In rural Borrego Springs, a person or persons, suffering from an injury, onset of a critical illness or medical condition that can be fatal or trauma-related, is 75 miles from the nearest hospitals equipped to deal with such events. Where life and death are literally a matter of minutes, emergency medical air-transportation is a necessity. This is the first of two articles on the emergency flight companies – Mercy Air and REACH – that service the Borrego Springs and the 92004 zip code area, and what consumers need to know about these companies, insurance benefits, costs, and how to best protect themselves and their families from staggering financial consequences of a potentially deadly event.

On March 26, the Borrego Valley Endowment Fund, Inc. (BVEF) announced it canceled the Municipal insurance contract with REACH emergency flight services, March 31, 2021. The announcement was made in a press release from Bob Kelly, president.

“Now that Mercy Air has established an air base in Borrego Springs, and the majority of air transports are being done by Mercy, BVEF is allowing its agreement with REACH to expire effective March 31, 2021.”

The press statement explained, “BVEF’s municipal partnership agreement with Mercy Air remains in force through December 31, 2021, and covers all year-round, seasonal and temporary visitors, who reside one month or more per year in Borrego Springs, whether insured or not insured for Air Medical coverage under a medical plan. BVEF’s agreement with Mercy Air relieves eligible residents of any out-of-pocket (e.g., deductible, co-pay, etc.) expenses associated with transportation on Mercy Air’s helicopters and planes.”

The press release, like many aspects of emergency flight services, is confusing and omits financial details. First, the BVEF’s $35-membership plan with REACH also covered “out-of-pocket costs,” not the entire flight bill as some references may be mistakenly believed.

Then there’s a $700 cap on the Endowment Fund’s contribution to “out-of-pocket” expenses also not mentioned in the press release. The term “out-of-pocket” is potentially misleading and confusing to some. It does not mean BVEF will pay the entire transport bill, which could be assumed, depending on how one defines “out-of-pocket” and without explaining the $700 cap. “Out-of-pocket” in emergency, air flight lingo refers to costs of an individual’s share of a government – Medicare, Medicaid, Medi-Cal, and supplemental Medigap, or private health insurance plan.

REACH subscribers are warned that any out of pocket costs previously underwritten by the BVEF, will not be honored as of March 31, 2021. Kelly advises members to call REACH customer service, if they wish to continue with a new membership plan at new prices.

When contacted, James Smith, REACH membership sales manager for San Diego, Orange and Los Angeles Counties, noted that the actual contract with BVEF was discontinued January 1, 2021, with the 90-day grace period, ending on April 1, 2021. According to Smith, “Individuals and doctors can request REACH over Mercy. That’s if the injured or ill person is conscious.”

He added that if the Mercy helicopter is in the air or otherwise, unavailable, the 911 first responders will contact REACH. However, REACH will only honor its membership commitments if the patient is flown by REACH. If the injured party is taken by Mercy Air, the membership investment is null and void.

Having two air medical providers is a definite benefit for Borrego Springs. When one is in the air, there’s a backup carrier. Some believe competition is good, because, in theory, it drives down cost and ensures a better product. However, when it comes to being dependent on emergency air evacuations by unregulated entities, free to set their own prices, that theory doesn’t hold up.

It’s significant that 911 responders, the Borrego Springs Fire Protection District paramedics, and Sheriff’s department can make the call on which emergency air flight is used. The emergency helicopter can be called to the site of an accident, or to pick up an injured party. Or, paramedics can deliver the patient to the helicopter pad, next to the Borrego Springs Clinic. Some Air emergency flight providers cover the cost of the ground transport of the patient to the air vehicle. Some don’t.

The rule, according to Chief John Hardcastle, Borrego Springs Fire Protection District, is that 911 responders must select the closest, available emergency air carrier in a health crisis.

Since Mercy Air has a base in Borrego, it’s in the catbird’s seat, and has significantly reduced the number of REACH flights. In most cases, patients have little or nothing to say about which carrier takes them to the hospital. The emergency air carrier is required to take a patient to the nearest, Tier 1 or Tier 2 hospital. In other words, a hospital that has the medical staff and capacity to treat high levels of trauma and specific critical conditions of the patient.

