensure that the coverage they are buying is not duplicative or deceptive. The proposed NCOIL Model Act takes a targeted, non-prohibitive approach to appropriately regulate the business of insurance, and to protect consumers from predatory marketing and sales tactics.

What is NCOIL?
NCOIL is the National Council of Insurance Legislators. From the NCOIL website:
NCOIL is a legislative organization comprised principally of legislators serving on state insurance and financial institutions committees around the nation. NCOIL writes Model Laws in insurance, works to both preserve the state jurisdiction over insurance as established by the McCarran-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 deprive 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.

Materials used during Myers’ presentation:
PowerPoint Presentation
AMCN Brochure with Terms & Conditions

On Wednesday, April 28, 2021, the West Virginia Governor signed House Bill 2776; the Air Ambulance Patient Protection Act. The following is a statement from Air Methods on the signing of this landmark legislation:

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. 

WV HB 2776 Air Ambulance Protection Act

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.

At Air Methods, we have made it our mission to identify more effective ways to keep patients out of the middle of the billing process. We eliminated our membership program back in 2019, focused our efforts on reaching in-network agreements with insurance companies, and developed a robust Patient Advocacy program that provides the assistance patients need after a transport so they can focus on their recovery rather than bills.

For many years, emergency air medical companies have sold memberships to patients who rely on their services to access critical healthcare during emergencies. This subscription model was created to serve as an alternative to insurance, covering members for the cost of an air ambulance flight when a payer denied reimbursement for the transport. But, in today’s healthcare world, this model is outdated, and it is time to move forward.

As patient billing becomes a top-of-mind issue in 2021, we have not wavered in our commitment to this model that is reducing out-of-pocket costs for our patients, which is now less than $200 including copays and deductibles.

Becker’s Hospital Review recently published an article by our CEO, JaeLynn Williams, calling on the air medical industry to evolve past patient memberships.

Here are some highlights:

A membership is not a prerequisite for care, and it doesn’t replace insurance. That begs the question, is there really a need for them at all? The answer, in short, is no. Air medical services are provided in life-threatening situations when time is of the essence, and there is no time to “schedule” or “wait” for a transport.

We encourage all air medical services that offer membership programs to end them, refund Medicare enrollees who never needed them, and adopt more effective practices.

Over the last four years, Air Methods has deployed multiple strategies to make billing as transparent and simple as possible for our patients. Our guiding principle is to approach any billing concerns according to what is best for them. To accomplish that, we have aggressively pursued in-network agreements with any willing payer who will come to the table and negotiate with us. This has resulted in over 50 percent of our privately insured patients being covered by in-network agreements – up from just 5 percent only four years ago – with partners like Anthem, Humana, and most states’ Blue Cross Blue Shield plans.

Read the full article here.