In today’s America, 115 million people – one in three people – live in rural areas where getting urgent medical care for events like cardiac emergencies, stroke, and trauma is extremely difficult due to the fact that appropriate medical facilities are so far away. Since 1990, more than 22% of America’s hospitals have closed. According to the Center for Rural Affairs, rural hospitals have been closing at a rate of nearly one per month since 2010.

Getting timely, appropriate medical care is deadly serious. Trauma doctors refer to the first hour after a traumatic injury as the “Golden Hour” because during this critical window, the right kind of medical care can lead to vastly better outcomes with regard to saving lives and preserving quality of life. 85 million Americans who live more than one hour from a hospital with a Level 1 or Level 2 trauma center by ground transport can access these centers within the Golden Hour because of air medical services. For these Americans there is literally no way to get appropriate emergency care without air transport.

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Air medical transport providers, which most often use helicopters, provide a very high level of life-saving care that involves highly-trained nurses, paramedics, pilots, and state-of-the-art medical equipment. We only respond when called upon by a first responder or physician – we do not self-dispatch. And when they call, we go immediately, helping to expand the reach of hospitals and trauma centers and ensuring that rural communities maintain access to medical care. We do so in one of the most regulated industries in the country.

There is an unsustainable problem, however: air medical service providers are being squeezed by drastically low government reimbursement rates and some insurers who refuse to negotiate in good faith. The result is that the burden of paying for air medical transport is being shifted to insured beneficiaries, and worse, real lives and rural communities are being put at risk. 

This past weekend, I spoke to the National Association of Insurance Commissioners to discuss this challenge and propose a way forward. In my testimony, I explained that being ready to deploy advanced aircraft and highly-trained crews 24 hours a day, seven days a week, 365 days of the year costs about $3 million annually per air base. Each air base transports roughly 300 patients a year. At Air Methods, we are proud of our service and the benefit we deliver to our patients and the communities we cover. But, we are also illustrative of a deeply flawed system. 

More than 70% of our transports are reimbursed by either Medicare, Medicaid, other government sponsored insurance, or are uninsured. Unfortunately, the current reimbursement rates under these programs are dramatically below our costs. The average Medicare reimbursement is about 50% of actual transport costs. In many states, Medicaid covers an even smaller portion of the cost for a transport. While Medicaid reimbursements vary by state, some states are reimbursing as low as 1/25 of Medicare. Pennsylvania and Utah Medicaid, for example, reimburse only $200 per transport. That amount doesn’t even cover the cost of fuel, which is $450 for the average transport.

If a provider is reimbursed substantially below cost for 7 out of every 10 transports, it means the remaining transports are essentially paying for the whole system. While most private insurers are good actors who pay at or close to full billed charges, there are some in the industry who will not negotiate in good faith and refuse to recognize the true cost of service.

So how do we preserve critical air medical transport service for communities all over the country with a solution that is cost-effective, fair to all patients and other stakeholders, and durable?

First and foremost, we must fix the dramatic shortfall in Medicare reimbursement by passing S. 1149 and H.R. 822, which helps bridge the gap in payments versus actual costs and enables the issue to be studied in depth. The Medicare fee schedule for air medical transport was set in 1998 and was completely disconnected from actual cost data – this status quo cannot hold. At the local level, states must take similar action to align reimbursement rates for Medicaid with the true cost of service. And lastly, insurers and air medical transport providers must work in good faith to forge fair in-network agreements.

Air medical transport is essential for rural communities to have access to high quality, timely trauma, cardiac and stroke care. It is time to act to preserve this critical service. 

Mike Allen is the President of Domestic Air Medical Services at Air Methods, the world’s largest air medical provider. He is an airline transport pilot and has served as a safety representative, aviation manager, training captain/check airman, and operations manager, and served as a pilot in the U.S. Army for five years.


The views expressed by authors are their own and not the views of The Hill.