Medical Helicopter Lawsuits on the Rise

Medical debt weighs on many Americans, but few incidents pack a larger or more-unexpected hit than a medical-helicopter flight.

Across the country, patients have been left more financially vulnerable by changes in the air-ambulance industry. In many cases, private insurance companies are scaling back their reimbursement for coverage.

The nation’s largest air-ambulance operator, Air Methods, which had more than $1 billion in revenue last year, has often resorted to hard-edged legal tactics to get paid, The New York Times found in a review of dozens of lawsuits across the country.

“They hounded us for a long time,” said Marc A. Dotson of Butlerville, in southwestern Ohio, who filed for bankruptcy in 2013 to avoid a demand by Air Methods for $22,150 after his wife, Patricia, fell from a horse.

As part of its efforts to collect, Air Methods placed a lien on the Dotsons’ home, records show.

By filing for bankruptcy, the Dotsons expunged the Air Methods debt, but their credit took a hit.

The Dispatch found that Columbus-based MedFlight has sued at least 34 patients or their families in Ohio since 2012 over medical debt. The number of cases filed by the nonprofit organization against patients has grown, from at least seven in 2013 to at least 15 last year, and this year is on pace to top last year’s total.

In some cases, MedFlight has sued for sums that exceed $20,000.

MedFlight officials said patients’ bad debt grew from $4.4 million to $6.4 million in its most-recent fiscal year. It lost money that year despite generating $39.4 million in revenue.

MedFlight, which provides both ground and air transport, is willing to work with patients for whom the bills would create financial hardship, said President and CEO Tom Allenstein.

But it’s common for insurance companies with whom MedFlight doesn’t have contracts to send payment directly to the patients.

“To the degree we’re experiencing more situations where the insurance companies make payments to the patients, we have to react if we’re not getting the payment back from the patient,” said John Lindaman, MedFlight’s chief financial officer.


MedFlight, which is jointly owned by hospital systems OhioHealth and Ohio State University, is relying on such tactics in a rapidly changing health-care landscape in which reimbursements often are far less generous than they once were. Air Methods also said its charges have been raised, in part, to offset such a decline in insurance payments. The company said less than 1 percent of patients who are transported end up in court.

An estimated 400,000 U.S. residents are transported by helicopter for emergency medical treatment each year, according to the Association of Air Medical Services. Many of those patients live at least an hour’s drive from highly skilled trauma centers that are equipped to handle complicated emergencies.

About two-thirds of those people are uninsured, underinsured or enrolled in Medicaid or Medicare, both of which reimburse air-transport companies at a rate that falls short of the cost of medical services, according to Rick Sherlock, the association’s president and chief executive officer.

The remaining one-third of patients are mostly covered by commercial insurance companies, which traditionally have paid far more than Medicare but are slashing their rates in many cases.

“The current payment structure that supports the industry is not sustainable,” Sherlock said.

MedFlight said it received, on average, $1,900 per air transport from Medicaid last year, and $5,900 from Medicare. It declined to say how much it receives on average from commercial insurers, saying that would put it at a disadvantage in negotiating with them individually.

The association is lobbying Congress for both temporary and long-term increases in Medicare rates for services. Without such increases, Sherlock said, smaller nonprofit helicopter programs — including MedFlight — will feel the pinch.

But MedFlight’s Allenstein said he’s not convinced that higher reimbursement from Medicare is needed. He said higher reimbursement will undoubtedly mean more competition. “We’re trying to be wise in how we do things,” he said.

Fourteen companies operate 72 medical helicopters entirely or partly in Ohio, according to the state Department of Public Safety. That’s down slightly from 16 companies and 77 helicopters four years ago, but still far more than the eight medical companies and 25 helicopters operating in the state a decade ago.

A spokeswoman for one of MedFlight’s for-profit competitors, Air Evac Lifeteam, said one of the state’s largest health-insurance companies, Anthem Blue Cross Blue Shield in Ohio, cut its reimbursement by 70 percent last year.

Another insurer, Medical Mutual of Ohio, also severely cut reimbursement, the Air Evac spokeswoman said.

A spokesman for Medical Mutual of Ohio said in a prepared statement, “In cases where we don’t have a contract with a provider, we pay the greater of the Medicare rate or the network median, which is the median rate paid to in-network providers for the same service. This complies with the Affordable Care Act and is in keeping with our goal of giving our customers the best service and the best value possible.”

And a spokeswoman for Anthem called Air Evac’s claim that the insurer cut reimbursement by 70 percent “somewhat arbitrary.”

“There is variation in what providers choose to bill; the higher the charge, the more impacted they are by reasonable limits,” she wrote in a prepared statement.

Anthem does not have a contract with Air Evac or MedFlight.

MedFlight officials said that when the air-ambulance company was under contract with another insurance carrier, that insurer deemed that 40 percent of MedFlight’s air transfers between hospitals were not medically necessary.

MedFlight’s Lindaman said physicians in hospitals and paramedics at the scene of emergencies — not MedFlight — make the call on whether a medical helicopter is needed.

“In that time-sensitive moment, the clinical provider is making a judgment to the best of their ability,” Lindaman said. “Unfortunately, we get caught in the middle because we provide the transport, we provide the services.”

Not all air-transport companies in Ohio have resorted to suing patients as MedFlight has.

Despite the cuts in reimbursement, “I can unequivocally tell you that we’ve never filed a lawsuit against anyone for lack of payment, nor have we put a lien on anyone’s house,” Air Evac spokeswoman Shelly Schneider said.

“We know they’ll pay if they can.”

The Dispatch did not find any lawsuits filed by Air Evac against patients in the Ohio court records it reviewed.

Air Evac has helicopter bases near Newark, Lancaster, Chillicothe, Georgetown, Portsmouth and Ironton.

It began turning unpaid bills over to a collection agency two years ago in cases in which patients don’t respond or cease communication with Air Evac after an insurance company sends reimbursement directly to the patients, Schneider said.

MedFlight has helicopter bases in or near Chillicothe, Marysville, Wellston, Coshocton, Galion, McConnelsville, Portsmouth and Jeffersonville.

MedFlight said its charity-care policies are consistent with those at Ohio State and OhioHealth. If those hospitals write off the care that a patient receives as charity care, MedFlight does the same, officials said.

Dispatch Library Director Julie Fulton and news Researcher Susan Stonick contributed to this story.


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