News & Updates

Air Ambulances Are Flying More Patients Than Ever, and Leaving Massive Bills Behind

Rising prices, billing disputes, and a quirk in federal law are creating a new health-care headache.

By John Tozzi

June 11, 2018 

https://www.bloomberg.com/news/features/2018-06-11/private-equity-backed-air-ambulances-leave-behind-massive-bills

When three-year-old West Cox’s fever hit 107 degrees, doctors called a helicopter 

Hours earlier, the toddler, who’d been prescribed an antibiotic for a suspected ear infection, was at home in Princeton, West Virginia, watching cartoons and eating chips and salsa. Then, during a nap, he started to have convulsions, and his mother, Tabitha Cox, a physician assistant, drove him to the emergency room, stripped to his shorts to cool.

Tabitha remembers the triage nurse’s eyes widening when she took West’s temperature at Princeton Community Hospital, the only medical center in the small town on the southern edge of the state. Nurses covered him in ice packs to try to keep his temperature down.

Patients running a fever that high can suffer permanent brain damage. Within an hour of his arrival at the emergency room, an air ambulance was on the way to take West to the CAMC Women and Children’s Hospital in Charleston. Flying would cut a 90-minute drive in half.

During four nights in the pediatric intensive-care unit, West recovered from apparent encephalitis. Three years later, his parents are still reckoning with the aftermath of his 76-mile flight: a bill for $45,930 from for-profit helicopter operator Air Methods.

At the heart of the dispute is a gap between what insurance will pay for the flight and what Air Methods says it must charge to keep flying. Michael Cox, West’s father and a track coach at Concord University, had health coverage through a plan for public employees. It paid $6,704—the amount, it says, Medicare would have paid for the trip.

Air Methods billed the family for the rest. 

The U.S. air-ambulance fleet has doubled in size in the past 15 years to nearly 90 helicopters making 300,000 flights annually, according to data compiled by Ira Blumen, a professor of emergency medicine and director of University of Chicago Aeromedical Network.

That rapid growth has made stories such as the Cox family’s more common. The air-ambulance industry says reimbursements from U.S. government health programs, including Medicare and Medicaid, don’t cover their expenses. Operators say they thus must ask others to pay more—and when health plans balk, patients get stuck with the tab.

“I was angry and I felt like we were being taken advantage of,” said Tabitha Cox. The family sued Air Methods in August 2017, seeking certification for a class-action lawsuit against the company on behalf of other patients in West Virginia who received similar bills.

Air Methods has defended its billing and disputed other allegations in the complaint in court filings. The case is pending.

“The fundamental problem is that the current reimbursement rates by Medicare, Medicaid, and some of the private insurance companies fall well short of what it actually costs to provide this lifesaving service,” Air Methods Executive Vice President JaeLynn Williams said in an interview. She declined to comment on specific patients’ cases.

Favorable treatment under federal law means air-ambulance companies, unlike their counterparts on the ground, have few restrictions on what they can charge for their services. Through a quirk of the 1978 Airline Deregulation Act, air-ambulance operators are considered air carriers—similar to Delta Air Lines or American Airlines—and states have no power to put in place their own curbs.

Prices for emergency medical flights have increased dramatically, as air-ambulance operators expanded their networks and responded to a wider set of emergencies, including traumas, strokes and heart attacks.

The median charge to Medicare for a medical helicopter flight more than doubled to almost $30,000 in 2014, from $14,000 in 2010, according to a report last year by the U.S. Government Accountability Office. Air Methods’ average charge ballooned, from $13,000 in 2007 to $49,800 in 2016, the GAO said. Medicare, the federal health program for people 65 and older, pays only a fraction of billed charges; Medicaid, the state-federal program for the poor, pays even less.

Air-ambulance operators’ special legal status has helped them thwart efforts to control their rates. West Virginia’s legislature passed a law in 2016 capping what its employee-health plan—which covered West Cox—and its worker-compensation program would pay for air ambulances.

Another company, Air Evac EMS, successfully challenged the caps in federal court. A judge ruled that the caps were pre-empted by the federal deregulation law and blocked the state from enforcing them. West Virginia has appealed the ruling.

The industry has used similar arguments to fight regulation in other states, winning cases in North Carolina, North Dakota, Texas and Wyoming. A lawsuit recently filed in New Mexico challenges the state’s prohibition on balance billing on the same grounds.

