Living in Elko, Gerald Ackerman has become all too familiar with air ambulances.

Several years ago, one of his daughters was riding a scooter when she shot off the sidewalk and into a church parking lot where she was run over by a car. The elementary-school-aged girl was rushed to the local hospital by ground ambulance, and the emergency room staff told Ackerman to expect the worst when they loaded his daughter onto a plane to transfer her to a hospital with a higher level of care. In Salt Lake City, she was placed on a ventilator and kept unconscious for a few days while the swelling in her brain subsided. 

Even when it appeared she would pull through, the doctors gave Ackerman a three-inch binder filled with pages upon pages of all of all the problems his daughter could face throughout her life, including permanent brain damage and neurological impairment. Eventually, the doctors took the binder back. To this day, a scar on her chest is the only lingering reminder of the accident.

Then there was Ackerman’s youngest daughter, who was born six weeks prematurely with an umbilical cord wrapped around her neck and fibers in her lungs. The University of Utah’s prenatal team flew out to Elko and spent a couple of hours stabilizing her at the hospital before flying her to Salt Lake, where she stayed for two weeks.

A third daughter was flown out to the University of Utah for inpatient mental health treatment. Ackerman said she was able to get on medication and is doing “fantastic” today.

“I look at all three of those girls now — I have five daughters and two sons — what would I have done with my life not having the rest of the experiences I got to have with my kids?” Ackerman said. “That wouldn’t have even been a possibility if those flight services hadn’t been here.”

But that life-saving treatment comes at a cost. According to a report from the U.S. Government Accountability Office, the median air ambulance bill in 2017 was about $36,400 for a helicopter transport and about $40,600 for an airplane transport. That’s about three-fifths of what median household income was the same year.

One industry report from 2017 pegged the median cost of transport of Medicare patients at $10,199, but studies on what it actually costs to provide those services are few and far between. Air ambulance companies argue that paying staff around-the-clock to be prepared to hop on a helicopter or a plane at a moment’s notice doesn’t come cheap and that they’re being paid pennies on the dollar to provide those services by Medicare, forcing them to charge privately insured patients more. But insurance companies point to both the proliferation and then consolidation of air ambulance companies in recent years — particularly those that are private-equity backed — and profits they’re turning as proof they can’t be struggling that much.

Stuck in the middle are the patients, many of whom are slapped with tens of thousands of dollars in so-called balance bills after an air ambulance ride because their insurance company does not have a contract with the company that transported them and sends them a bill for the balance. The GAO report found that two-thirds of air ambulance transports for privately-insured patients in 2017 were out of their insurance company’s network.

Congress, as part of a larger discussion on surprise emergency room bills, is poised to potentially take action that would bar air ambulance providers from balance billing. One proposal, which passed out of the Senate Health, Education, Labor and Pensions Committee earlier this summer, would require providers that don’t have a contract with insurance companies to accept the median in-network rate — meaning the typical rate paid for the procedure by other providers in the area — as payment in full for the transport. 

Air ambulance companies and other behemoths in the health care provider world, including doctors and hospitals, have long resisted so-called benchmarking proposals, which they couch as price-fixing. Should the legislation move forward, air ambulance providers have threatened to pull out of rural markets across the country.

“It’s going to affect the rates,” said Anna Blair, vice president of service delivery for REACH, which is owned by the private equity-backed Air Medical Group Holdings and operates under several different brand names out of Reno, Elko and Ely. “It’s going to result in us having to make decisions on which bases from a financial standpoint we’re going to be able to keep open or not.”

Insurers argue that might not be a bad thing and would stabilize an oversaturated market they say can’t sustain many air ambulance providers.

“It’s the problem that 20th-century railroads ran into — too high fixed operational costs servicing too few consumers,” said Sean Dugan, vice president of federal affairs for America’s Health Insurance Plans.

But that’s a hard pill to swallow for rural and frontier Nevadans dependent on those life-saving services. This summer, an ore-hauling truck collided with a bus carrying workers to mines on the Carlin Trend leaving two dead and injuring 20, six of whom were sent to Reno and Salt Lake City with another 14 cared for at Northeastern Nevada Regional Hospital in Elko. 

The two air ambulance providers with bases in Elko — REACH and MedX AirOne — responded to the incident, as did emergency responders from Eureka and Elko counties, the Carlin fire and police departments, Nevada Highway Patrol and Nevada Gold Mines Rescue, according to the Elko Daily Free Press.

“Thank heavens for air transport just to get them to the hospital here in a quick fashion. They were using every ambulance and every mode of transportation to get them out,” said Ackerman, who is the director of the Office of Rural Health at UNR’s School of Medicine. “People don’t self-select to only have really bad trauma in an urban area.”

