An insurer has gone to the Kansas Supreme Court dragging a medical flight company. The contention has been that the company has been charging unreasonably high prices for its services. Terming the practice of billing ‘predatory’, the petitioner has asked the court to intervene, although the medical flight industry has been insulated by a federal law that bars states from interfering in the matters of billing. The court is yet to pass a ruling, and the service provider in question is EagleMed. The air ambulance industry argues that high charges towards privately insured people are a way to offset the losses resulting from uninsured people or those with Medicaid and Medicare.
The Tough Competition in the Medical Flight Industry
There are several players in the medical flight industry today. This means more service providers for a limited number of service seekers. This makes it incredibly hard for most companies to stay afloat because they fail to get enough customers to balance the costs. As a result, the cost of maintenance is distributed among those who avail of their services. The federal law acts as a shield allowing these companies to employ this practice.
The Federal Law is Aimed at Staying Competitive
The Airline Deregulation Act of 1978 is a federal law. It is aimed at airlines, and since the medical flight industry is considered a part of aviation and not the healthcare industry, the Act holds good for it too. However, the main purpose of this act is to encourage competition to lower prices. This is not the case with air ambulances. Since the patients have little say in the service providers that they choose during emergencies, the medical flight companies get a free hand to charge as they please. The insurance companies, on the other hand, have not changed their coverage for years together. This translates into lower coverage, and the ultimate burden of clearing the bills falls on the customers.
In January 2019, a deadly air ambulance crash had killed the entire crew. The cause of the crash was harsh weather conditions. It has now been reported that the crash was due to lax safety procedures in place. The service provider in question is Survival Flight. The report comes from the federal investigators who have been looking into the cause of the air ambulance crash. The National Transportation Safety Board has alleged that the company had inadequately managed safety. Moreover, the service provider had not conducted adequate risk analysis before taking up the flight.
The Air Ambulance had Crashed in South Eastern Ohio
It is believed that, at least, two air ambulance service providers had refused to carry the patient who was in an emergency health condition. The cause was poor weather conditions marked by heavy snowing and consequent poor visibility. It is believed that the inclement weather condition was the primary reason for the crash. The medical flight had crashed into the heavily wooded hillside and had broken into several pieces. The pilot Jennifer Topper and crew members Rachel Cunningham and Bradley Haynes were instantly killed. They were 34, 33, and 48 years old respectively.
Was the Flight Undertaken by Flouting Rules?
It must be understood that it is not illegal to fly an air ambulance when it is snowing lightly; however, it is not authorized to fly when the visibility is poor due to heavy snowing, which inhibits the pilot from having a clear view of the ground. Besides, there is a risk of air ambulance freezing. It is believed that, in this case, the poor visibility had led the pilot to undertake some abrupt maneuvers and had resulted in the crash. The incident stands evidence to the fact that some service providers flout the rules in the interest of either helping the patients or making the ends meet.
The adoption of private equity is not just a predicament for the air ambulance industry but the entire healthcare system in the United States. Several financial institutions in the country have shown a keen interest in healthcare in recent times. There is no doubt that it makes the whole sector highly competitive with ready access to funds. However, what bothers most people is the profit motive of private equities. The healthcare and air ambulance industries being more human-centric, it does not seem right to most people that they are viewed as a source of profit. They opine that healthcare must be a pure welfare activity.
What’s the Air Ambulance Industry Got to Lose?
Many people believe that the high prices charged by air ambulance companies are directly a result of heavy private equity investment in them. Investors simply do not want to make any losses, even though the United States is flooded with several air medical transport companies, so much so that the consumer base is starting to look too small. This is causing more idle time for many companies. As a result, their costs are piling up and are being ultimately transferred to the customer.
Will the COVID-19 Pandemic Transform the Industry?
The COVID-19 pandemic has drastically cut down the demand for air ambulance services. The reason behind this is simple. The industry relies heavily on helicopters, which are not built to handle highly infectious diseases like COVID-19. The pandemic has given no adaption time to the air ambulance service providers. The lack of isolation between the crew and the infected patients, in addition to the sanitization needs, has made air medical transport not the best option, at least locally. However, they are still being utilized for international evacuations, although not large in numbers.
Experts opine that, if the prevailing low-demand situation persists, there are going to be several service providers who will be forced to shut down, creating a balance between the number of players in the market and the size of the market.
In the past, the air ambulance industry has proved that it is an indispensable part of the health emergency services in the United States and beyond. The cost of availing the services has been a concern, but that apart, the utility of the air ambulance industry has never been questioned. Today, it plays an important role in repatriating COVID-19 patients from beyond the borders. It is also continuing to play a huge role in offering quality care to people in the rural parts of the United States. However, because of the COVID-19 situation, there needs to be a change in the way this industry functions.
Definition of Medical Necessity has Changed in the Air Ambulance Industry
Of course, we are not referring to medical necessity in the context of insurance coverage, approvals, etc. That remains the same. However, today, hospitals are encouraging people not to visit them unless it is important. The reason behind this is simple; people who already have a serious health condition must refrain from visiting spots that are hotbeds of COVID-19 infections, hospitals being one among these. The air ambulance industry is not completely prepared to handle this pandemic that is of epic proportions.
Recommending Air Ambulance Services Demands Careful Deliberation Today
Most of the helicopters in the air ambulance industry are not isolated enough to separate the patient from the rest of the crew. This poses a threat both to the healthcare workers and the patients. The problem of isolation does not exist in ground ambulances.
Besides, reaching the hospital early does not translate into immediate admissions today. Depending on the symptoms of the patient, he or she might need to be tested and isolated before being treated. The treatment protocols are still evolving. In essence, the physicians recommending air ambulance services should do so only after careful deliberation.
The COVID-19 pandemic is slowly making inroads into rural America. The higher number of elderly people living in rural communities is especially vulnerable now. Moreover, the infection is known to be fatal to people with diabetes, heart disease, and other ailments that impact natural immunity in human beings. All things considered, people living in rural parts of the country must have access to medical flights. However, this is turning out to be a huge problem for organizations that offer air ambulance services. It has again boiled down to balance billing, insurance denials, and financial burden to patients.
Medical Flights Being Denied Coverage is a Concern
Medical flights are a part of an industry that is highly competitive and which is already struggling to stay afloat. The COVID-19 situation has created an emergency of sorts throughout the nation and medical flights need to play a huge role in offering adequate coverage to rural communities. However, the threat of inadequate coverage is limiting its services. In this context, it must be noted that when coverage is denied by insurance companies, the burden is shifted to the patients. This presents a significant financial burden to the patients that can run into several tens of thousands.
The Percentage of Balance Billing is Small but Significant
About 300,000 air ambulance evacuations are carried out every year; of this, 3% end up in balance bills. This is primarily due to insurance denials. Most of these denials are due to the service provider being out-of-network.
The providers of medical flights too have not been keen on going in-network with insurance companies. The reason for this is the fact that reimbursements rates have remained unchanged. However, there is hope. With states like Florida looking to revise insurance reimbursement rates, the scenario could change soon.