Wealthy investors lured by the industry’s rapid growth have acquired many of the biggest air-ambulance operators, leaving control of the business in the hands of private-equity groups. American Securities LLC bought Air Methods for $2.5 billion in March 2017. Rival Air Medical Group Holdings, which includes Air Evac and several other brands, has been owned by New York private-equity firm KKR & Co. LP since 2015. Two-thirds of medical helicopters operating in 2015 belonged to three for-profit providers, the GAO said in its report.

Amy Harsch, a managing director at American Securities, declined to comment. Kristi Huller, a spokeswoman for KKR, declined to comment.

Seth Myers, president of Air Evac, said that his company loses money on patients covered by Medicaid and Medicare, as well as those with no insurance. That’s about 75 percent of the people it flies.

“I fly people based on need, when a physician calls or when an ambulance calls,” he said. “We don’t know for days whether a person has the ability to pay.”

According to a 2017 report commissioned by the Association of Air Medical Services, an industry trade group, the typical cost per flight was $10,199 in 2015, and Medicare paid only 59 percent that. Air-medical operators back U.S. legislation proposed by Senator Dean Heller of Nevada and Representative Jackie Walorski of Indiana, both Republicans, that would boost reimbursements by as much as 20 percent over three years. The bill would also have Medicare collect cost data from air-ambulance companies and use it to update rates to reflect “the actual costs of providing air ambulance services.” Both versions have co-sponsors from both parties.

For people with private insurance, short flights in an air ambulance are often followed by long battles over the bill.

In 2015, Erin Roth’s father, Michael, was flown 18 miles by helicopter from Good Samaritan Hospital in Suffern, New York, to Westchester Medical Center in White Plains, after he collapsed on a work site and hit his head.

Roth, who was 55, died from his injury. After workers-compensation insurance refused to cover the flight, his Aetna Inc. medical plan paid $4,370, and Air Methods’ subsidiary, Rocky Mountain Holdings LLC, sent the family a bill for $34,495. The air-ambulance company put a lien on Roth’s estate, preventing Erin from selling her father’s house. The dispute dragged on for two years, until a TV reporter Roth contacted looked into it, and Aetna paid the rest of the claim.

“It was just kind of like a black cloud that was over my head the whole time,” she said.

Air Methods and Aetna declined to comment on Roth’s situation.

Williams, Air Methods’ executive vice president, said the company has hired “nearly 25” patient advocates since 2016 to “help them navigate the very complex process with their insurers, and we help them get the payments for these lifesaving critical emergency services that they’re entitled to.”

The industry says insurers put patients in the middle. “We need to hold the insurers’ feet to the fire to say we need a reasonable rate,” said Myers, the Air Evac executive. He said health plans often won’t agree to network contracts that could lower costs. He declined to say how large in-network discounts are, citing nondisclosure agreements.

Consumer groups and insurers counter that air-ambulance companies strategically stay out of health-plan networks to maximize revenue.

In response to a complaint filed with the state insurance commissioner by a West Virginia consumer last year, insurer Highmark Blue Cross Blue Shield wrote that it tried to negotiate a contract with Air Methods, but the company “refuses to discount its services by more than 3% of its total charge.” The consumer was appealing a $51,209 bill for his daughter’s medical flight, of which Highmark paid $10,571.

Williams, the Air Methods executive, declined to comment on what discounts the company offers insurers, but she said it is in “active negotiation” with about a dozen insurers nationally.

“Air Methods is 100 percent committed to going in-network,” she said.

Air-ambulance providers are “using consumers as leverage with the insurance companies,” said Betsy Imholz, director of special projects at Consumers Union, who helped write a report critical of the industry. Patients are “terrified” when they receive a five-figure bill for an air ambulance and press insurers to pay more, she said.

“I think there is, frankly, in many cases, price gouging going on,” Imholz said.

When air travel was deregulated, the air-ambulance business was in its infancy. A few dozen medical helicopters, mostly operated by hospitals, were in use in the early 1980s, according to data compiled by Blumen, the University of Chicago emergency-medicine professor.

Then, in 2002, a new Medicare payment formula “effectively raised the payment amounts for air ambulance service,” according to the GAO. At the same time, new treatments for strokes and heart attacks expanded the number of patients who could survive such episodes if medics got to them sooner. As rural hospitals closed, air ambulances became lifelines for remote communities.

