This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Shawn Miller, a chaperone for a Mormon youth conference in picturesque Argyle Canyon north of Price, watched with pride as his 16-year-old daughter scampered to the top of a metal pole — a feat of strength a lot of the boys couldn't pull off.
The July 2012 conference had been a good mix of games, devotionals and service projects, with this day mostly about fun as kids raced from one activity to the next. After her successful pole climb, his daughter went for the zip line.
In hindsight, Miller says, it's easy to see the zip line wasn't safe, since it lacked harnesses. But it stayed close to the ground except for one section where the drop was roughly 20 to 30 feet. His daughter, perhaps worn out from her climb and nervous about the ride, lost her grip at this exact spot and fell hard on her back.
Just like that the mood morphed from fun to frantic as Miller rushed to his child and someone called 911. Dispatchers requested a medical transport helicopter from the Duchesne area, operated by Classic Air Medical, that took an hour to reach the area and airlift his daughter to safety.
Thankfully, Miller says, she had only a concussion and some minor back injuries. But a few weeks later, a bill showed up from the for-profit air-ambulance company for roughly $46,000.
"I was just stunned," Miller says. "I didn't think it would be that much."
A history professor at Brigham Young University, Miller was able to get his insurance provider, Deseret Mutual Benefits Administrators to negotiate the bill down to roughly $21,000 — a number that's still dumbfounding, he says.
"If a person didn't have good insurance coverage, that could be financially disastrous for a family," Miller says. He's forever grateful for the help that day, but he questions the for-profit air-ambulance business model.
"Lifesaving is, I suppose, a marketable commodity," he says, "but when you're the only one that can do it and you charge whatever you want, it seems outrageous."
It's a reaction many families have had recently as for-profit air-ambulance companies have spread across the country. Called into service when time is of the essence and cost is the last thing on a consumer's mind, the companies are able to charge almost any amount for their services.
While ground ambulances can be regulated, Guy Dansie, emergency medical services program manager for the Utah Department of Health, points out that air ambulances fly right over state jurisdictions — and therefore are subject to little if any oversight, even if the company that operates them is based in Utah. The companies also don't have to share cost information with the public or state regulators, he says.
"We realize they have to have profit margins to operate at," Dansie says, "but by the same token there is no ceiling for the prices" they can charge.
North Dakota recently tried to rein in high billings, passing a law that required air-ambulance companies to share price information with hospitals, dispatchers and patients.
But a Utah-based chain of for-profit ambulance companies took North Dakota to court over the law and won, thanks to the Airline Deregulation Act.
Critics say that decades-old law, originally designed to protect consumers, is full of loopholes broad enough to fly a jumbo jet through — or a host of profit-hungry air ambulances.
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Dakota dust-up
The Salt Lake Tribune requested records of air-ambulance complaints from insurance divisions in all 50 states. Most agencies kept records private or said they do not document such complaints because they are unable to regulate the companies.
But documents from nine states show that between 2013 and June 2016, insurance departments reviewed 55 incidences in which consumers complained of $3.8 million in combined charges — an average charge of $70,000 per trip.
Because many of these providers operate out of network, insurance covered only about 33 percent of these charges, leaving patients in these incidences with $2.8 million combined in potential out-of-pocket payments.
North Dakota's deputy insurance commissioner, Rebecca Ternes, says a steady stream of complaints over sky-high billings prompted her office to prioritize tracking air-ambulance companies during the past several years.
Through an open-records request, Ternes provided documentation of 25 consumer complaints from 2013 to April 1, 2016. Twenty of the complaints were against companies that are part of the Air Medical Resource Group (AMRG), headquartered in South Jordan.
During that time, AMRG companies charged a total of $884,244 for 20 flights. And since AMRG has refused, according to court filings, to become a participating provider with the state's major health insurance carrier, just 33 percent — $295,846 — of those charges were covered by patients' insurance.
In April 2015, North Dakota passed House Bill 1255, seeking to prevent air ambulance price-gouging. The bill required air-ambulance companies to provide hospitals and dispatchers with information about their prices so that patients could be informed of expected costs for medical transportation before takeoff.
It also created two tiers of providers, putting certain air-ambulance companies — those that participated with at least 75 percent of the state's insurance carriers — on a primary list that dispatchers would call first when someone needed a medical flight. If none of those companies was available, then dispatchers could reach out to other air-ambulance providers.
The bill was quickly challenged by Valley Med Flight — a company under Utah's AMRG — which prevailed in court March 21, 2016.
The court noted that the legislation essentially forced air-ambulance companies to sign up with Blue Cross Blue Shield (BCBS) of North Dakota, because that one provider accounted for 50 percent of the insurance market in the state.
Valley Med argued that it had agreed to a one-year contract with BCBS when the law passed, but the reimbursement rates it received were well below the market rate and could have forced the company to shut down operations.
AMRG attorney Jesse Riddle told The Tribune that the state focused on air transport while giving insurance carriers a pass.
"North Dakota, instead of going to Blue Cross Blue Shield and saying, 'Hey, you ought to do a study and quit leaving all these people with balance bills,' they went and said, 'We're going to regulate the air carriers who don't charge that much,' " Riddle says.