Air ambulances for all

Of all of Nevada’s frontier towns, Elko is perhaps the best situated for emergencies. It has a major hospital, Northeastern Nevada Regional Hospital, and two air ambulance companies based there with five air ambulances between them ready to respond to an emergency at a moment’s notice. (REACH has a plane and a helicopter, while MedX AirOne has two planes and a helicopter.) 

Residents of Elko County have also been made a promise that few others in the state have: They won’t receive any balance bills from either company for the emergency medical air transport they receive.

That promise began with MedX, a small, husband-and-wife owned air ambulance company that opened its first base in Winnemucca in September 2015. Company owner Joel Hochhalter, a former flight nurse who has worked in the industry for more than 20 years, said the idea was to create an air ambulance company with a business model that wouldn’t slam patients with tens of thousands of dollars in medical bills.

“It was our own internal idea of how we could operate an air medical program without causing so much financial distress on patients and communities?” Hochhalter said. “It’s truly a black eye on the industry that we have to be in this position.”

Membership programs are common in the air ambulance industry. For somewhere between $50 and $100 per household a year, residents who live in rural areas can typically purchase a membership from an air ambulance company that absolves them of any out-of-pocket costs for emergency transports.

The issue is that if more than one company operates in the area in which the person lives, there is no guarantee that the company with whom he or she has a membership will be the one to respond to the call for help. As a result, some households resort to buying up multiple memberships they may never use. Some policies, Hochhalter said, also have fine print saying they only cover medically necessary transports, meaning that patients could still end up in a fight over their bills.

“They utilize a little bit of a scare tactic to get people to buy these membership programs. ‘There’s no hospital here, you’re going to end up with this seventy-, eighty-, ninety-thousand dollar bill unless you buy this membership,” Hochhalter said. “They kind of prey on folks.”

MedX took a different approach. The nonprofit Northern Nevada EMS Consortium, which fundraises to support ambulance crews, firefighters and rural health systems across the region, agreed to donate memberships to residents in Elko and five other northeastern Nevada counties. That means that MedX will never balance bill patients who live in those six counties for any air ambulance services they might receive.

The company also took the unusual step of entering into contracts with several major health insurance providers in the region — Anthem, Aetna, Cigna and Hometown Health — meaning that patients who have one of those insurers are considered in network and won’t face balance bills, even if they don’t reside in one of those six counties. 

For the rest of the patients who aren’t insured by one of those companies, don’t live in one of those six counties, but may still need air ambulance services while traveling through northeastern Nevada, Hochhalter said the company’s policy is to offer the patient’s insurance company the same rate it does to the insurers that they’re in network with, and that they have a commitment to work with patients on the bill and not to garnish wages or take them to collections.

“If we have to write it all off, then we write it all off. The last thing we’re going to do is to send somebody to collections to ruin their credit,” he said. “I’ve just heard so many horror stories of people having to file bankruptcy over an air medical bill.”

But MedX’s membership program caused “a lot of confusion in the marketplace,” said Blair, the vice president with REACH, and led patients to believe that they were covered for all air transports by all companies. 

So REACH started looking into how it could offer similar countywide memberships, possibly funded by the county itself through money on a water bill or a tax initiative, as some communities have. Eventually, Blair said, a second nonprofit — called the Nevada Emergency Services Preparation and Access Fund, or NESPA — stepped in and began offering memberships to residents in two counties, Elko and White Pine, in February. (It’s worth noting that REACH operates under several brands, including CalStar, American MedFlight and Guardian Flight, in Nevada.)

However, it’s not entirely clear how NESPA is funded, or whether it has any other activities beyond the membership program. Unlike the Northern Nevada EMS Consortium — whose officers include the chief nursing officer at Northeastern Nevada Regional Hospital, an official with Lander County emergency medical services and an attorney from Winnemucca — two of three of NESPA’s officers are affiliated with REACH and the third works for an air transport company, according to the secretary of state’s website. 

Blair, asked about the affiliation between REACH and NESPA, acknowledged in an email that some of NESPA’s board members are affiliated with REACH and its parent company but did not respond to a question about whether REACH has a financial relationship with NESPA.

Some in the community attribute REACH’s decision to offer the countywide memberships to plain old competition.

“There’s still a fair amount of competition between the two companies. I don’t know that that’s ever going to go away. MedX brought the idea into the county and … REACH as well has very recently taken that on,” said Alice Allen, chief nursing officer of Northeastern Nevada Regional Hospital and president of the Northern Nevada EMS Consortium. “It’s a great opportunity for our patients because, as you know, the billing on those is very significant. This has been great for Elko.”

REACH has also been working to increase its number of in-network transports nationally — from 3 percent to 30 percent this year — but is only in-network for about 10 percent of commercial transports in Nevada, Blair said. (She added that the company also has a “compassionate billing policy” that allows it to write off or write down a “reasonable” amount of an out-of-network bill for a patient.)

