Thursday, April 9, 2015

Making The Case For Tiered Reimbursement....

Recently, I spent two days in Concord North Carolina, with team members from MedCenter Air. If you are not familiar with this flight program, take it from me; it's a squared-away organization. The hospital supports a first-class program, with great equipment and highly qualified and continuously trained staff. When Clinicians leave MedCenter Air, it's to become PAs, CRNAs, NPs, or to run programs like Duke Lifeflight. The look and feel is one of excellence.

Consider this,

MedCenter Air, Boston MedFlight, LifeLion and Geisinger LifeFlight in Pennsylvania, Mayo-One and Memorial Hermann Life Flight all spend more money to be the best in HEMS, but they get the same pay for flying patients as does a company transporting people in the cheapest, least capable aircraft available.

So, the question is, why doesn't the government drive the industry toward a better future by using a payment-differential scheme for Helicopter Air Ambulance flights? They have done this for years to entice health-care providers to offer services in rural areas. After all the crashes, why doesn't someone suggest we do something differently.  Do profits trump lives? Is the government being paid off?

A good discussion of CMS payments being used to influence what healthcare is available where is at...

For reasons both moral and ethical, society continues to move towards health-care that is more safe, capable, and effective. This includes HEMS/HAA, which is a force-multiplier for the health-care industry but which is provided at differing levels of capability and safety.

If we were to take away the 900 or so helicopters that are used on to move patients from less capable rural health-care services to tertiary-care hospitals in major population centers and to respond to accident scenes,  the inadequacies of our national system would become immediately apparent. With all it's problems, HEMS props up a faltering national health care system. As it is, HEMS/HAA operates largely "under-the-radar," even in the face of NTSB reports that highlight the fact that all HEMS/HAA companies are NOT equal.

Most people don't understand the differences that mean some helicopters can only fly on nice clear days while others can fly through moderately adverse weather like rain showers and clouds. While some can transport two patients, others are restricted to one and have to sacrifice fuel-range if that single patient is heavy. Some helicopters can transport patients supported by heavy, bulky equipment like an Intra-Aortic-Balloon-Pump, while others force crew members to squeeze in next to each other and make any real patient care in-flight difficult if not impossible. Ironically, no matter how limited a programs capability, they all get to call themselves the same thing, and can request the same reimbursement. Hence, the "race to the bottom."

Indeed, under current reimbursement schemes, there is a moral hazard in that the financial incentive is for a helicopter ambulance company to operate the smallest, cheapest, least-capable equipment that will get a patient airborne, no matter what provisions for safety are left off. The airlines overwhelmingly fly with multiple engines (in case one quits) but in HEMS single-engine helicopters are the predominant choice - because turbines are both expensive and reliable. To the insurance company, a helicopter is a helicopter. In reality, there are significant differences between variants. 

Helicopter engines are extremely reliable, but on occasion, they fail. If it's night or you are over hazardous terrain when your single engine fails, you are going to get hurt - or worse. That's why having two engines is a good idea.

LAKE CITY, AR  – The Air-Evac rescue team in Lake City walked away unharmed after a hard landing late Wednesday night.
According to Air-Evac, the rescue helicopter was on final approach to their base when they suffered an engine malfunction. 
The pilot was able to set the helicopter down close to the helipad in what they called a hard landing. 
No one was injured in the landing, but the helicopter did receive minor damage.
The crew does have a spare helicopter on the scene so no services will be disrupted.
Air-Evac says the incident is being looked into, and the damaged helicopter will be sent off for repairs.

If that engine had failed over a dense forest, or over frigid water, those people would most likely be dead.

Last year, two different helicopter companies had single-engine helicopters crash on the same day after suffering loss of power from their one available engine. Because turbines DO fail, airliners have at least two engines available for safety and redundancy. We take it for granted that multiple engines are part of the picture on a big jet, but not on a helicopter, because many people don't understand how helicopters work, or what their limitations are.

The other benefit of having two motors in HEMS is that we can then legally (and rationally) fly in the clouds - with an autopilot and pilot training. There is a proposal in the works for reforms to allow single-engine helicopters to fly under instrument flight rules (IFR), or in the clouds. This would help create pilots who are better trained for inadvertent cloud encounters (inadvertent instrument meteorological conditions or IIMC), and would doubtlessly reduce the instances of pilots pushing down on the collective and descending after flying into fog or cloud or heavy rain. 

With single engine IFR, we still have the problem of one motor. If we are in the clouds and that one motor quits, we can't glide very far - maybe a half mile per thousand feet up - and we might not like the landing area underneath us. Single-engine IFR is an added capability for a program that is predominantly restricted to visual flight conditions- because it offers a legal and sensible way to recover from a hazardous situation. But for real confidence in the clouds, two motors are better than one.