The number of aircraft grew faster than the number of patients flown. In the 1990s, each helicopter flew about 600 patients a year, on average, according to Blumen’s data. That’s fallen to about 350 in the current decade, spreading the expense of keeping each helicopter at the ready among a smaller pool of patients.

While adding helicopters has expanded the reach of emergency care, “there are fewer and fewer patients that are having to pay higher and higher charges in order to facilitate this increase in access,” Aaron D. Todd, chief executive officer of Air Methods, said on an earnings call in May of 2015, before the company was taken private. “If you ask me personally, do we need 900 air medical helicopters to serve this country, I’d say probably not,” he said.

Despite the apparent glut, air-ambulance operators are profitable. Air Methods had an average annual profit margin of 9.1 percent from 2012 to 2016. Over the same period, companies in the S&P 500 Health Care Providers & Services index had margins of 7.9 percent, on average. PHI, a helicopter company that operates both medical flights and transports for oil and gas drillers, reported average operating margins of 15.7 percent from 2014 to 2017 in its medical segment, compared to 10.4 percent for the benchmark index in the same period.

Air Methods declined to comment on its current profitability or to share financial details as a private company.

If there are too many helicopters for the number of patients who need them, market forces should force less-efficient operators out of business, said Hank Perritt, a professor at the Chicago-Kent College of Law who has studied the industry.

Montana Senator Jon Tester, a Democrat, has introduced legislation that would roll back the special status of air-ambulance companies. A Federal Aviation Administration reauthorization bill passed by the House in April would make medical services provided by air ambulances subject to state regulation.

In West Virginia, the Cox family went through two appeals with their health plan. After they retained a lawyer, Air Methods offered to reduce their balance to $10,000 on reviewing their tax returns, bank statements, pay stubs, and a list of assets. The family decided to sue instead.

“I felt like they were screening us to see just how much money they could get out of us,” Tabitha Cox said. “I think about people that really struggle—single moms, people that don’t have the financial blessings that we have. Bottom line, it’s just not fair.

GAO calls on CMS to continue prior authorization experiments

By Virgil Dickson  | May 21, 2018

http://www.modernhealthcare.com/article/20180521/NEWS/180529994

The CMS hasn’t moved to continue prior authorization experiments even though they could save Medicare billions of dollars, according to the U.S. Government Accountability Office.

Under the experiments, the CMS only pays for some items and services after providers and medical product suppliers have shown they complied with coverage and payment rules. The CMS uses prior authorization in Medicare for non-emergency ambulance rides, hyperbaric oxygen therapy, home health services and power wheelchairs.

The CMS may have saved as much as $1.9 billion thanks to prior authorization since it started the experiments in 2012.

But most of the experiments have ended or will end soon, and the CMS hasn’t announced plans to continue the vast majority of those efforts, the GAO said in a report released Monday. The exception is power wheelchairs, which is a permanent prior authorization program.

“By not taking steps, based on results from the evaluations, to continue prior authorization, CMS risks missed opportunities for achieving its stated goals of reducing costs and realizing program savings by reducing unnecessary utilization and improper payments,” GAO said.

Providers and suppliers have struggled with prior authorization, the GAO found.

It can take months to obtain necessary documentation from referring physicians and other relevant parties before submitting a prior authorization request, and clinicians don’t have financial incentives to provide that information.

Referring physicians aren’t affected if a durable medical equipment, ambulance, or home health claim is denied due to insufficient documentation, the GAO said.

Also, smaller ambulance providers that were not defrauding Medicare but had business models centered around repetitive, non-emergency transports have closed.

CMS officials said the agency was evaluating the prior authorization programs and would take GAO’s findings and recommendations into consideration.

The agency indicated it is considering new prior authorization experiments for items such as hospital beds and oxygen concentrators because these have high utilization or improper payment rates.

HCA, private equity firm join forces to make bid for Envision

Written by Ayla Ellison

May 21, 2018

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/hca-private-equity-firm-join-forces-to-make-bid-for-envision.html

Nashville, Tenn.-based HCA Healthcare and KKR & Co., a New York City-based private equity firm, have teamed up to make an offer for Nashville-based physician services provider Envision Healthcare, sources told Reuters.

HCA wants to take over Envision’s AmSurg ambulatory surgery division, and KKR would take over the remainder of Envision’s business, sources told Reuters.