The company also continues to offer individual paid memberships for residents not in Elko or White Pine counties through the AirMedCare Network at $85 a household, with 3.2 million covered individuals and 85,000 in Nevada. If a typical household is made up of four people, that means the company would be making $1.8 million in Nevada annually on memberships. That money, from REACH’s perspective, is necessary to keep its operations going when it can’t get in network with insurance companies.

“It takes the pain out of it for the patient so there isn’t a balanced bill,” Blair said. “It has been our saving grace for the last 10 years.”

The countywide membership model is, however, restricted to northeastern Nevada in the Silver State. The nonprofit REMSA, which serves western Nevada out of bases in Gardnerville, Fallon and two California outposts in Truckee and Beckwourth, offers traditional household memberships but has steered clear of any other sort of membership model over concerns that it could run afoul of Medicare rules.

“The communities love it because they don’t have to pay anything out of pocket, but when you look at it under a microscope, it’s an operator trying to sweep the market,” said Ron Walter, executive director of CareFlight, REMSA’s air ambulance service.

But Hochhalter said that MedX’s program is designed to be compliant with Medicare rules and is routinely audited by an outside compliance company.

“The program is not set up to make two or three hundred million dollars annually in revenue,” Hochhalter said “It’s simply meant to protect the patient and put the patient at the center of what we’re doing, which is what we’re supposed to be doing instead of seeing how many millions of dollars in memberships we can make.”

A dire situation in Tonopah

If Elko is one of the best places in frontier Nevada to have a medical emergency, Tonopah is one of the worst. The only hospital in the tiny town of 2,400 closed its doors four years ago, leaving the nearest emergency medical care an hour and a half drive away in Hawthorne or two hours away across the California border in Bishop. 

Lorinda Wichman, who represents Tonopah on the Nye County Commission, said that responding to community complaints about the hospital closure used to take up most of her day, seven days a week, over the past few years.

The hospital closure had created a dire problem for Tonopah: The town’s all-volunteer ground ambulance service was overwhelmed with four- and five-hour round trip emergency transports to Hawthorne or Bishop and was on the verge of collapse. On top of that, Wichman noted that in many cases those seeking emergency care were uninsured or underinsured, leaving other communities to foot the bill for Nye residents and, when patients were released, they often had no ride back to Tonopah.

The situation has slightly improved since then. Reno’s Renown Medical Group opened a telemedicine clinic with primary and specialty care services in 2016 and just last year added urgent care and occupational health services, while REMSA runs a community paramedicine program, a relatively new health care model where paramedics assist with public health and primary care delivery in underserved areas.

The community paramedicine program, which is paid for by the Northern Nye County Hospital District, now allows paramedics to respond with the local volunteer emergency ambulance service to assess the severity of each case and determine whether the patient needs to be transported immediately or if he or she can wait to go to the Tonopah clinic in the morning. The paramedic is also responsible for coordinating with air ambulance providers to get them off the ground and on their way to Tonopah for the most serious of cases.

“From everything I’ve seen, thank God they’re there,” Wichman said.

Russell Pillers, a health care consultant hired by the hospital district and a Tonopah native, said that the community paramedicine program makes “perfect sense” for an underserved community like Tonopah. But the hospital district is continuing to look at ways to offer a higher level of emergency care in town, including an urgent care-plus type facility that would offer a level of care somewhere between an urgent care and emergency room.

“A lot of people are like, ‘Open the hospital again and everything is going to be fine,’” Pillers said. “But because of all the financial constraints of course it has to be a crawl, walk, run mentality.”

The question of the cost of air ambulance services isn’t top of mind for those in Tonopah, whose most immediate concern is just making sure the services exist at all. Wichman said that some in town have purchased air ambulance memberships and that she received a call once from someone asking her to bring a countywide air ambulance membership program before the county commission, which she declined to do because she doesn’t want to favor one business over another.

But she noted that in any emergency situation it’s hard to think about the cost when you’re so focused on access to care.

“When you’re in that situation, you’re not thinking about the cost,” Wichman said. “You’re thinking about, ‘I want to live.’”

The cost of life

The fundamental question in the debate over the cost of air ambulance services is this: What would you pay for someone to save your life?

Put another way: What wouldn’t you pay?

Air ambulance services are inherently expensive to provide. Having a team and a plane or helicopter ready to respond to an emergency incident at a moment’s notice is expensive. But no one knows exactly how expensive it actually is, whether $10,000, $80,000 or $120,000.

“The air ambulance bills I’ve seen from patients who have brought them in complaining, the cheapest was $65,000, most expensive was $120,000, mostly in the $80,000 range,” said Matt Walker, CEO of William Bee Ririe Hospital in Ely. “And then, of course, the patients unfortunately don’t have a whole lot of choice in the matter.”

