By Jen Christensen, CNN
Updated 4:04 PM ET,
Mon November 26, 2018
(CNN) Sonna Anderson was enjoying a horseback ride through the
Badlands in North Dakota in September 2017 when her horse, Cody, got spooked,
jerked toward a fence and tripped on a cow track in the dirt. The horse rolled
onto Anderson, who hit her head, briefly lost consciousness and broke three ribs.
The 911
transcript shows that an ambulance reached the 60-year-old judge from Bismarck
within 20 minutes. Anderson was secured on a backboard and ready to go when an
air ambulance, a helicopter with a medical crew, also landed at the scene.
Anderson says her husband asked repeatedly whether the ground ambulance crew
could take her by ground; there was a hospital less than an hour's drive away.
"But
he was told that [the air ambulance] was necessary. They never told him why it
was necessary or how much it cost, but they insisted I had to go by air
ambulance," Anderson said. "But it's so odd there is nothing in the
record that indicated it was time-sensitive or that I needed to be
airlifted."
For
that one helicopter ride, to a hospital farther away in Bismarck, records show
that Valley Med Flight charged Anderson $54,727.26. Sanford Health Plan, her
insurance, paid $13,697.73. That left Anderson with a $41,029.53 bill.
Valley
Med Flight did not respond to requests for comment.
"It
shocked me," Anderson said. "I kept thinking, 'my God.' I got a copy
of the 911 and air ambulance report to see how long they actually spent with
me, when really, it was only around 45 minutes. I wrote [the air ambulance
company] a letter telling them that I thought it was all outrageous."
Shared outrage
Anderson
is not alone. CNN reached out to every state's insurance regulatory office.
Nearly every one said it has heard from patients like Anderson, and complaints about
air ambulance bills have "increased rapidly," according
to the Mississippi commissioner of insurance.
Charges
vary wildly. CNN saw bills ranging from nearly $34,000 to more than $533,000.
A 2017 federal investigation found
that costs for an average air ambulance flight doubled between 2010
and 2014. Some states saw even bigger increases. New Mexico bills went up 229%
between 2006 and 2015, a state investigation found.
Each
state's law varies in what can be disclosed about these complaints due to its
interpretation of patient privacy. In some cases, CNN could see details about
the patient's condition, how far and where they were flown, how much they were
charged, how much insurance paid and the nature of the complaint. Some states
released much less. Some would acknowledge only that there had been complaints.
However, it's clear that these bills can be devastating for
families.
One
complaint sent to the Michigan insurance office says a family flew a dying
relative home after he got sick in Arizona. To get him to a hospice in Michigan
cost $547,725.
It cost
another family $62,749.35 to fly a child with a malignant brain
tumor from Wisconsin to Houston to see a specialist.
But
these high prices aren't just for cross-country flights. An air ambulance
transferred a man from a hospital in Winter Haven, Florida, to one in Orlando
for tests, which would be a one-hour drive. The complaint to the Michigan
insurance office about that Florida flight said the family faced a $31,253.33
bill.
$4,680
bill for air ambulance hits 17 years later 02:02
Emergency
personnel requested another hospital-to-hospital transfer in Arkansas for an
X-ray. It cost $37,850, according to a letter to the state insurance
department.
"We
carry insurance to avoid the catastrophic situations," wrote the man,
whose name was redacted. "I don't see where the consumer is getting a fair
shake in this deal."
The
desire may be there for change, but nothing's worked.
Patients
have tried. Dogged by bill collectors, hundreds have turned to the courts.
Few consumers have found help, research shows.
Insurance commissioners' offices and insurance associations have tried to
help: sending letters,
pleading with Congress to do something about "unreasonably high and
unregulated rates," as one Mississippi insurance commissioner put it. Yet
standalone legislation, even with bipartisan backing, has gone nowhere.
The
price of these flights is not regulated by Obamacare. Instead, they fall under
the 1978 Airline Deregulation Act,
which removed a state's ability to control airfares and routes long before air
ambulances were common. October's Federal Aviation Reauthorization
Act created a committee to address the problem, but it failed to design a
definitive solution, experts say.