Envision, which has a market capitalization of $5.1 billion and $4.6 billion of long-term debt, has requested potential acquirers submit final offers later this month. The company announced it was exploring several strategic alternatives in 2017.

KKR isn’t the only private equity firm interested in acquiring Envision. Sources told Reuters a consortium of Washington, D.C.-based Carlyle Group and San Francisco-based TPG Global are submitting bids for the company.

BCBS of Texas: Some members may have to pay entire bill for non-emergent use of out-of-network ED

Morgan Haefner

April 25, 2018

https://www.beckershospitalreview.com/payer-issues/bcbs-of-texas-some-members-may-have-to-pay-entire-bill-for-nonemergent-use-of-out-of-network-ed.html

BlueCross BlueShield of Texas may begin requiring some members who access non-emergent care at out-of-network emergency departments to pay their bills in full.

Here are five things to know about BCBSTX’s emergency benefit management process.

1. The process will affect BCBSTX’s fully insured group and retail health maintenance organization members with out-of-network ED claims filed after June 4. Those members may be on the hook for the entire out-of-network ED bill if they use the facility for care the insurer deems not serious or life-threatening.
2. BCBSTX said some of its members are “using the emergency room for things like head lice or sprained ankles, for convenience rather than for serious or life-threatening issues. Doing so not only drives up costs for our members, but uses limited ER resources,” according to a document obtained and sharedon Twitter by Ed Gaines, chief compliance officer at the emergency medicine division of Zotec Partners.*
3. In the document, BCBSTX said after June 4, it will begin reviewing out-of-network ED claims by requesting medical records and an itemized bill for the claim. The payer will consider members’ medical record and presenting symptoms during the review to ensure the services rendered were accurately billed to eliminate inappropriate charges. While the review takes place, members’ claims will be pending, and will not be denied without physician review.
4. BCBSTX spokesperson Chris Callahan told Becker’sin an emailed statement, “We also want to make sure that what the ERs are billing us for is in line with the testing, medications and level of service our members actually received. For example, during some recent reviews, we discovered that a facility billed our member for an MRI that the medical record didn’t support.”  He added, “Our focus has been how to put the member first in reviewing these out-of-network ER claims so that we can be good stewards of their money and manage the cost of premiums.”
5. BCBSTX’s emergency benefit management process is the latest in insurers’ attempts to push members with non-emergent care needs toward cheaper urgent and primary care services. However, similar policies rolled out by Anthem have drawn considerable backlash from providers and lawmakers.

Congress Introduces Air Ambulance Quality and Accountability Act

Summary: H.R.3780 — 115th Congress (2017-2018)

Introduced in House (09/14/2017)

Air Ambulance Quality and Accountability Act

This bill amends title XVIII (Medicare) of the Social Security Act to modify standards and payment for air-ambulance services under the Medicare Program.

The Department of Health and Human Services (HHS) shall establish minimum standards that must be met by air-ambulance suppliers and providers as a condition of their participation in Medicare. These standards must address: (1) scope of practice, training, and clinical capability; (2) medical equipment and vehicle attributes; (3) documentation; (4) medical direction and oversight; (5) reporting of specified events; (6) patient safety and infection control; (7) clinical quality-management and performance-improvement programs; and (8) particular populations. An air-ambulance provider or supplier that is accredited by an HHS-approved organization shall be deemed to be in compliance with these standards.

HHS must establish an air-ambulance quality-reporting and performance program under which Medicare payment is determined according to a specified performance-based formula. Performance measures shall address patient safety, clinical quality, and over-triage.

An air-ambulance provider or supplier must, subject to suspension of payment under Medicare, annually submit specified cost data to HHS.

The Medicare Payment Advisory Commission shall report to Congress on whether changes should be made with regard to reimbursement of air-ambulance providers and suppliers under Medicare.

Uber to the ER?

Ambulances are expensive. Some cities are beginning to offer other ways to get to the hospital.

BY MATTIE QUINN

MAY 2018

http://www.governing.com/topics/public-justice-safety/gov-ambulances-expensive-uber.html

It’s more than just an inexpensive, convenient way to get to the airport or back home safely from an evening of bar-crawling. More and more, people are calling Uber, Lyft and other ride-hailing services in place of ambulances to take them to the emergency room. There’s no mystery to their motivation. People see ride-hailing as more reliable and vastly cheaper than traditional emergency transport: A ride in an ambulance can cost a user as much as $1,200, depending on what insurance covers.

