Air Ambulance: Effects of Industry Changes on Services Are Unclear
Published: 2010-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Changes in the air ambulance industry's size and structure have led to differences of opinion about the implications for air ambulance use, safety, and services. Some industry stakeholders believe that greater state regulation would be good for consumers. While states can regulate the medical aspects of air ambulances, the Airline Deregulation Act (ADA) preempts states from economic regulation--i.e., regulating rates, routes, and services--of air ambulances. Other stakeholders view the industry changes as having been beneficial to consumers and see no need for a regulatory change. Asked to review the U.S. air ambulance industry, GAO examined (1) changes in the industry in the last decade and the implications of these changes on the availability of air ambulances and patient services and (2) the relationship between federal and state oversight and regulation of the industry. GAO analyzed available data about the industry; synthesized empirically based literature on the industry; visited four air ambulance providers with differing views on the industry changes; and interviewed federal and industry officials.
section_title: What GAO Found
paragraphs: From 1999 through 2008, the number of patients transported by helicopter air ambulance increased from just over 200,000 to over 270,000, or by about 35 percent, and the number of dedicated air ambulance helicopters increased from 360 to 677, or by about 88 percent. During the same period, the structure of the industry changed from a preponderance of providers affiliated with a specific hospital to a fairly even split between hospital-based and independent providers, often located outside hospitals, in suburban or rural communities. Perspectives on the implications of these changes vary. Supporters of the existing regulatory framework say that the growth in the number of helicopters provides, among other things, flexibility to perform aircraft maintenance on some helicopters while keeping others available to respond as needed. Proponents of a change in the regulatory framework maintain that the growth in helicopters has led to medically unnecessary flights. These stakeholders assert that high fixed costs create economic pressure to fly in unsafe weather and use less costly small helicopters that limit some patient services. GAO found few data that support either perspective. Court cases and advisory opinions from the Department of Transportation (DOT) have helped to clarify the relationship between federal and state oversight and regulation of the air ambulance industry, but DOT has acknowledged a continuing lack of clarity in some areas. Generally, the federal government has authority and oversight concerning the economic and safety aspects of the industry; states--which are preempted from regulating matters related to prices, routes, and services--have authority over the medical aspects. However, when both economic and medical or safety and medical issues are involved, questions about jurisdiction may arise. To resolve such questions, states have sought DOT's opinion and, in response, DOT has issued eight opinion letters since 1986. Some state officials have expressed concerns, particularly in relation to a DOT opinion letter on Hawaii laws, that the open-ended nature of the opinion could allow any medical regulation to be challenged as an economic regulation and thus be preempted under the ADA. States can continue to seek DOT's opinion on a case-by-case basis, as further questions surface. Additionally, states can also contract directly with air ambulance providers, which would allow states to control specific services as the customer.
section_title: What GAO Recommends
paragraphs: GAO is not making recommendations in this report. GAO incorporated comments on a draft this report from the appropriate federal agencies and key industry and emergency medical services stakeholders.

section_title: Letter
paragraphs: During the past decade, the air ambulance industry has grown and its  structure has changed. Air ambulances are generally helicopters or fixed- wing aircraft that are specifically outfitted to transport ill or injured  persons. Air ambulances may transport patients from accident scenes to  hospitals, or transport patients between hospitals to receive more  sophisticated medical care at specialty facilities such as trauma, burn, or  cardiac centers. Most air ambulance companies operate as commercial  entities and are subject to a mixture of federal and state regulation. The  industry is subject to Federal Aviation Administration (FAA) safety  regulations covering areas such as pilot training requirements, flight  equipment, and aircraft configuration. States can regulate the medical  aspects of air ambulances, but the Airline Deregulation Act of 1978  preempts states from economic regulation—i.e., regulating rates, routes,  and services—of air ambulances. Some industry stakeholders are  concerned with the growth in the industry and view the industry’s changes  as having a negative effect on the services provided to patients. These  stakeholders generally support changing the regulatory and oversight  framework to provide states more regulatory authority. Other groups of  stakeholders view the growth in the industry as having been beneficial to  society and generally don’t support such a change.
Given the differences of opinion about the effects of the air ambulance  industry’s growth and changes to its structure, you asked us to review the  U.S. air ambulance industry. To do this, we examined: (1) how the industry  changed in the last decade and the implications of these changes for the  availability of services, efficient use of air ambulance resources, safety,  and services provided and (2) the relationship between federal and state  oversight and regulation of the air ambulance industry. To examine these  issues, we obtained and analyzed available data that provided information  on the growth and evolution of the industry, shifts in business models, and  the types of air ambulance aircraft that are used to provide services.  Specifically, we obtained and analyzed data on the trends in air ambulance  industry growth from a research database and from the Atlas and  Database of Air Medical Services (ADAMS). We also analyzed Medicare  payment data. We reached out to the air ambulance community by  emailing more than 400 air ambulance providers, industry associations,  and state emergency medical services (EMS) officials, asking that they  provide us any data, information, published or unpublished reports,  papers, articles, or other potentially relevant sources of information of  which they would like us to be aware. We also conducted a comprehensive  literature search to identify peer-reviewed studies that reached empirically  based conclusions on air ambulance practices or outcomes. We identified  and synthesized over 250 studies related to the air ambulance industry,  dating as far back as 1975. We reviewed past GAO reports, transcripts of  congressional and National Transportation Safety Board (NTSB) hearings,  industry association position papers, and other industry documents. In  addition, we conducted interviews with representatives from the key air  ambulance associations—Association of Air Medical Services (AAMS),  Association for Critical Care Transport (ACCT), and the Air Medical  Operators Association (AMOA). We also met with the National Association  of State EMS Officials (NASEMSO). We conducted four site visits to air  ambulance providers that reflected differing geographic locations,  business models, and opinions about the implications of changes in the  industry.