States
have also tried. North Dakota, West Virginia and Texas passed
legislation to limit costs but were stymied by the courts. Consistently, judges conclude that air
ambulance regulation is a federal, not state, matter due to the Airline Deregulation Act.
Air ambulances take off
Air
ambulances became necessary out of a desperate need to save lives, but some
question whether their value remains.
In
1966, civilian deaths from accidental injuries were "a public health problem
second only to the ravages of ancient plagues or world
wars," the National Academy of Sciences wrote at the time.
Air
ambulances weren't a regular civilian option then, but when researchers discovered that
soldiers wounded in the Vietnam War had
better survival rates than California motorists injured in car accidents, the
US government decided to fund two medical helicopter experiments in 1969. They
were successful, and hospitals slowly started creating their own programs.
A
Denver hospital put the first one into service in 1972. By
1980, there were 32 in the US. In the '90s, there were 231. By 2018, there were more than 1,461 air
ambulances in service. Today, air ambulances provide access to care for
about 550,000 patients a year,
according to the Association of Air Medical Services, a
nonprofit trade association.
The golden hour
Air
ambulances remain lifesavers,
especially for patients who need critical care fast.
Heart attacks, strokes and burns
all benefit from quick care. Trauma patients face much better survival odds if
treated in the "golden hour" or
as quickly as possible after injury, studies show.
Growing gaps in
available care make getting quick medical attention difficult. About 46.7
million Americans don't have access to a Level I or II trauma center within an
hour's drive from their home, a 2005 JAMA study showed. Since 2005, more than
120 rural hospitals have gone out of business, and more emergency departments
have closed in the community hospitals that remain. Both of
these trends are
predicted to increase. That means
more patients will need air ambulances.
A 'cash cow'
Demand
for services wasn't the industry's only growth driver. The Balanced Budget Act of 1997created
a new fee schedule that was much more generous to independent operators and
paid more for rural trips. Almost immediately, new companies entered the
market. Private equity firms, not hospitals, now
own the three largest air ambulance providers in the United States.
Bain Capital bought Air Medical for $1 billion in 2010 and sold it
five years later for $2 billion.
As
private companies got into the market, prices went up. Between 2010 and 2014,
the median price that air ambulance companies charged Medicare doubled to
nearly $30,000 a ride, according to a 2017 US Government Accountability Office investigation.
"They
have a cash cow on their hands," New Mexico state Rep. Liz Thomson said.
Thomson
said a state analysis also
found a 98% increase in the amount charged by air ambulance providers that
weren't covered by insurance between 2009 and 2015. When patients travel on
helicopters that are not in-network, insurance will cover little or nothing at
all.
The Association
of Air Medical Services says more firms are accepting insurance
-- about a dozen announced that they were going in-network this year -- but
still too many do not, Thomson said, and that can be a serious issue.
"If
they aren't in a network, they don't have to adhere to the usual customary fees
that insurance will pay," said Susan Rider, an employee benefits and human
capital HR consultant with Gregory & Appel Insurance in
Indianapolis. "They don't have to participate, so they don't, and then
essentially, they can charge what they want."
In
2017, Thomson introduced a bill to
cap reimbursement rates and let consumers off the hook for "balance
bills," meaning what consumers owe above what insurance pays. The bill
failed in the New Mexico Legislature, but she hopes to introduce it again.
The air
ambulance industry packed the committee hearing room when Thomson introduced
the bill, but it was not alone.
"I'm
a Democrat and introduce a lot of legislation around patient protection, so I
had a running joke that while I don't drink, I would drink a bottle of
champagne if the [insurance?] industry ever stood up for any
of my bills," Thomson said. "Sure enough, I needed to buy a bottle,
because when the chair asked who was in favor of the bill, all these insurance
people stood up and said, 'we are.' This practice is costing them a mint. It's
outrageous."
Mike Castleberry, senior
vice president of network services and business development for HealthSCOPE Benefits, a national firm that
helps major companies manage health plans, said the costs for these services
don't add up. "When you really get into the math, it starts to get
embarrassing for the folks running those businesses," he said.
