Sunday, December 27, 2015

Air ambulances can save lives — but out-of-network bills can be a shock

HELENA — When Ron Pecarina woke up on Saturday, July 19, 2014, he couldn’t move his right leg.

His wife, Lori Bigwood-Pecarina, pulled the car out of the garage, and Pecarina crawled to it — it was the only way he could move. They went to the emergency room at St. Peter’s Hospital, where doctors did a number of tests to see why Ron’s leg wasn’t functioning.

After a few hours, an emergency room doctor came into Pecarina’s room and said, “We’re flying you out of here.”

Doctors couldn’t determine what was wrong, and Pecarina’s condition was deteriorating. He could no longer use his left leg to scoot himself and needed to get to a bigger hospital with a neurologist.

The doctor told him: “You have a choice, Great Falls or Missoula, and you have to choose now. The ambulance is waiting for you, you have to decide.”

The husband and wife picked Missoula. But they didn’t get to choose the company that flew him there, which was Summit Air Ambulance.

Summit is a standalone service that doesn’t contract with any insurance networks. A few months after Pecarina came home from Missoula, in the midst of extensive physical therapy, he and Bigwood-Pecarina got a $35,000 bill for their flight.

Their situation is one more and more Montanans have found themselves in over the past few years as air ambulances that don’t contract with insurance companies have moved into the state. Over the past few years, more than 20 people and families have come to the auditor’s office with pleas for help fighting bills of up to $85,000.

Air ambulances generally fall into three categories: hospital-based services that are a part of the contracts those facilities negotiate with insurance companies and providers; nonprofit operators that are affiliated with hospitals; and for-profit companies like Summit.

It’s a complicated issue with fingers being pointed in almost every direction. Patients say flights should be covered by insurance. Not all air ambulance companies want to do that. The state has its hands tied when it comes to regulation. Just about the only thing everyone agrees on is that insurance, either private or government-run, doesn’t pay enough.

Part of the problem is who hospitals call when they need to transport a patient who is sick or injured.

If the emergency room had called Benefis Health System Mercy Flight in Great Falls to pick up Pecarina and take him back there, the flight would have been covered under his insurance. Benefis’ plane is part of the hospital’s insurance contracts.

But in 2013, St. Peter’s had an agreement to call Summit before any other air ambulance, even though that meant putting patients on fights that couldn’t be covered by their insurance.

“As a department leader, it is my understanding that the hospital did enter into an agreement with Summit that out of the emergency department initially they would be the first call,” said William Gallea, chairman of the emergency department at St. Peter’s.

That’s how St. Peter’s operated until, at the request of CEO Nate Olson, Gallea and his department were told to consider the financial aspects of air ambulance service.

“We were told in the same meeting that the agreement was to no longer be enforced,” he said.

At the time of her husband's flight, Bigwood-Pecarina even asked if going to Missoula or Great Falls would be less expensive. “They said no, they’re about the same,” she said.

Increasing problem

There are 13 air ambulances operating in Montana; about half contract with at least some insurance providers. Some hospital-based services have been around for decades, like ALERT in Kalispell, which can trace its 40-year history back to rescuing loggers from remote forests.

Independent providers are new to the state. They’ve moved here over the past decade, saying they’re bringing much-needed flights to rural, under-served areas. Many doctors agree — Montana is a rural state, and getting patients to hospitals quickly is critical.

St. Peter’s, for example, is a level 3 trauma center. It provides some specialist care, but doesn’t have neurosurgery. Other specialists aren’t covered every day. It uses air ambulance to get patients to larger hospitals when every second counts in terms of better medical outcomes.

Flying patients is also a profitable business. Air Idaho Rescue, which has a helicopter based in West Yellowstone for part of the year, is a subsidiary of Air Methods Corp. Air Methods traded last week at $41.52 on the New York Stock Exchange, has $1.1 billion in revenues, a profit margin of 10.65 percent and a return on equity of 22.12 percent.

A sampling of 19 air ambulance bills received by Montanans and reviewed by a legislative interim committee this year shows the average cost per flight on an out-of-network air ambulance was $53,397. The highest bill was $85,789.34.

A breakdown of one 2013 Summit flight for $70,777 showed the service charged a base rate of $10,500 and $109 per mile, according to a document compiled by the Legislature's Economic Affairs Interim Subcommittee. That committee also provided a document that said a Summit flight costs $17,694 per hour for a single-engine plane, while it costs $18,000 an hour to charter a Boeing 737.

Rates vary, but generally hospital-based providers charge less. St. Vincent Healthcare in Billings, for example, charges $9,919 to take off and $80 per mile once a patient is on board.

“They’re not only charging more upfront but not accepting insurance as well,” said Randy Laird, MedFlight manager at Billings Clinic. That hospital’s fixed-wing serves an area of 188,000 square miles including parts of the Dakotas and Wyoming — more land than the state of California.

His program has a collegial relationship with St. Vincent Healthcare’s air team and works closely with Benefis’ crew.

“Hospital-based systems really supported each other,” he said. “We do what’s right for the patient, that's a huge difference and under-appreciated, to do what’s right for the patients. With community-based programs, you have to wonder.

“I’m not against community-based programs,” Laird said. “They do bring some value. We just want them to do it fairly, demonstrate value to the patient, fly them safely and for the right reasons.”

Laird said Billings Clinic misses 10 to 12 flights a month while its plane is out on other calls.

That sort of need is why Summit is in Montana, said Ron Walter, director of business relations and development for REACH Air Medical Services, Summit’s parent organization.

Summit came to Helena in 2014. “Shortly after we opened in Bozeman, the folks at St. Peter’s invited us to discuss placing an aircraft in Helena,” Walter said.