So it probably shouldn’t be surprising that in March Uber announced that it was venturing into health care. Uber Health is a digital portal that allows health-care organizations to book rides for a patient or caregiver. The company says it is also working to allow people without access to a smartphone or computer to receive trip details.

It’s not the first time that ride-hailing companies have been tapped to supplement traditional health-care transportation options. Last year, the AARP Foundation and UnitedHealth Group partnered with Lyft and the University of Southern California to offer free rides to low-income Los Angeles seniors who had missed two or more medical appointments in the previous year. And the University of Pennsylvania offered Lyft rides to 800 West Philadelphia Medicaid patients for scheduled appointments.

The results for the Philadelphia project weren’t particularly encouraging: The missed appointment rate improved by barely a percentage point. Still, these projects are evidence for many in health care that the current model of health transportation and ambulatory services needs to be diversified. Ambulances, along with government-provided paratransit for the disabled, are increasingly thought of as overly expensive services plagued with bureaucratic inefficiencies and the high costs of “super-utilizers” who overuse the transportation services and emergency rooms.

“We’ve done a wonderful job of telling people that they can call 911 and have emergency services show up,” says Dean Dow, president and CEO of the Reno, Nev.-based Regional Emergency Medical Services Authority (REMSA). “Now we must educate people on when to use and when not to use it, as well as give people alternate numbers [for nonemergency situations].”

Serving Reno and Washoe County since 1986, REMSA is a nonprofit provider of emergency medical services that receives funding from both the state and federal government for a three-pronged effort aimed at taking some of the pressure off of its ambulance services. The program’s offerings include a nurse health line for people needing immediate health advice. There’s an alternate transportation program that sends people who don’t really need the ER to more appropriate services such as urgent care, a mental health facility or rehab. And a paramedicine program helps those super-utilizers with needs like nutrition and medication management.

Similar efforts are underway elsewhere. In 2014, for example, the city of Houston launched its Emergency TeleHealth and Navigation program, which connects patients with a nurse over video chat if a paramedic responding to a 911 call deems a situation a nonemergency. In its first three years, the program has reportedly prevented some 6,000 emergency transports.

There are barriers to quick, widespread adoption of these alternatives. Private insurers are reluctant to reimburse new models of care without years of data and evidence of effectiveness. Dow says REMSA struggles “on a weekly basis” to find long-term reimbursement streams, even with support from the state’s Medicaid program. But “the model has to evolve,” he says. “It’s not functionable for the future.”

CMS to launch $25 billion quality initiative

By Virgil Dickson  | May 16, 2018

http://www.modernhealthcare.com/article/20180516/NEWS/180519932

The CMS wants to consolidate several Medicare quality programs in an effort to identify the highest performing organization and have them scale their efforts under a contract that’s worth up to $25 billion.

Quality improvement networks and organizations, end-stage renal disease networks, and hospital improvement innovation networks will now fall under one large contract that focuses on educating and training stakeholders that could affect quality of care for Medicare patients. These organizations include hospitals, clinicians and long-term care facilities that work together to reduce hospitalizations, readmissions and poor care outcomes.

The effort will allow the CMS to “establish a pool of quality improvement contractors that are capable of rapid national, regional, state and local level quality improvement,” an agency spokesman said.

Among those affected by this move are Health Services Holdings, TMF Health Quality Institute and HealthInsight. Hospital improvement innovation networks now under contract include providers Atrium Health and Dignity Health and group purchasing organizations Premier and Vizient, among others.

These groups can apply to be part of what will now be known as the Network of Quality Improvement and Innovation Contractors, or NQIIC. Applications will be accepted through June 26 and will be awarded Dec. 1. The contracts will last for five years, with the option of a five-year renewal. The budget for the new quality initiative is up to $25 billion.

The CMS will provide guidance and funding and NQIIC participants will be expected to gather providers, patients and other stakeholders to address a care or quality problem. For instance, if a certain region in the country is struggling with hospital acquired infections or a spike in the number of falls, a group could be called to come up with a solution, identify best practices or rapidly test quality improvement efforts to address the problem in question.

NQIIC vendors must also seek ways to harmonize measures across care settings and eliminate those that aren’t useful.