"We
know what their fuel costs. We know how many hours they fly and how much it
costs for apilot," Castleberry said. "Add up all those factors, even
if you give them a 20% profit on top of that, that's still not even half what
they are charging me, which is more like 300 to 400 times what it actually
costs to fly our customers. When I can go rent a private plane and put medical
personnel on board for less than some of these bills, I know it shouldn't cost
this much."
He also
notes that a lot of patients whose bills the firm sees, who are told to take
these flights, aren't trauma cases. "They are not for a wreck on the side
of the road needing Level I trauma care," Castleberry said. "Only
about 15% of the air ambulance charges we see involve those kind of accidents.
The vast majority are patient transfers from one facility to the other."
As
hospitals specialize in certain types of care, there has been an increasing number of
hospital-to-hospital air transfers. There
are few evidence-based guidelinesabout
what appropriate use for air ambulances.
Castleberry,
who has clients across the country, said private operators aren't the only ones
making money. "County governments and city hospitals [which can have their
own air ambulance services] also see it as a revenue stream that supports their
overall programs," he said.
The actual costs
The air medical transport industry argues
that although single flights "may appear to be expensive," they are
"very cost-effective" compared with building new rural specialty care
or expanding ground ambulance capabilities.
Staffing
an independent helicopter around the clock is expensive. It costs about $3
million to run an independent air medical base that does roughly 300 transports
a year, said Chris Eastlee, vice
president of government relations for the Association of Air Medical Services.
Some in
the industry argue the problem is that the Centers for Medicare and
Medicaid Services don't pay enough. They created current rates in 2002, based
on an estimated 1998 cost pool, increasing reimbursement for inflation only. "It
was never based on real cost collection," said Rick Sherlock, the association's ex-officio
president and CEO.
About
70% to 80% of the patients whom air ambulances transport fall into these
categories that the industry argue significantly underpay, like patients with
Medicare. This payment is significantly less than the cost of the
transportation, Sherlock said.
"Medicare
pays about 60% of the cost of the flight; Medicaid pays 35% or less. Self-paid
patients pay a few cents on the dollar, and that has led to a crisis of being
able to sustain the service," Eastlee said. That means about 7 out of 10
of the association's flights are under-reimbursed, he said.
If the
government reimburses the industry more, Sherlock said, "you eliminate the
need to balance bill."
The insured pay the costs
Anderson,
who was billed $54,727.26 total for her air ambulance rescue from the Badlands,
got a letter from the air ambulance company's lawyer when she wrote to protest
the price. HIs letter explains that 75% of that company's patients are covered
by the government or have no insurance at all.
"This
governmentally mandated cost shifting means that their cost per transport must
be borne by others," the letter reads.
"In
other words, I may not have had $54,000 worth of treatment, but essentially,
they have to make up their costs somehow," Anderson said. "It's not
fair at all."
North
Dakota Insurance Commissioner John Godfread says that on average, flights in his state cost consumers $59,287.
"Some
of these bills are pretty egregious, and these are consumers who have done
everything right," Godfread said. "They have health insurance, they
ask questions ahead of time, and often, they don't get to make the choice. It's
often the hospital or the EMTs that decide to fly, but consumers are the ones
left paying the bills, and there's really no way for consumers to protect
themselves."
Andrei
Courier learned that the hard way in June. He got a $41,063.78 bill after the
in-network hospital where he took his son Jacob with breathing problems
transferred the boy to an out-of-network hospital.
Jacob
Courier's air ambulance hospital transfer cost $41,063.78.
"First,
I could have driven to that other hospital faster," Courier said. "We
also had tried to do everything in-network. We did everything right
insurance-wise, but we still faced this huge bill."
His
insurance company picked up $8,960.49 of the bill,that meant he would be left
paying $32,103.29 out-of-pocket.
"We
work hard, we pay our bills on time, and this is how we are repaid,"
Courier said. "It was so frustrating. That's money we would use for my
son's college, not for a short helicopter ride."
