It's no secret that the federal and state governments short-change helicopter EMS providers when it comes to reimbursement for air medical flights covered by Medicare and Medicaid. Patients covered by these programs account for nearly 60 percent of all medical transport flights, so we're not talking pocket change here.
For years the industry has made up the difference on the backs of those who carry private insurance, either purchased individually or through our employers. They account for 30 percent of all industry flights. The hapless uninsured represent the rest of the market.
However, now private insurers are even becoming recalcitrant — creating more paperwork for HEMS providers, and paying them slower or incompletely. Insurers now cover the costs of flights for their policyholders only 80 percent of the time.
The anticipated flood of more patients into private insurance coverage under the Affordable Care Act hasn't happened. What has happened is that more people now qualify for Medicaid and have been enrolled in it.
This has exacerbated the industry's under-reimbursement problem and forced it into annual price increases just to stay even — forget about improving margins. Those have come from the rapid decline in the price of oil and lower maintenance costs from newer helicopters.
But oil prices are unpredictable, and helicopter fleets will age. Eventually, this skewed and underfunded payer mix will cease to be sustainable.
Medicare and Medicaid under-reimbursement is all part of Congress' addiction to enacting mandates and then declining to fully fund them, or funding them on the backs of others. It reminds me of the line in the movie "Charlie Wilson's War" when the Congressman is asked, "Why is Congress saying one thing and doing nothing?" He retorts, "Well, it's tradition, mostly."
However, some enlightened souls on Capitol Hill — Reps. Pete Sessions (R-Texas) and Gregory Meeks (D-N.Y.), along with Todd Young (R-Ind.) and Bill Johnson (R-Ohio) — have taken note of the HEMS reimbursement gap. In February, they introduced legislation, House Resolution 822 (you can read it here at Congress.gov), that would immediately boost the Medicare reimbursement rate by 20 percent next year and automatically by 5 percent over the three following years.
It would also provide HEMS providers with a means of regularly reporting uniform cost data for the purpose of receiving reimbursement that at least covers their costs going forward. This is how it would work: The Government Accountability Office (GAO) would analyze the HEMS cost data and use it to provide annual guidance for future rate adjustments from Medicare.
The bill is a noble and necessary effort, but it likely will languish in committee and die. You see, Democrats and Republicans can't agree on much these days — save that they both enjoy spending other people's money and playing Robin Hood.
Increasing appropriations to properly fund Medicare adds to the federal deficit or depletes resources from other programs. It's so much easier to steal from the privately insured and the HEMS industry. It's tradition, mostly.