However, local paramedics have choices and discretion in picking hospitals. The Tier 1 and Tier 2 hospitals most used are Eisenhower and JFK, in Riverside County, along with some Scripps hospitals, Palomar, Mercy, Sharp, and UCSD Health Systems in San Diego county. This is where insurance costs and billing complications of “in” or “out-of-network” applies.” Good example, the patient is a member of Kaiser Permanente, and is taken to Palomar Hospital, definitely “out-of Kaiser’s network.” In this situation, the patient must rely on Kaiser to reimburse Palomar. Any part of the bill that Kaiser refuses to pay, along with co-pays, are passed to the patient.

Chief Hardcastle believes, “Having a locally based provider, waiting and ready in the wings, like Mercy Air, saves lives by saving time. He added that the “(fire) department has a good working relationship with both Mercy Air and REACH.”

First responders often need to rely on medical specialists to make the call whether the flight is a “medical necessity” or a “non-emergency.” Two more insurance terms that impact cost. For example, to confirm if a person is having a heart attack, versus a case of anxiety, Chief Hardcastle explained that they “rely on a heart monitor and consultation with Palomar doctors.”

A mistaken diagnosis here, not only makes a big difference in a life, but what the patient must pay. Because a heart problem may take numerous hospital, or emergency room tests to confirm, let alone treat. And because no one really wants to take the risk of making an error in judgement about something as critical as heart problems, the patient will most likely be transported. However, if it turns out the patient was suffering from anxiety or some other non-life-threatening cause, a new conundrum arises. The costs for emergency transport are high, but the cost of a case declared a “non-emergency” is even more expensive, and may be denied by some insurance plans such as Medicare and Medicaid.

William Hinton, William C. Hinton, RN, Area Manager with Air Methods – PacWest, was one of the driving forces behind the move to open a base in Borrego. “I was an air nurse at our base location in El Cajon, and I hated that it took us 25 minutes just to get to Borrego and a critical patient. I know minutes count,” he explained. Mercy Air is not affiliated with Mercy Hospital in San Diego, and is the arm of Air Methods.

REACH, on the other hand, is the local representative of AirMedCare Network, “an alliance of affiliated helicopter and airplane air ambulances that provide medical treatment and trauma care in 38 states.”

According to its website, “AirMedCare protects your family and your finances. Affiliates dramatically reduce travel time to an emergency facility for members and non-members alike. AirMedCare Network members enjoy the added value of never having to worry about out-of-pocket expenses when transported by an AirMedCare provider.”

Smith explained, “The typical REACH annual membership of $85 per individual, and $65 for seniors adds financial security by covering out-of-pocket expenses.

There’s that term again, “out of pocket expenses.” Remember it; because it is critical to understanding the billing complexities and costs of air emergency flights. What it means, in reality, is that the co-pays, deductibles, and co-sponsors an individual has agreed to pay, depend on the terms of the insurance policy. The dollar amounts due, as “out of pocket” expenses left to be paid by the patient, can be jaw dropping when it comes to emergency air transport.

The average $500 to $60,000 air emergency transport charges may be denied in part or totally by a person’s travel or health insurance company. This cost is referred to as “Surprise Billing,” or “Billing Balance.” That’s what the individual owes the flight company, after deductibles are paid, and the insurance company contributes its share to the claim.

“It depends,” was the answer from both REACH and Mercy Air, when asked about costs. Neither spokespersons would give actual overhead costs, or even a hypothetical accounting of what an uninsured patient might be billed for a trip from Borrego Springs to Eisenhower Hospital, in Rancho Mirage. So why are the companies so unwilling to discuss costs in advance?

They defend the inability to project costs based on the variety of factors contributing to the total cost of an individual’s flight. These include, how far the plane must travel; the patient’s condition and special in-flight medical needs; medical personnel involved; and a percentage of the overhead for the cost of the helicopter, or plane, which include cost of fuel and maintenance. The charges also reflect the number of experienced medical personnel, usually a nurse practitioner, EMT, pilot, and mechanics housed on standby at a local base.

Smith claims REACH requires more emergency room experience of its employees than Mercy Air, and that the $6 million helicopter is more expensive, but safer, and better equipped than the Mercy Air copter. He also contends that the Mercy helicopter does not fly 24/7/365, as it claims. “REACH is the only helicopter capable of flying at night and in windy weather.”

“Not true,” Mercy Air’s Hinton counter claims.

