One of the nation's largest air ambulance operators is in talks to directly contract with large employers including Walmart, effectively skirting insurers as it remains out-of-network with some of the nation's largest carriers.
Some insurers have refused to contract with air ambulances, leaving patients in the middle and at risk of a surprise bill. It's the potential threat of surprise bills that may be causing some employers to consider a deal with an air ambulance provider.
And Air Methods, fed up with being on the outside of insurance networks, is going straight to employers.
"Aetna, Cigna and United are very reluctant to contract with us," Chris Myers, executive vice president of reimbursement for Air Methods, told Healthcare Dive.
Aetna, Cigna and UnitedHealthcare did not respond to requests for comment.
Myers said his firm has been working to set rates and a fee schedule with employers, particularly those with self-funded plans which then direct the administrative payer to honor that fee schedule.
Air Methods is also in talks with Tyson Foods, Myers said. Walmart declined to confirm or deny the talks and Tyson did not respond to requests by time of publication.
The arrangement has a potential snafu, Erin Fuse Brown, a law professor at Georgia State University who specializes in healthcare, told Healthcare Dive.
"Neither the employer nor its third-party administrator can steer its employees to the in-network air ambulance in an emergency. So even if Air Methods is in-network, it does not offer much protection to employees in the event they get picked up by a different air ambulance provider," she said.
Plus, the deals raise some questions about whether this will become a common practice for providers that continually find themselves on the outside of insurance networks.
Air ambulance operators have found themselves in the crosshairs of lawmakers as many remain out-of-network, putting patients at risk of receiving a hefty surprise medical bill. Nearly 70% of air ambulance rides were out-of-network in 2017, according to a previous government report that analyzed private insurance data.
The issue has captured many headlines, illustrating how patients are stuck in the middle between payers and providers fighting over prices. That's sparking debate at both the state and federal level. Wyoming, a red state, is considering regulating air ambulances like a utility.
While Congress is attempting to tackle solving the issue more broadly across the entire health sector not just among air ambulances. Industry players are pushing back, though, as it threatens their bottom lines.
Two physician staffing companies, which are owned by private equity firms, have funneled more than $28 million into opposing surprise billing legislation. The House Energy and Commerce Committee launched an investigation earlier this month into the private equity firms and their role in surprise bills.
Private equity has continued to gobble up greater swaths of the healthcare industry, including air ambulances.
Private equity deals in healthcare hit a record in 2018, according to a previous report from Boston-based consulting firm Bain & Company. One of the largest deals in 2018 was private equity firm KKR's nearly $10 billion buy of Envision Healthcare, a physician practice.
Air Methods was taken private by American Securities LLC in a $2.5 billion deal in 2017 and Air Evac, another large provider of air ambulance services, is owned by private equity firm KKR.
As employers continue to grapple with the cost of healthcare, they've turned to contracting directly with providers.
In many regions throughout the country, Walmart has cut deals with providers to improve cost and quality through value-based care arrangements. Walmart's arrangements go as far as requiring employees to travel to certain facilities for spine surgeries as a way to root out unnecessary and costly procedures.