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Air Ambulances Woo Rural Consumers With Memberships That May Leave Them Hanging

Lambert here: Wouldn’t you just know it, but AirMedCare is owned by private equity, whose talented analysts have figured out yet another way to screw desperate rural communities who have lost their hospitals, and collect on the mother of all out-of-network billing scams. Ditto the medical evacuation business generally. This story reinforces Eileen Applebaum and Rosemary Batt’s work here. Needless to say, don’t fall for the brightly-colored brochures.

Sarah Jane Tribble, Kaiser Health News. Originally published at Kaiser Health News

FORT SCOTT, Kan. — On a hot June day as the Good Ol’ Days festival was in full swing, 7-year-old Kaidence Anderson sat in the shade with her family, waiting for a medevac helicopter to land.

A crowd had gathered to see the display prearranged by staff at the town’s historic fort.

“It’s going to show us how it’s going to help other people because we don’t have the hospital anymore,” the redheaded girl explained.

Mercy Hospital Fort Scott closed at the end of 2018, leaving this rural community about 90 miles south of Kansas City without a traditional hospital. The community has outpatient clinics run by a regional nonprofit health center and — at least temporarily — an emergency department operated as a satellite of a hospital in the next town over.

Since the hospital closed, air ambulance advertising has become a more common sight in mailboxes and at least one company’s representative has paid visits to a local nursing home and the Chamber of Commerce, offering memberships. A prepaid subscription would guarantee that if an AirMedCare Network helicopter comes to your rescue, you will pay nothing.

Nationwide, though, state insurance leaders, politicians and even one of the nation’s largest air ambulance companies have raised alarms about the slickly marketed membership campaigns.

The air ambulance industry expanded by more than a hundred bases nationwide from 2012 to 2017 and prices increased as well, according to a recent federal report. The median price charged for a medevac helicopter transport was $36,400 in 2017 — a 60% increase compared with the roughly $22,100 charged in 2012, according to the March report from the U.S. Government Accountability Office.

Insurance seldom covers the trips and consumers often are surprised to get a bill showing they are responsible for the bulk of the cost. However, both Medicare and Medicaid control the price of the service, so enrollees in those government insurance programs face much lower out-of-pocket costs or have none.

AirMedCare Network, which includes 340 bases across mostly rural America, has more than 3 million people enrolled in memberships, said Seth Myers, president of Air Evac Lifeteam, one of the medevac companies under the AirMedCare Network umbrella.

One brightly colored AirMedCare advertisement mailed in southeastern Kansas promised entry in a summer vacation giveaway as an incentive to sign up. A one-year membership is $85 — unless you are 60 or older, which qualifies you for a discount. Buying multiyear memberships increases the odds of winning that summer trip.

“We’re a safety net for people in rural areas,” Myers said. “Generally, if I tell you the names of the towns that most of our bases are located in, you wouldn’t know them unless you lived in that state.”

Increasingly, though, state regulators have a skeptical view.

North Dakota Insurance Commissioner Jon Godfread called the memberships “another loophole” that air ambulance companies use to “essentially exploit our consumers.” The state banned the memberships in 2017, noting that the subscription plans don’t solve the problem of surprise medical bills as promised.

Too often, the company responding to a patient’s call for help is not the one the patient signed up with, Godfread said. North Dakota has nine different air ambulance operators who respond to calls and patients have no control over who will be called, he explained.

Air Evac’s Myers said his company, which operates mostly in the Midwest and Texas, doesn’t get many complaints from customers about other companies picking them up. He counted three this year.

Texas Rep. Drew Springer, a Republican, introduced a bill passed by the state legislature this year that would require companies to honor the subscriptions or memberships of other air ambulance companies.

But Texas Gov. Greg Abbott, also a Republican, vetoed Springer’s reciprocity bill, saying it would unnecessarily intrude on the operations of private businesses.

Myers said that AirMedCare Network was “very careful to educate the legislature and the governor’s office” in Texas. A letter signed by Myers and other industry executives noted that the 1978 Airline Deregulation Act — a law created for the commercial airline industry — protects them. The federal law limits states’ ability to regulate rates, routes or services. The law is at the core of the industry’s defense of its prices.

Like North Dakota, though, Montana used insurance regulations to limit the memberships. A 2017 law requires air ambulance subscriptions to be certified by the state’s insurance department. As of August, no company had applied for certification — essentially opting out of the state.

Air Methods, one of the nation’s largest private air ambulance companies, decided memberships “aren’t right for patients,” according to Megan Smith, a spokeswoman for the company.

While membership programs promise customers will avoid out-of-pocket expenses, in reality the contractual fine print “isn’t as cut and dry,” she said in an email.

Patients who sign up for memberships and have private insurance would still receive a bill and then must work through their insurance company’s claims, denial and appeal processes.