All Walker knows is since MedX and REACH both committed to no balance billing through their membership programs, he stopped getting complaints.

“It’s been a huge benefit to the patients here in White Pine County,” Walker said. “It also tells me that balanced billing probably doesn’t need to be done. It sounds to me like they’re making it work, and they still must be making a profit or they wouldn’t be doing it.”

The question now is whether stopping balance billing for all air ambulance services is feasible nationwide. Both insurance companies and air ambulance providers alike say they want to take the patient out of the middle, the common refrain in the surprise billing debate. But they don’t agree on how that should be done.

Air ambulance providers say that because they only provide one service, it is more difficult for them to negotiate with an insurance company compared to, say, a hospital, which provides an array of services and can bargain up and down each individual service. Insurance companies say that the private equity-backed consolidation of the air ambulance industry in recent years — such as with REACH and its affiliated brands under Air Medical Holdings Group and its parent company Global Medical Response — has reduced competition in the market and thereby the leverage they had to negotiate better contracts.

Part of the issue, too, is that the air ambulance industry justifies the higher prices it charges privately insured individuals on the low reimbursement rates it receives from Medicare. But insurance companies argue that the cost of providing those services isn’t much more than Medicare pays for them.

Air ambulance providers, on the whole, have balked at the Senate bill that would require them to accept the median in-network rate as payment in full for their services from insurance companies, saying it will further discourage insurance companies from allowing them into their networks.

“What’s going to end up happening is there are going to be unintended consequences,” Blair said. “We’ve made headway of going in network finally, and [the bill] de-incentives the insurance providers to keep working with us.”

Even REMSA, which is a 501(c)3 nonprofit and isn’t private equity backed, is worried about what will happen if the Senate HELP bill passes. Walter said that the company has seen insurance companies “arbitrarily” cut reimbursement rates from around 85 or 90 percent of billed charges to only around 50 percent in recent years, and where the company used to be able to directly appeal to an insurance company on a particular claim, patients are now being required to make those appeals.

Walter acknowledges that there are some “unscrupulous players” in the industry — “yes, the large companies, the three major air medical providers in the country, but there are also some small private companies that are putting out really unrealistic bills,” he said — but argues that insurance companies are also trying to turn a profit for their shareholders, in part, by lowballing air ambulance bills.

“I’ve sat at some meetings — drove eight hours to go to the meeting — and was basically shoved a piece of paper across the table that said, ‘This is what we pay,’” Walter said. “Air medical providers as well as insurers need to migrate toward the center. I think insurers need to understand that there are some costs associated that they don’t want to talk about, the cost of readiness, and then the providers need to realize that they need to come down on the costs.”

Some air ambulance companies are calling for a pause on the surprise billing conversation until a Department of Transportation advisory panel on air ambulance surprise billing — authorized by the 2018 bill reauthorizing the Federal Aviation Administration — has a chance to run its course. Members were appointed to the panel last month and will have 180 days to deliver a report to the DOT secretary and the Department of Health and Human Services on their recommendations.

They’re also asking for Medicare collect data on the cost of providing ambulance services — primarily from the standpoint of boosting Medicare reimbursement rates for the services, though that data could also be used to better understand the costs on private insurance side of the market. Such a requirement was put in place in 2018 for ground ambulances but not air ambulances.

Insurance companies, meanwhile, would like to see Congress open up the 1978 Airline Deregulation Act and carve out air ambulances from the federal preemption clause, which would allow states to regulate them.

“The states have plenty of regulatory capabilities to protect consumers and ensure access to this vital service and that the federal government doesn’t need to step in here,” Dugan said.

There’s also another approach to surprise billing being considered in Congress right now that would require out-of-network disputes to go to a baseball-style arbitration, an approach Nevada took when it passed a surprise billing law earlier this year. (That law, however, doesn’t apply to the federally regulated air ambulance companies.)

No further action has been taken on the Senate Health bill since it was voted out of committee in June. But air ambulance providers have threatened that they may need to scale back their operations should it become law.

For Nevada’s frontier communities, that’s a frightening prospect.

In West Wendover, local ground ambulances race out I-80 daily to the salt flats to meet inbound helicopters from Salt Lake City. They don’t have time to wait for the helicopter to make the 120-mile journey to the frontier border town. They just go.

“If they get to the hospital 30 minutes quicker, that can be the difference,” Mayor Daniel Corona said.

In medicine, it’s called the golden hour, the first hour after trauma during which medical intervention is most likely to prevent death.

When ground and air ambulances meet, the helicopter finds a safe place to touch down and receive the patient. Then, they’re back up and whirring toward Salt Lake, racing against the clock.