“The proposed new structure addresses legitimate provider complaints about too many measures and too many rules on how to meet those measures, it maintains a clear focus on outcomes and on vulnerable populations,” said Michael Millenson, president of consulting firm Health Quality Advisors.

The various quality contractors used by different providers can create variances that could affect Medicare patients who require care across primary, acute and post-acute settings, said Dr. Rahul Koranne, chief medical officer at the Minnesota Hospital Association, which has been a hospital improvement innovation networks since 2016. The CMS requires the networks to work with hospitals to decrease instances of patient harm and preventable 30-day readmissions.

“If care in the hospital is the only thing that improves, and not in a nursing home or clinic, that’s not servicing a patient,” Koranne said.

The new structure will concentrate on proven approaches, said Ellen Gagnon, interim CEO of Network for Regional Healthcare Improvement, a national network health improvement collaboratives. “Clinicians, especially in rural areas, could benefit from reduced administrative burden and a more coordinated support system to navigate the emerging pay for value environment,” Gagnon said.

There is some controversy about the effort since the new effort may mean that quality improvement organizations, will no longer be able to conduct claims audits due to new duties under NQIIC, according to said Emily Evans, a health policy analyst at Hedgeye Risk Management. The CMS has been relying more on quality improvement organizations to audit hospital claims instead of recovery audit contractors.

Hospitals prefer quality improvement organizations over RACs, which are paid by the CMS to comb through providers’ medical records to ensure Medicare payments are accurate. RACs receive a cut of each overpayment they find. Quality improvement organizations tend to be run by clinicians making them better suited to judge these claims.

In a FAQ document released by the CMS, it said it won’t announce terms of quality improvement organization contracts until next year.

By Shelby Livingston

March 20, 2018

UnitedHealth Group has shot back at physician staffing firm Envision Healthcare over allegations surrounding emergency room billing, creating a website blaming Envision for patients’ costly emergency room bills.

The two companies are locked in a dispute over payment issues. Envision, which has previously landed in hot water with lawmakers and researchers over surprise out-of-network billing practices, sued UnitedHealth on March 12, claiming the insurer violated a contract by refusing to add Envision doctors to its network and lowering payment rates despite Envision’s objections.

Envision also said UnitedHealth is trying to collect more than $140 million in overpayments to the staffing firm based on the newly lowered rates.

UnitedHealth Group shot back with a website describing how Envision’s “outrageous billing practices” drive up costs for hospitals and patients. The website’s launch was first reported by Axios.

In a fact sheet about Envision, UnitedHealth said it is negotiating a new contract with the staffing firm to protect patients from high costs and surprise medical bills. The insurer claimed Envision charges an average of 975% of what Medicare pays for the same services—more than the average cost of an out-of-network ER bill at 798% of the cost of what Medicare pays, according to the Brookings Institution.

Nashville-based Envision is the nation’s largest physician staffing firm with 25,000 physicians and other medical practitioners who staff hospital departments, including the emergency room, radiology, anesthesiology and neonatology. Envision’s 2017 revenue totaled more than $7.8 billion.

Envision last year was scrutinized for sending patients big out-of-network ER bills. A July 2017 Yale University study found that hospitals that outsourced their emergency department operations to Envision unit EmCare experienced increases in the rates of out-of-network doctor’s bills, tests ordered and patients admitted to the ER. In September, Sen. Claire McCaskill (D-Mo.) wrote a letter to Envision CEO Christopher Holden requesting information on Envision’s billing practices in light of the study.

In its lawsuit against UnitedHealth, Envision puts the blame for big patient bills on the insurance company. UnitedHealth refused to add new Envision doctors to its network after Envision merged with ambulatory surgery center operator AmSurg in 2016, the lawsuit alleged.

“The impact of United’s conduct extends beyond plaintiffs to patients who are United enrollees,” the complaint said. “United’s unjustified refusal to affiliate entities timely or at all hurts patients financially, while saving United money at the patients’ expense.”

Envision also alleged that UnitedHealth lowered contracted rates in violation of a provider agreement and has pressured Envision doctors to contract with the insurer on “unreasonable terms” or stay out of network.

“We are currently negotiating a new contract with Envision to end their outrageous billing practices, which drive up costs unnecessarily for both consumers and hospitals. The lawsuit won’t distract us from the negotiation and the real conversation that is needed about their excessively high rates,” a UnitedHealth spokesman said in a statement.

The ride-sharing company is launching a service that allows doctors to hail cars for their patients.