And while Air Evac’s Myers said the AirMedCare Network memberships or subscription fees replace copays and deductibles, Air Method’s email highlighted in bold print that “a membership is not necessary” for Medicare patients because federal law prohibits companies from charging more than copays and deductibles. Myers said having a membership offers peace of mind, particularly to those Medicare enrollees who do not have an added supplemental insurance plan that covers transportation.

Also, because the memberships are not officially insurance or a covered benefit, air ambulance companies can end them at any time “without obligation to notify the customer,” stated the Air Methods email. This means a patient could believe his or her emergency air transport was taken care of, only to face a rude awakening when the bill came.

Air Methods is the preferred helicopter service for Fort Scott’s dispatch service, according to city officials. Yet, Midwest AeroCare operated the helicopter that dropped in during the Good Ol’ Days festival.

Midwest AeroCare is part of the AirMedCare Network — not Air Methods. Families like the Andersons were there looking for reassurance that someone would come for them if needed, said Dawn Swisher-Anderson, Kaidence’s mom. Her son, Connor, has frequent and severe asthma attacks that require hospitalization.

“It’s obviously scary with a young one when he’s having breathing complications,” Swisher-Anderson said.

Once the helicopter landed, a tall pilot and two crewmembers stepped out and the onlookers quickly formed a line on the grass. Susan Glossip, who brought her grandchildren to see the helicopter, encouraged them to pose for a picture.

Midwest AeroCare representative Angela Warner stood nearby and asked if she could post the picture on the company’s Facebook page.

After Glossip said yes, Warner began talking about the membership program emphasizing that “with Fort Scott losing its hospital … having a helicopter be able to fly in can mean the difference between living and dying for some people.”

Glossip agreed and asked for a membership brochure.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

16 comments

  1. Jim A.

    I’m glad that I live in Maryland, where air evacuation is done by the state police rather than private air-ambulances.

      1. wilroncanada

        Off The Street
        I had a similar thought, just from the headline. Private equity players try to save money by picking up multiple patients. At the destination, They’re given a parachute and out the door they go, gurney and all..

  2. Pelham

    I grew up in Fort Scott when it was a gem of a town, back in the ’50s and ’60s. The loss of Mercy Hospital — which had been there for 132 years — was just the latest in a series of blows, the biggest of which was the loss of an independent insurance company 30-some years ago.

    For perspective: At its peak, the three business blocks of Main Street had, as I recall, 42 storefronts and all but one were filled and thriving when I was a kid. The last time I went back, in the ’90s, only 5 were open, and all but one was selling antiques of some sort.

    Fort Scott is now rated the poorest city in Kansas, which is saying a lot, and it’s fascinating how that status has now rendered the town a prime target for scavenger outfits like these medevac companies.

  3. Thomas P

    “and all but one was selling antiques of some sort. ”

    Is that an euphemism for “recently poor people selling of their possessions one piece at a time”?

    1. Janie

      After the fall of the USSR I saw a movie about the recently impoverished doing just that. One rural resident put out a large piece of furniture daily, hoping against hope that it would sell. Our future?

  4. Alex Cox

    I am a volunteer firefighter and so every so often have to transport people to the emergency room. We are (depending on location) 30-50 minutes from medical attention.

    The fastest way to get people to ER is to put them in a car and drive them there.

    The second fastest is to wait for the ambulance – which will cost the patient $2000 or more. The ambulances are private businesses which may insist on taking the patient to an out of network provider.

    The slowest way is to wait for a helicopter. A landing site must be determined, the helicopter dispatched, and the patient driven by car to the landing site – wait time 45 minutes to an hour.

    Unless a back or neck injury is involved the passenger car is always the way to go.

    1. d

      Unless your in a location, where the nearest hospital in Canada or maybe Mexico. And some times your location doesn’t touch the rest of states

  5. BoyDownTheLane

    Curious topic and coverage to this retired ambulance driver and EMS administrator with 15 years experience….

    What is rural? Do you not accept some risk by living in remote locations? In Massachusetts (which dominates the experience for all of New England), medical flights in emergencies are handled by units that are owned and operated by consortia of hospitals. It’s a tough economic equation. MedFlight is out of Hanscom in Bedford at 150 mph. But the loading process eats humongous amounts of time…

    I cut my teeth on driving people to tertiary hospitals in Cadillac-style ambulances, before DOT mandated the unwieldy boxes which, at high speed, are a death trap. [I routinely hit 120+ going down the center lane of the Mass Pike.]. I took preemies in incubators out of units in the Berkshires to Wesson Women’s (now part of Bay State). Where does it say that the individual in the middle of nowhere is entitled to instant transportation at acceptable cost? Does said individual support their local volunteer ambulance service, know how to use a tourniquet, or even taken an EMT class?

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