Ultimately, Judge Daniel Hovland wrote that the law, while enacted in "good faith," was pre-empted by the 1978 Airline Deregulation Act, which prohibits states from enforcing laws "related to an air carrier's rates, routes or services."
"It is clear that Congress has assumed the field in the arena of air carrier regulation," Hovland wrote, "and noble intent does not save the law from pre-emption."
A month after North Dakota's court loss, U.S. Sens. Jon Tester and John Hoeven — representing Montana and North Dakota, respectively — pushed to have air-ambulance companies removed from the Airline Deregulation Act in an amendment to the Federal Aviation Administration's reauthorization in April 2016. The effort failed, but the senators have expressed interest in pressing the fight again in the future.
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'The perfect storm'
n the 1980s and '90s, helicopter ambulances were generally based at major hospitals that had the resources to invest in powerful twin-engine aircraft and highly qualified in-flight medical teams. Operating at a chronic loss, these companies lobbied the Centers for Medicare and Medicaid Services for higher payments, according to Michael Abernethy, chief flight physician for the University of Wisconsin's Health Med Flight.
In 2002, the federal agency complied, increasing reimbursements by 434 percent for helicopter transports, regardless of quality.
"People realized, 'We could start our own helicopter company and get paid this money because the payment structure is based on a high-quality programs, and we can do it cheaper,' " Abernethy says.
"The perfect storm was aviation deregulation," he says. "A lawyer found a loophole that pulled medical carriers into the transportation industry."
Rick Sherlock, president of the Association of Air Medical Services, a Washington, D.C.,-based lobby group for the air-ambulance industry, says it wouldn't work to have any other body regulate air ambulances. "If you have enabled states to regulate the equipment on an aircraft, you end up with artificial boundaries in the sky," says Sherlock, noting medical flights routinely cross state lines.
Abernethy contends deregulation is enabling new for-profit players to set up helipads at rural hospitals and airports using low-cost, single-engine, often aging helicopters.
"They hire people with minimal experience," Abernethy says. "People are working now who wouldn't have been considered for an interview 15 years ago."
He says these companies sometimes charge double what hospital-based carriers bill, then pursue patients for what insurers decline to pay — usually the lion's share.
Utah's AirCare — part of AMRG — charges a $17,900 base fee, plus $248 per loaded mile, according to a billing statement acquired by The Tribune. Nationally, the average flight is 55 miles, a trip that AirCare would bill at $31,540.
On the nonprofit Intermountain Life Flight or University of Utah AirMed, the same flight would cost $15,930 and $20,025, respectively.
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'A very expensive decision'
Sherlock says bills can seem excessive, but noted that it's a reflection of escalating costs in health care and not the fault of any company.
"Our programs are obligated to act, within aviation-safety parameters, when requested," Sherlock says. "Requests come from a medically trained first responder at the scene or a physician. [Crews] have to be prepared 10 times out of 10 to treat the sickest patients, not knowing if that patient can pay."
And efforts like North Dakota's to remove his industry from the Airline Deregulation Act would mean every state setting up different barriers and requirements that would complicate and delay emergency missions.
"Once you start pulling that thread, you end up setting up artificial borders in the sky," Sherlock says, "and that's not going to be good for patients."
He also bristles at the notion the industry is unregulated.
"Our industry sits at the junction of two heavily regulated industries — aviation and health care," he says, and it makes sense for the FAA to oversee the aviation industry.
When it comes to billing, he says, his industry has to charge some patients more to make up for those who are underinsured or have no insurance. If patients feel abused, he says, they have the right to file a complaint with the U.S. Department of Transportation.
And it's the insurance companies that should shoulder the blame for the sky-high bills anyway, Sherlock says. Many insurance carriers have tried to compensate for costs resulting from the Affordable Care Act by skimping on ambulance reimbursements, he says, and oftentimes a single carrier can dominate an entire state and thus set whatever reimbursement rates it likes for its in-network air-ambulance providers.
For North Dakota's Ternes, however, it still doesn't make sense to group air-ambulance companies under a "deregulation" act meant to encourage a free and competitive marketplace. Travelers comparing commercial airline flights for their next vacation is decidedly different from a person being wheeled on a stretcher to a medical chopper.
"These are not people shopping around for best prices; otherwise we would not be having so many complaints," Ternes says. "These are people at their most vulnerable and someone else is making a very expensive decision for them."
Twitter: @brianmaffly, @ericspeterson —
Sky-high costs
Montana, New Mexico and Michigan provided The Salt Lake Tribune with consumer-complaint records that did include air-ambulance companies' itemized billing charges. Across 75 complaints, records show an average "base charge" of approximately $21,000, with an average charge of $236 per mile the planes and helicopters traveled.
On the high end was Rocky Mountain Holdings — the billing company of Air Methods, the largest air-ambulance company in the nation — charging $333 per rotary-wing mile. On the low end was Airlift Northwest, which charged $90 per-fixed wing mile.
Utah-based AMRG also listed rates for a few of its companies in those two states' records. Guardian Flight in Wyoming was called for a transport in Montana, whose records show a patient being charged $247 per fixed-wing flight mile in one instance. Valley Med Flight charged $139 per fixed-wing mile for a flight from Michigan to Wisconsin, and $125 per fixed-wing mile for a flight that stayed within Michigan's borders.