OLGA KHAZAN March 1, 2018 

The ride-sharing company Uber is launching a new service that will allow hospitals and doctors to book rides for their patients.

The new Uber Health dashboard, which has been tested by a beta group of about 100 hospitals and doctors’ offices since July, will allow medical and administrative staff to either call an Uber to the office to drive a specific patient home, or to dispatch an Uber to the patient’s house, with the option to schedule it up to 30 days in advance.

The patient need not have the Uber app or even a working smartphone: The dashboard comes with a printable sheet allowing a doctor to circle the incoming Uber’s car color and write down the license plate.

With the dashboard, the drivers would see the patient’s name and phone number. The patient would get a text when their car arrived; if they have the regular Uber app, it would not be billed.

The new tools are compliant with HIPAA, the medical-privacy law, the company says. Uber Health’s data is “cordoned off” from the rest of Uber’s data, and only a handful of employees are given access, says Jay Holley, the head of partnerships at Uber Health.

Citing studies, the company says missed doctors’ appointments cost the health-care system $150 billion each year, and that 3.6 million Americans miss or delay appointments due to a lack of reliable transportation.

Holley is not aware of any Medicaid or insurance plan that reimbursed for Uber rides. He says many hospitals are paying for the rides out of their own budgets, finding it cheaper than the cost of missed appointments. Uber Health’s prices are similar to those of Uber in the same city, but the company did not have an average price for the Uber Health rides.

Pro Staff Physical Therapy, which has seven locations in New Jersey, began using Uber Health last summer. Many of the practice’s patients must come in two or three times per week, and many can’t drive because they’ve been injured, says Carlos Ospina, the chief clinical officer at Pro Staff. The Ubers are cheaper than cabs, he says, and Pro Staff covers the cost for patients. The only hiccup came from some of the practice’s less tech-savvy, older patients. They weren’t sure about the service at first, but they warmed to it with time and explanations from staff, he said.

Arun Sundararajan, a business professor at New York University and the author of The Sharing Economy, says it’s a good move for Uber to enter health care, which makes up one-sixth of the economy. The only pitfall, he says, might be in working out liability. How much is the driver responsible if, say, the patient faints in the back seat? “The burden on the platform and the health-care provider to ensure against something going wrong with the patient is a lot higher than if the patient is calling the car themselves,” Sundararajan says. “The fact that they are only launching this service now and not in the past is because it’s likely taken a while to work out the details.”

Many doctors call cabs for their patients, but Uber is available in about 250 U.S. cities and is sometimes cheaper than a metered taxi. Holley says that it would be up to doctors to determine if a patient was well enough to take an Uber, rather than an ambulance, and that if something happened to the patient in transit, the Uber driver should just call 911.

Partnering with hospitals might also introduce Uber to new customers. As recently as 2015, just 15 percent of Americans had used ride-hailing apps, and a third had never heard of them. The apps are mainly popular among higher-income people and college graduates, a Pew survey found. Conceivably, some of these patients, safely delivered to their homes by Uber Health, will go on to download the regular app for themselves.

The announcement comes after a string of scandals involving Uber in recent years. Just since January 2017, Uber has settled a lawsuit alleging that it misled drivers about earnings, and it faced sexual-harassment claims. It’s also been reported that the company spied on drivers, city agencies, and certain users. In November, it admitted to paying hackers $100,000 to cover up a data breach that affected 57 million accounts, disclosing names, emails, and phone numbers. (“None of this should have happened, and I will not make excuses for it,” said Uber CEO Dara Khosrowshahi in a statement regarding the breach and cover-up. “While I can’t erase the past, I can commit on behalf of every Uber employee that we will learn from our mistakes.”)

“Uber has developed a reputation for pushing the limits of the law in its pursuit of dominating the ride-hailing market,” is how The Wall Street Journal described the company last fall. In 2015, a survey found that Lyft had become a more trusted ride-hailing app than Uber.

It remains to be seen if allying with the more pure-seeming health world will repair Uber’s reputation—or how much its brand is even suffering. After all, according to a spokeswoman, the company still has 75 million riders and 3 million drivers globally.

“We have a short memory as consumers,” the Georgetown University business professor Marlene Towns told the AP last fall, regarding Uber. “We tend to be, if not forgiving, forgetful.”

We might be especially forgiving if we happen to be spared a hefty ambulance bill.