Doug Flanders, vice president of communications for Air Methods/Mercy Air, has said in news articles that the “average cost of maintaining a local base, with ready response is about $3 million a year.” Industry articles place the cost nearer to $6 million.

REACH uses advertising and direct marketing to sell services and memberships. Currently, advertisements are running on the internet, featuring a gift through Amazon for a $50 healthy travel insurance membership. The AirMedCare website urges consumers to, “Take control of your care and travel without worry. It’s important to know that your insurance may not cover the total cost of emergency treatment and transport. Even with the most comprehensive coverage, typical out-of-pocket costs like co-pays and deductibles will still apply. These charges could end up being substantial. Members have added peace of mind, knowing their flight expenses are completely covered when flown by an AirMedCare Network provider like REACH.”

In contrast, Mercy Air’s parent company, Air Methods, takes marketing competition to a new level, focusing on placing bases in rural towns and communities where emergency air is the only route to critical hospital services.

Air Methods/Mercy promotes itself as, “A full-service air medical transport system that has served California and Nevada for over 30 years, providing safe, rapid transport by helicopter of critically ill and injured patients, and our aircraft are available 24/7-365, with overlapping service areas of coverage that help ensure a helicopter is readily available for your needs. Whether it be the transfer of an ICU patient from one hospital to another or the complicated trauma request from an EMS provider, our competent crews continue to provide critical and lifesaving interventions surrounded by exceptional compassionate patient care.”

“Establishing this base in Borrego Springs furthers our mission to provide critical care in the air for anyone who needs it,” the local brochure added. Establishing a base in Borrego, is also a good way to close out the competition by using the rules of accessibility. It’s also how Air Methods (www.airmethods.com) has grown to be: “the leading air medical service, delivering lifesaving care to more than 70,000 people every year. Methods’ fleet of owned, leased or maintained aircraft features more than 450 helicopters and fixed wing aircraft.”

Taking a shot at REACH’s membership programs, Hinton urges consumers to avoid or cancel memberships, as money making scams. “Memberships aren’t honest. They pass the costs that insurance companies pay, or should pay to the consumer. “

Mercy Air’s parent company doesn’t mince words. The message from Air Method’s website is: “Don’t fall victim to membership deception and money-making fraudsters – say “NO” to air medical memberships. Protect yourself and your financial well-being.”

Rather, Mercy asks consumers to rely on the company’s “Patient Advocacy and going in-network with insurance companies to cover costs to reduce out-of-pocket expenses to an average of $200, which includes co-pays and deductibles. In most cases, Air Methods is in-network, where your costs are already covered. Medicare (Part B) and Medicaid beneficiaries do not need them, since air medical is a covered benefit. No additional membership or insurance should be needed to cover emergency medical transport costs. “

Hinton noted that he is aware of Medicare charging patients. However, he pointed out that he, “has never seen a bill balance from Medicare for more than $500 to $1,500 charged to a patient.”

What Mercy doesn’t talk about are the lawsuits against Air Methods for overcharging patients in rural communities, and a $78 million settlement with employees, over charges the company refused to pay overtime compensation. They, also, fail to mention that the emergency air evacuation companies complain about Medicare’s limited participation and caps on fees. Since in many communities, the majority of air flight patients are in the seniors age bracket, the flight companies maintain, they must seek other ways to make up for Medicare losses.

Flanders, for example, has lobbied against Medicare’s coverage and terms, saying, the government insurance for seniors, doesn’t pay enough to realistically cover the costs of emergency air evacuations. “The result,” he contended, “is that the air flight operator must pass these unrecovered costs onto other consumers with private insurance.

“Seven out of 10 of our transports are Medicare, Medicaid or uninsured,” Flanders reported in a new article, “Medicare pays Air Methods/Mercy Air an average of $5,998 per transport, and Medicaid payments are typically half of that. That presents a “’huge financial challenge.”

More on the parent companies of Mercy Air and REACH – Air Methods and AirMedCare Network – in the next issue. The Sun will also look deeper into the weeds and loopholes of air emergency flight charges and insurance, as well as the costs and unanticipated consequences that occur as a result of a potentially fatal accident or illness.

Confused? Don’t despair. There’s some good news coming as a result of California’s attempt to regulate costs and the emergency flight industry in the state, as well as a comprehensive and expensive membership that claims to cover just about everything, including situations no one thinks about, and the extraordinary financial consequences that may arise when a critically injured or ill patient has to be airlifted.