The air medical service industry is faced with dramatically low government reimbursement rates and consistent reductions in reimbursement payments by many private insurers for the emergency medical services provided to patients in need.
- The majority of emergency air medical providers are reimbursed far below the cost of their services on 70% of transports.
- This is because 70% of transports are patients who have Medicare, Medicaid, other government insurance, or are uninsured. The reimbursement rates under these programs fall dramatically below the true costs of providing service: the average Medicare reimbursement only covers 50% of actual transport costs, and in many states, Medicaid covers far less (as low as 1/25 of Medicare in some states).
- While many private insurers do reimburse at or close to full cost, certain insurers are arbitrarily lowering reimbursement and refusing to recognize the true cost of service.
- In effect, a small portion of the transports must support the entire system, resulting in an unavoidable cost-shifting environment that puts patients in the middle and threatens access for rural communities.
- Since the enactment of the Affordable Care Act, Medicare and Medicaid transports are increasing and private insurance transports are decreasing.
The costs of providing care are very high and are only going up.
- This is due to advancing technology in medicine and aviation, adding safety infrastructure, maintaining compliance with regulations, and contending with an aging population.
- The costs of operating bases on a 24-7-365 basis are high, and the vast majority of those costs are fixed.
- Providing a high level of life-saving care involves highly-trained pilots, paramedics, nurses, and other medical professionals, and state-of-the-art medical equipment.
Rural areas bearing the brunt
The result is a worsening cost-shifting environment in which rural areas are impacted the most. Air medical bases are closing around the country, and mostly in rural areas, due to financial insolvency.
- It is rural communities who rely on emergency air medical services the most. Since 1990, more than 22% of America’s hospitals have closed. Rural hospitals have been closing at a rate of nearly one per month since 2010.
Operation in a dual-regulatory environment
The air medical community exists at the nexus of healthcare and aviation, two of the most highly regulated industries in the U.S.
Air medical services have taken action to not only maintain compliance, but to exceed compliance standards through proactive voluntary efforts.