Sunday, March 20, 2016

Disparity in life-flight companies' profitability reviewed

A Summit Air Ambulance helicopter takes off from a head-on collision on Montana Highway 287 in this file photo.

Why can St. Vincent Healthcare in Billings profit from its medical flights while private companies that often bill more than the hospital say they won’t contract with insurers because they don’t pay enough to turn a profit?

That’s one issue a working group meant to look at possible solutions to Montana’s air ambulance woes discussed at their first meeting Friday. The group has representatives from hospital-based and independent air-ambulance providers, insurers, entities that self-ensure, state lawmakers and consumers.

The state auditor’s office received more than 20 complaints last year from Montanans who have received large bills for the medical flights, some more than $100,000.

“We feel helpless because we have some entities that are willing to work with us and some that are not willing to work with us,” said Jesse Laslovich, chief legal counsel to Montana State Auditor Monica Lindeen.

Laslovich said last week he got a call from a woman whose son was on a flight from Bozeman Deaconess to a Denver hospital. The flight cost $100,000, and she was balance billed $90,000, Laslovich said.

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 that may or may not contract with insurance.

St. Vincent Healthcare Chief Flight Nurse Chad Cady said his program is expensive to run, perhaps one of the more costly in the state because of the types of services it can offer — but it still makes money and doesn’t shift costs to other departments in the hospital.

“It is a very expensive entity to operate, but when I have to look at my budget and justify it to my CFO and explain if we are in the red or are we in the black, the numbers show it.”

St. Vincent charges $9,916 per takeoff and $90 per mile once a patient is on board for fixed-wing flights and $11,530 per lift-off and $100 per mile on helicopter flights. The standalone service NorthWest MedStar charges $13,116.40 per takeoff and $110.10 per mile for planes and $15,243 per takeoff and $133.10 per mile for helicopters, according to a survey sent out by the state.

Bill Bryant, who works with REACH Air Medical Services, which operates Summit Air Ambulance in Helena and Bozeman, said hospitals can shift overhead costs around to help make their programs profitable and cited previous testimony from the CEO of St. Patrick’s in Missoula that the facility lost $1.6 million a year on its program before shutting it down. Summit does not contract with insurers but has said it has started talking with one about the possibility.

“If they were adequate, both of those hospitals would at least be breaking even,” he said.

An independent review by an industry analyst has shown Summit has charged patients $15,965 per takeoff and $175 per mile on a fixed-wing flight.

Northeast Montana STAT Air Ambulance has been on both sides. When it was just part of Frances Mahon Deaconess Hospital, STAT could share the cost of some employees like nurses with the hospital but lost that ability after 2007 when it became a standalone provider for a four-hospital co-op that covers a large part of that remote corner of the state.

That year, Clay Berger, Northeast Montana STAT air ambulance cooperative program director, said it took 300 percent of what Medicare reimburses for flights to make a 10-to-15-percent profit. "That is why we enjoy that Allegiance contract of 250 percent, but when you get down into those areas of Medicaid, Medicare … we’re going backward.”

Some providers are open to sharing what they charge per flight — a breakdown of the rate-per-mile once a patient is on board and the fixed fee charged per takeoff — while some, typically the independent ones, aren’t. What’s not known now is how much flights cost the providers, something that would help show why St. Vincent can make a profit but others say they can’t.

At the meeting, Ronald Dewsnup, president and general manager of Allegiance Benefit Plan Management, said he could provide information on all air ambulance claims his company has dealt with before the next meeting April 7.

Insurers want to know the exact costs for providers so they know what percentage of costs they’re paying, and providers say they want to get equal, fair payments from insurance.

Bryant said it’s critical to look at the payer mix providers deal with — what percentage of people who take flights are insured by Medicare, Medicaid or private insurance or who don’t carry insurance. That varies widely from county to county and can change how successful an operation is.

NorthWest MedStar, which is represented on the committee by business services manager Russell Hancock, is joining the Life Flight air ambulance network starting April 1. Life Flight has not participated with any interim committee work done in the past, but Hancock said he will continue to be a part of the working group representing Life Flight.

The next meeting of the Economic Affairs Interim Committee, which is looking at the air ambulance issue, is April 14.

Original article can be found here:

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