4-Oct-2019 Source: Air Methods
Air Methods, the leading air medical service provider, released public comments to the Wyoming Department of Health regarding a Medicaid waiver application that would take decisions from physician and first responders and turn them over to a remote call center that uses financially driven criteria to determine the need for a transport, putting Wyomingites’ lives in danger.
The Wyoming Medicaid Coordinated Air Ambulance Network Waiver Application would expand Medicaid in Wyoming for emergency air medical coverage by creating a public utility model where the state would set the payment rates for such services and determines the number and placement of medical aircraft in the state. These decisions would be decided on budgetary limitations, not medical necessity or proximity to critical locations.
“The air medical public utility model Wyoming is pursuing is dangerous to patients and costly for taxpayers. Currently, air medical providers keep their costs in line through fair market competition in the state,” said Chris Myers, executive vice president of reimbursement at Air Methods and member of the recently created Air Ambulance and Patient Billing (AAPB) Advisory Committee.
In its public comments regarding the waiver application, Air Methods strongly objects to this state takeover that would severely limit access to life-saving medical care and could ultimately drive up healthcare costs for Wyomingites not receiving expeditious, high-quality care, and transportation they need for time-sensitive medical emergencies.
Air Medical’s Significant Fixed Costs
Wyoming is a highly rural state with limited access to high level Trauma centers, and patients often need to be transported to specialty hospitals several hundred miles away, frequently across state lines, to receive the best care. Air Method’s largest air medical base in Casper, branded Wyoming LifeFlight, requires a specialized crew of pilots, mechanics, and clinicians to staff and maintain both the helicopter and fixed-wing operations at Casper/Natrona County International Airport. They respond to communities and rural hospitals who depend on the base. This base also has medical directors who oversee the clinical scope of practice of Wyoming LifeFlight.
The cost of running each air medical base is approximately $2.9 million annually, with 85% of those costs being fixed. In its public comments, Air Methods writes that over the past 10 years the gap between the cost to provide emergency air medical care and reimbursement for government-sponsored patients has only grown wider. Today, more than 70% of air medical patients are covered by Medicare, Medicaid or are uninsured, yet government programs on average reimburse less than 30% of the operational costs for transporting these patients due to payment rates that have not been updated in 21 years. Air Methods notes in its comments that “…[T]his severe underpayment is putting growing pressure on the health care system and creating an unsustainable cost-shift to those with private coverage… this shortfall in government reimbursement threatens access to all emergency air medical services, especially in rural communities.” (p. 5) The solution to the ever growing financial gap between air medical transport operating costs and the reimbursement is not transferring the management of this service to a public agency, but rather, to properly adjust Medicare and Medicaid reimbursements rates.
Higher Costs for Patients and Taxpayers
A chief objective noted in the state’s waiver application is to reduce its Medicaid costs and protect patients from surprise balance bills from air medical providers after care delivery. However, the public utility model proposed in the waiver application would only escalate the state’s healthcare costs and worsen patients’ health outcomes, by inevitability driving up personal healthcare expenses. For example, by reducing the number of flights, patients would require longer hospital stays at less capable facilities which drive up cost and recovery time.
The state of Wyoming should use it own data rather than anecdotal evidence of “$30,000 to $100,000” bills when in reality. Their own study shows that 90% of Wyoming patients pay nothing at all, and on average pay $300 out of pocket for emergency air medical services.
Air Methods has spent the last two years negotiating in-network agreements with commercial health insurers. The company is now an in-network provider for more than 35% of its privately-insured patients, and continues to work on adding in-network agreements. However, despite its efforts “Air Methods has not yet been able to negotiate an in-network agreement with the largest health insurer in Wyoming but has been successful with the major health plans covering most our privately insured patients in the neighboring states.” (p. 5) Plus, Air Methods recognizes that going in-network “… is the best and fastest way to immediately provide coverage and support to Wyoming patients at no additional cost to the state and to eliminate balance bills for patients.” (p. 5)
Air Methods also notes in its comments that Wyoming’s own Division of Workman’s Compensation confirmed that covering emergency air ambulance claims in full would result in a premium increase of only $11 annually for a small employer. (p. 6) Additionally, according to testimony before the Montana Legislature Joint Economic Affairs Subcommittee in 2016, and supported by national health insurance data, covering air medical services in full represents about $1.70 of the average monthly premium. (p. 6) This waiver application is not the most appropriate use of taxpayer dollars to solve a purported problem that the state’s own data shows does not exist.
Violation of Federal Law
The state’s waiver application is further problematic, Air Methods notes, as it attempts to circumvent the Airline Deregulation Act of 1978, which sought to protect air carriers and consumers from state governments seeking to control air services. In short, the waiver application would prevent air medical providers from delivering care and transportation in Wyoming if they do not sign a contract with the state, which is a direct violation of federal law. If approved, Wyoming’s public utility model would create a state-run monopoly that would only result in diminished levels of service at lower quality and higher operational costs for rationed care. The state’s proposed waiver application will actually spend 18% more on air medical services than is estimated to be currently spent in the state, despite cutting the number of aircraft and patient transports. (p. 6-7)
Protect Wyomingites Through Sensible Regulation
In closing its comments, Air Methods urged the Wyoming Department of Health and lawmakers to abandon the waiver and pursue sensible air medical reforms that protect patients, taxpayers and air medical providers. For example, Air Methods recommends the state conduct a study to ensure an adequate number of aircraft exist in the right areas of the state to support, and not compete with, ground transportation services. In addition, Wyoming should require air medical services to be covered as an in-network benefit by commercial health plans doing business in the state and update its own Medicaid fee schedule to better cover emergency air medical operational costs.
“Through decades of operational expertise in this health care industry, Air Methods knows the Waiver Application would actually be detrimental to the Centers for Medicare and Medicaid Services public health objectives of providing higher quality care, improving access to this care for Medicaid beneficiaries and driving a better quality of life for beneficiaries,” Air Methods’ comments read. (p. 14)