By Tara Bannow  | March 2, 2018

Atrium Health and UNC Health Care announced Friday the two systems are suspending merger talks, following vocal criticism from state officials, including North Carolina’s treasurer and attorney general.

Charlotte-based Atrium signed a letter of intent to create a joint venture with UNC Health Care in August. The resulting system would have had about $14 billion in combined annual operating revenue, more than 50 hospitals and more than 90,000 employees.

Atrium’s CEO, Gene Woods, and the chairman of its Board of Commissioners, Ed Brown, called off the deal in a letter to UNC Health Care’s leadership on Friday.

An Atrium spokeswoman declined to say what caused the proposed deal to fall through. It was subject to a review by North Carolina’s attorney general and potentially the Federal Trade Commission as well.

“Everything we have to say at this point is in what we sent (in the statement),” she said.

In its own press release, UNC Health Care CEO William Roper and board Chairman Dale Jenkins said the two systems agreed that the best path forward is to identify specific opportunities to collaborate, as they have previously, rather than form a joint operating company.

“We would like to express our gratitude to the leadership teams at Atrium Health, UNC Health Care and the UNC School of Medicine for the time and effort spent working on the joint operating company proposal,” they said.

Public officials in North Carolina have been openly skeptical with their concern that the deal would raise prices for patients and taxpayers, and have put significant pressure on the systems to offer evidence to the contrary.

Dale Folwell, the state’s treasurer, said he was concerned that the two systems never brought their proposed deal forward for review by North Carolina’s Council of State, of which he is a member. The prominent group also includes the state’s attorney general and insurance commissioner. Folwell said he never received evidence that the deal would not raise prices.

As treasurer, Folwell said he oversees North Carolina’s State Health Plan, a health plan that covers public employees.

“I’m the keeper of the public purse and I have to protect taxpayers of this state and participants in the state health plan, who are also taxpayers,” he said.

Folwell said he asked UNC Health Care representatives to provide the State Health Plan a $1 billion bond guaranteeing a merger with Atrium would not increase medical costs for its members and other taxpayers. They declined.

Similarly, North Carolina Attorney General Josh Stein wrote a letter last month to the CEOs of Atrium and UNC asking for additional information on how the deal would impact consumers. “We seek information to assess whether the proposed combination would increase prices for health care, reduce choices available to patients and payors, or otherwise harm North Carolina patients, North Carolina businesses, or the state itself,” he wrote.

That concern was conveyed in a recent lawsuit. A North Carolina resident and Atrium patient filed a putative class-action lawsuit in a federal district court in the state Wednesday against the health system alleging Atrium used its market dominance to impose unlawful contract restrictions that prohibit commercial health insurers from offering inpatients financial benefits to use less-expensive health care services offered by Atrium’s competitors.

Blue Cross and Blue Shield of North Carolina’s CEO also came out against the proposed merger in January, arguing it would drive up prices for patients.

Atrium, which changed its name from Carolinas HealthCare System last month, wrote in its news release that it remains committed to creating an organization that can serve more people and address North Carolina’s most pressing issues, including rural healthcare, behavioral health and affordability.

“In our letter sent to UNC Health Care today, we informed them that while we have not been able to reach an agreement, our respect for UNC Health Care, its team and UNC Health Care’s accomplishments has grown through this process,” Atrium wrote in a news release. “Their desire to work collaboratively to improve the health of every North Carolinian is something we highly value and to which we are also committed.”

Atrium’s spokeswoman declined to say whether negotiations could reopen in the future.

“I think it’s fair to say right now the discussions are not going forward,” she said.

Last month, Atrium and Macon, Ga.-based Navicent Health signed a letter of intent to join forces. The combination of not-for-profits would give Atrium a regional presence in Georgia, opportunity to expand to other areas and bolster its service lines. Navicent, which would become part of Atrium, would gain access to capital and benefit from spreading costs over a wider patient base.

Ken Marlow, chair of the healthcare department at law firm Waller Lansden Dortch & Davis, said that deal may have rankled UNC executives.

“If a partner sees that your strategy and priorities are spread out and not concentrated in a way that aligns, that would be a real sticking point,” particularly for the conflicting business models of academic and non-academic institutions, he said.

Deals like Atrium and UNC falling apart could potentially slow the furious pace of healthcare mergers, Marlow said.

“But I am not seeing that right now—it is feverish,” he said