Today, the passengers, who are also patients, are not able to ask questions about the aircraft they are being shoved into. There is no "truth in transport" requirement to tell patients or family members the risks and options available. But that is coming.

To move HEMS towards more safe and capable operations the time has come for tiered-reimbursement. If the government started with Medicare and Medicaid, private insurers would follow suit. If company A provides twin-engine reliability and is able to fly in the clouds, they should be able to claim more reimbursement. They offer more bang and should get more buck.

Changing reimbursements must be reasonable and thought out. There are two mechanisms for doing this, grandfathering or sun-setting.

Grandfathering would mean that anyone operating an aircraft as of a certain "start-date" would be exempt from any changes to reimbursement (decrements or deductions) that might be effective after that date, for as long as that aircraft is operated by that company. While this might reduce the resale value of a helicopter, it would allow the operator to continue under the current paradigm until the cost of putting the aircraft into service has been recouped. 

Sun-setting - as the FAA did with airline regulations decades ago - would leave things as they are initially, then would gradually incentivize the operation of more capable and safe aircraft, and could include other factors, such as highly trained and credentialed staff.

Reimbursement should favor more capable aircraft, pilots, and crews, able to offer more service in a more safe manner to the public.

One sunset scheme would be to leave things as they are for three years. Then separate transports into three tiers, This differentiation would apply to individual transports as with basic-life-support and advance-life-support ground-ambulance trips, based on equipment and staff. A tier-one trip would include a twin-engine instrument-flight-capable aircraft with full autopilot, night vision goggles, a specially trained and highly experienced pilot and medical crew, with the highest levels of available certification such as ATP for the pilot, CFRN or CFP for the medical staff, and CAMTS for the program. If all these conditions were met for a trip, tier-one reimbursement could be claimed.

Tier-three would equate to the least capable aircraft; one engine, limited to flying in visual-flight conditions (fair weather), perhaps even restricted to daylight conditions. The crew would meet the minimum requirements.

Tier-two would fall somewhere in the middle. 

After the sunset period, reimbursements would be paid in full for tier one, with a percentage reduction for tiers two and three, phasing over successive years to reflect the disparity in costs associated with the different types of  HEMS programs available today. The end goal is to have ALL services eventually work towards the tier-one level of service. Companies will follow the money. We have to create a rational path.

That is what our patients deserve. And that is how we will stop losing so many flight crews.


  1. Hi Dan. I certainly agree with you. Lawyer Lisa Tofil has been working tirelessly on a law in Washington pushing for tiered reimbursement for several years. She would appreciate your blog on the subject very much.

  2. How about getting paid as a Healthcare benefit, rather than a Transportation benefit? Then if you fly really sick patients to tertiary care centers you could bill for the high tech care. If you fly ALS patients in rural areas, you would get paid for that.
    Not sure it makes sense to pay for healthcare based on the equipment, though. If we were talking CT scanners instead of helicopters, no one would agree to pay more for the scan based on the size of the scanner.

    1. Hi there, thanks for taking the time to comment. I agree with you that we should be reimbursed as a provider of healthcare. And I also believe that we should be reimbursed as a transport provider. We offer both quality of care and speed of transport, and from what I have read, reducing "out of hospital time" is good for patients. (Although Dr. Ira Blumen has half-jokingly commented that the real risk to patients occurs as they are offloaded and wheeled into a hospital.) Here's my logic on basing reimbursement on the type and capability of the helicopter being operated: The government has a role in ensuring that health care is available. Since tertiary care is a scarce resource, we need to be able to rapidly transport patients to where the care is available. The problem with a VFR single engine helicopter is that they are rendered "ineffective" by low ceilings, visibility, and moderate rain or snow. The companies operating these aircraft tout their ability to do a job, but they refuse flights for weather a significant portion of the time. Or, worse, they accept flights when they should not and people get killed. While the IFR twin is grounded for ice or thunderstorms, they ARE able to live up to the promise significantly more often that the VFR single. Relating to your comment of CT scanners... Imagine if someone produced a scanner that was half as expensive to purchase, but only rendered low quality images that required more "guesses" as to what wass going on inside the patient. Would we tolerate the bill for that less-capable scan being equal to the bill for the scanners in use today? I think not. It's not the size of the aircraft that should differentiate the reimbursement, it's the capability that counts. I flew SE helicopters for several years in EMS, and they CAN do the job in many case, and for many patients. But there is no comparison between an Astar or 407 and an IFR EC-145. Thanks again for sharing your thoughts.


Tell us what you think. If you are involved in helicopter emergency medical services / air ambulances, this is your community. Please refrain from posting profanity, or comments that might be considered libelous or slanderous.