Angel MedFlight - An Example of What's Wrong About Our US Healthcare System
Air ambulance companies, such as Angel MedFlight, transport by air those who are ill, often seriously, from one care facility to another. In many instances, those who they transport are in very serious condition, and need life support which one would receive in a hospital. In almost all instances, patients take air ambulances out of the need to receive more comprehensive care from specialists, or from hospitals which have more advanced technology, or are simply better-equipped to carry out the care that is needed. Those who employ air ambulance services are typically family members that are acting on behalf of their seriously ill or injured relative, and in all cases, it is a stressful time for both the family and the patient—flights are never for fun, but instead for keeping the patient alive by bringing them to a facility better suited to accomplish that goal. Air ambulances, like land-based ambulance services, are a critical component of the nation’s healthcare system. However…
Whereas each air ambulance company goes about contracting with their customers in a different manner, the business model of Angel MedFlight should be noted by all who are frustrated by the absurdity of healthcare costs in the US. Angel MedFlight’s business model has patients (or their family member) sign a 13-page, small-print legal document outlining the terms of their services. Angel’s marketing hook is that they will guarantee that the family’s out-of-pocket expense will not exceed a specified price (retainer), even if the insurance company should deny reimbursement for air ambulance services. Importantly, Angel MedFlight’s documents state that clients will receive back their retainer if Angel’s fees billed to the insurance carrier are paid in full.
For most families that are under the stress and duress of moving a loved-one from one hospital to another in order to save the life of their relative, they don’t pay close attention to the details of the contract—they are sleep deprived, highly emotional, and are typically going through a life-changing period in their lives. Just like a consent form for a surgery or medical procedure, families don’t focus on the details of privacy policies or waivers of liability—they just want their relative to be treated as expeditiously as possible.
Knowing this dynamic with families, Angel MedFlight has very pleasant sales representatives that are seemingly highly empathetic towards the family’s plight, and the objective at hand. With such, they gloss over the agreement’s details, and encourage families to return a signed contract ASAP, before they will book a flight.
So, what’s the problem? Well, in order for clients to have their retainer returned to them by Angel, the insurance company has to pay in full; otherwise, the client’s retainer is kept by Angel. Following are the terms of Angel MedFlight’s fees that are billed to the insurance company:
- Air Ambulance Base Rate: $15,500.00 / Base Rate
- Ground Ambulances: $3,800.00 each / Ambulance Transport (Per Leg)
- Air Ambulance Mileage Rate: $275/statute mile (over 500 Miles). $295/statute mile (500 miles or less)
With Angel’s fee schedule, a 1,250 mile flight from say Miami to Boston would result in a contract that calls for the insurance company to be billed $15,500 for the “Base Rate”, $7,600 for “Ground Ambulances” on both ends, and $275/mile for the 1,250 miles of the flight, or $343,750, for a total billed cost to the insurance company of $366,850. In a recent law suit in which Air MedFlight was involved, court documents show that the average retainer paid by Angel’s clients was $14,000, and that the average fee billed to insurance companies was $380,000.
The total fees billed to the insurance company run in excess of 10X what other air ambulance carriers charge, as Angel MedFlight attempts to collect all of the inflated billed that they can from the insurance company, and morevoer, they will keep the average $14,000 clients retainer too, unless all of the fees charged are paid in full by the insurance company. As we all know, insurance companies rarely pay in full, and they certainly will not do so when the billed cost of the service is 1,000% higher than that of market prices charged by their competitors.
How does Angel MedFlight’s business model survive, without some interjection of rationality and sanity? Answer is, it does, and with lots of marketing, as families are more focused on the healthcare of their family member than they are fighting a battle over an average of $14,000—they simply have higher priorities. However, if a family member awaits in a hospital ICU for weeks on end, they have the time to proactively bring such unorthodox business practices to the attention of many, in the hopes that an Attorney General, politician or class-action attorney takes note. If individuals or organizations become proactive, this sort of practice can be addressed and stopped.
If anyone wonders why consumer healthcare expenses have sky-rocketed, and medical insurance rates are through the roof, look no further than companies like Angel MedFlight as being cause for all that is broken within the healthcare industry.
If you know families that have used Angel MedFlight, or other air ambulance companies that resort to similar billing practices, please contact me at sb@scottbaker.net. Let’s see if we can do our part in speaking up and seeing that practices such as this are curtained, and that those responsible are held accountable for their conduct.