Patients were having to wait up to two hours to get an aircraft to transfer them to another facility, Walter said.

Insurance issues

Walter said Summit doesn’t contract with insurance providers because it can’t exist on what insurance companies reimburse.

Medicare will pay about $4,400 per takeoff on airplane flights and about $12.50 per mile. Private insurance pays more, but not enough. St. Patrick Hospital in Missoula, for example, said it was losing $1.6 million a year on its program, said CEO Jeff Fee.

When hospitals negotiate with insurance, Walter said, air ambulance is just a piece of the puzzle, and they can make up for deficiencies in other departments.

“That way they know when they have a patient that comes in, they may be losing funds on the air transportation side but gain those funds on the downstream revenue of having that patient at their hospital,” he said.

Insurance companies are less flexible with Summit, he said. “They don’t want to negotiate, or at least they haven’t been willing. It’s a set price, period.”

Walter said Summit does provide what it calls compassionate billing.

"Summit is a very compassionate company, billing-wise," he said. "You'll find that very few people pay the entire bill.

He said Summit will work with patients to reduce their bill based on financial need. Summit's parent company, REACH Air Medical Services, provides $250 million in charity care a year, he said.

Pecarina’s flight was $35,000. His insurance provider, Cigna, paid for about 70 percent of that, leaving him with $9,000 in out-of pocket costs, which they paid after two rounds of appeals. Bigwood-Pecarina said through the appeals, Summit offered them the opportunity to "pick an amount" they felt comfortable paying, but never provided details about the deal in writing. She didn't want to accept that offer while still fighting insurance for payment.

Cigna paid part of Pecarina’s bill because, though Summit doesn’t contract with insurance providers, it will accept payment from them. Insurers will pay for what’s called “usual, customary and reasonable charges” for out-of-network expenses. For air ambulances, this is typically much less than the total bill, leaving patients responsible for the difference — called a balance bill. If patients purchase a membership from Summit for $65 a year, Summit will not balance-bill the patient for the difference.

“I never thought about the air ambulance being uniquely different or out-of-network. That never crossed my mind,” Bigwood-Pecarina said. And the couple’s bill is one of the lower ones.

Amy and Pat Thomson in Butte ended up with a $56,000 bill for the flight that saved their daughter Isla Rose's life.

On Jan. 18, 2014, then 2-month-old Isla went to St. James with a cough. A few hours later doctors determined her heart was failing; she was later diagnosed with a coarc and a hypoplastic aortic arch, which means blood wasn't flowing through her heart properly. She was put on a Northwest Airlift flight to Seattle.

Isla survived the flight and surgery to repair her heart. After three months in recovery, the family came home to Butte. Isla was taking 10 different medications every three hours and just starting to nurse again — she couldn’t while in Seattle because the stress was too much for her heart.

Somewhere in that jumble, the Thomsons got a bill.

“At first there’s shock,” Amy Thomson said. “It’s just one of those things where we have good insurance, it’s part of the medical process, how would this not be covered as part of your health insurance?”


Jesse Laslovich, chief legal counsel to Montana's Commissioner of Securities and Insurance Monica Lindeen, said there’s no model in place to stop what’s happening.

He said air ambulance service is critical for Montana but needs to be regulated.

“We’re not trying to get involved in medical decisions,” Laslovich said. “When someone is in the wilderness, there’s no control. When somebody is in the hospital and stabilized, and the medical decision is made to go to Salt Lake or Seattle, I think it is reasonable to request the hospital call an in-network air ambulance provider."

The North Dakota Legislature has tried to pass legislation that would require hospitals, EMTs and police officers to use a primary call list that only includes air ambulances that contract with insurance providers.

Valley Med Flight, a provider operating in North Dakota, sued, saying that the law violated FAA rules, which deregulated the airline industry and prevented states from regulating airlines.

“Hospitals have a responsibility to their patients that they are reaching out to air ambulance providers who are in insurance networks,” Laslovich said.

St. Peter’s in Helena now has a call list in the ER that notes what air ambulances are part of insurance networks.

In the meeting with the CEO last spring, Gallea said he was told to stop calling Summit first when a patient needed transferred.

“I was asked basically to consider these financial aspects in addition to the medical aspects when we have a transfer patient.”

Walter said preferred provider lists — with in-network options at the top — aren't the solution.

“The biggest issue that’s being focused on right now, and the biggest push is from the insurance network,” he said. “They’re creating the issue of we want everybody in-network.”

Summit reached out to Allegiance, which administers benefits plans for companies, last month.

“Right now, we’re in the learning phase with them,” he said. “At least we’re opening up a dialogue.”

Summit is visiting hospitals across the state, holding training sessions at places like the new hospital opening in Big Sky.

Walter acknowledged those training sessions help market Summit across the state so hospitals know to call them when a patient needs transport but said the sessions are valuable for rural facilities.

“We do a lot of outreach education,” he said. “We also think it’s an obligation for us to share our expertise and also learn from our providers. We try to sit down with regional trauma centers and integrate the care that we’re providing to the protocols of these facilities.”

Walter points to memberships as a way for families to avoid a balance bill for flights on community-based providers. For $65 a year, Summit will take whatever a patient's insurance company pays and not balance-bill them the difference.

Laslovich questioned the need for memberships. “If you’re willing to take money from me annually in order for the air ambulance to not balance-bill, why do you need that in the first place?”

Both the Thomsons and the Bigwood-Pecarina families purchased memberships after their flights.

“You bite the bullet, and you pay their stupid membership fee,” Thomson said. “When we got home, Isla couldn’t get sick. Our cardiologist said ‘She gets a respiratory infection, you’re on a life flight again.' ”

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