Courier
made multiple phone calls to the company, a lawyer and the Mississippi
insurance commissioner. He learned that the state has a law that prevents balance billing, which is when insurance
covers part of the bill and the patient owes the rest. Eventually, the cost of
the flight was forgiven.
"I
don't know what the insurance commissioner said to the company, but I finally
got a call and was told they weren't going to balance bill me," Courier
said, but he's still upset.
Med
Trans Air Medical Transport, which ran the air ambulance that day, referred
questions to the Association of Air Medical Services.
States try to help
Other
state insurance offices say usually there's little they can do, beyond holding
insurance companies to the letter of their policies. Most offices encourage patients
to call with complaints.
Though
states like Mississippi have balance billing protection, that tactic has had
limited success elsewhere, as the courts have ruled that laws affecting air
ambulances are federal, not state, jurisdiction.
North
Dakota tried another approach. Its 2015 law
required providers to disclose prices before the flight, upon request.
Hospitals that referred a patient to the air ambulance company had to let the
patient know the cost ahead of time unless the hospital determined that doing
so would jeopardize their health or safety, in which case they would be
exempt. The courts overturned
that legislation, ruling that it was a federal matter.
North
Dakota's 2017 legislation requires
hospitals to notify patients in non-emergency situations if the helicopter
takes their insurance. "We are optimistic. It is squarely in the claims
process that we have the authority to regulate," Godfread said. "It
will, however, likely be appealed all the way to the US Supreme Court."
The
Association of Air Medical Services believes that the states can "help
patients right now and help address the issue of balance billing and take
patients out of the middle," Eastlee said. "Some insurance only covers
a fraction of the price for those transports. We can work together."
Virginia
is trying another approach. Starting in March, its new law will
require hospitals tell patients who don't have an "emergency medical
condition" that they have a choice between air and ground transportation. The
Office of Emergency Medical Services must establish a mechanism by January to
give the patient a "good faith estimate."
Congress and the law
It will
probably take an act of Congress to regulate the air ambulance industry.
The FAA Reauthorization Act,
passed in October, created an advisory committee with all the players involved
who will focus on improving price transparency. The law gives the Department of
Transportation and the Department of Health and Human Services authority to
create new rules. It establishes a hotline and website to track complaints, and
it creates an aviation consumer advocate position.
"It
was important to me that we craft a solution that not only empowers consumers
and patients but lays the groundwork for long-term solutions in the
industry," said US Rep. Rob Woodall of Georgia, who added the air
ambulance-specific language to the bill. "By creating an aviation consumer
advocate, much like the taxpayer advocate for those with complaints against the
IRS, my amendment provides a clear mechanism through which consumers can pursue
enforcement or corrective actions -- which to this point had been absent in
these situations."
The
industry association said that it supports the FAA Reauthorization Act because
it "enhanced consumer protection" and that the industry does want
more transparency and accountability, Eastlee said, "but we also have to
work to sustain the service."
Sherlock added, "the amendment does
not address the underlying problem to reduce the patient's balance bill."
For
Anderson, Congress is too late. She took her own action. Instead of paying
$41,029.53 out of pocket, she offered to settle for $4,100, on top of the
$13,000 her insurance paid.
"I
thought, I didn't want them to sue me and wanted to get this out of the way and
thought 10% more was reasonable," Anderson said. For three months, she
heard nothing from the company, so she wrote to withdraw her offer. The next
month, the company offered to negotiate, documents show, but eventually, it
accepted her offer.
Anderson's
recovered from her injuries. And Cody, her horse, is OK. She brought him some
extra feed to thank him, as the X-rays detected another medical issue she is
now in treatment for. But the experience with the air ambulance still bothers
her.
"For
a little more than 45 minutes of service, they were asking for more than what
my surgeon charged. It's not fair," Anderson said. "I've since talked
to other people who have been transported with no surprise bills, I think air
ambulances can run in a fair manner, but the way it is currently done seems
unfair and unreasonable. No one should feel shocked or panicked by a bill like
this. No one ever."
Correction: A
previous version of this story misstated the name of Bain Capital.
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