To analyze the relationship between federal and state oversight and  regulatory responsibilities, we reviewed federal and state court cases and  opinions issued by the Department of Transportation’s (DOT) Office of  General Counsel. We also discussed the implications of industry trends  and federal and state authority with the key industry stakeholders  mentioned above, as well as with officials at FAA, the National Highway  Traffic Safety Administration, NTSB; as well as representatives of  NASEMSO. See appendix I for a more complete description of our scope  and methodology and appendix II for a more complete description of our  literature review and synthesis.
We conducted this review from December 2009 to September 2010, in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: Air ambulances can play an important role in transporting patients with  time critical injuries and conditions to medical facilities and providing  patients with advanced care while en route. Air ambulances transported  more than 270,000 patients in 2008, and their use is widely believed to  improve the chances of survival for trauma victims and other critical  patients. Composing more than 80 percent of air ambulance aircraft,  helicopter air ambulances transport patients from the scene of an accident  to a hospital or perform short-distance interhospital patient transfers.  Because fixed-wing aircraft only fly between airports, they are not  typically used to transport injured patients from an accident scene.  Patients are transported by ground to and from the airport. Fixed-wing air  ambulances generally perform more long-distance interhospital transports,  often moving patients from a hospital to a distant specialized facility. Just  over half of air ambulance transports are for moving patients between  hospital facilities, one-third are for transporting victims from the accident  scene to a hospital, and the remainder are for other purposes, such as  organ transports or specialty care flights such as for pediatric and  neonatal patients.
Most air ambulances carry a pilot and a two-person medical crew. The  medical crew may include a physician, nurse, paramedic, emergency  medical technician, or other medical personnel. According to AAMS, the  typical medical crew includes a critical care nurse and a paramedic. A  critical care nurse has specialized training in responding to life-threatening  health problems, such as those faced by many patients who are  transported on air ambulances. Paramedics represent the highest licensure  level of prehospital emergency care in most states, as they have enhanced  skills and can administer a range of medications and interventions. Other  caregivers and physicians may be added to a medical crew if the patient’s  condition necessitates further care.
subsections: section_title: Air Ambulance Providers Operate Under Three Basic Business Models
paragraphs: In the air ambulance industry, the business model is generally defined by  the entity that owns or contracts for the aviation and medical services that  are provided. Air ambulance providers generally use one of the following  three business models.
Hospital-based: a hospital generally controls the business by providing  medical services and staff while usually contracting out for the aviation  component, including the pilots, mechanics, and aircraft.
Independent: operations are not controlled or run by a specific medical  facility. Independent providers may directly employ, or can contract for,  the medical and flight crews to provide air ambulance services.
Government operator: a state or local government or military unit owns  and operates the air ambulances.
However, a large number of variations exist within these structures. Some  providers have adopted a “hybrid” model or have established joint  ventures with hospitals.
section_title: Air Ambulance Providers Receive Revenue from a Variety of Sources, Including Federal Medicare and Medicaid Programs
paragraphs: Air ambulance companies receive payment for transports from several  sources, including private health insurance, government programs such as  Medicare and Medicaid, and the patient. While industry revenue and  payment data are not widely available, we obtained data on the percentage  of total income that four air ambulance providers receive from each  source. (See fig. 1.) For these four companies, private insurance  companies or Medicare paid for most of the transport costs. A relatively  small percentage of the costs were paid for by the patient themselves.
From 2002 through 2006, the Centers for Medicare and Medicaid Services,  the agency within the Department of Health and Human Services that  administers Medicare and Medicaid, phased in a national fee schedule for  air ambulance providers as a part of a series of Medicare payment reforms  that Congress mandated in 1997. The national fee schedule redistributed,  on a budget-neutral bases, payments among various types of ambulance  services. Prior to 2002, Medicare reimbursement differed depending on the  air ambulance provider’s business model: hospital-based providers were  reimbursed based on reasonable costs, while independent providers were  reimbursed based on reasonable charges. This policy contributed to wide  variation in the reimbursement rate for the same service, with hospital- based providers generally receiving higher reimbursement than  independent providers for similar services. The new national fee schedule  established one payment rate for fixed-wing transports and another rate  for helicopter transports. The fee schedule also provides higher  reimbursement for transports in rural areas, but it does not differentiate  payments according to the business model followed, the size of the aircraft  used, or the level of medical or safety equipment on board.
In addition to the revenue they receive from transports, air ambulance  providers may receive or generate income for their operations from other  sources. For example, hospital-based providers may receive funding from  the hospital, and some independent air ambulance providers have  established membership programs that generate income from annual fees.  Government operators may receive funding through taxes or surcharges.  For example, Maryland’s government-operated air ambulance service  receives funding through a surcharge on state motor vehicle registrations.
section_title: The Air Ambulance Industry Has Seen Growth and Structural Change, but Perspectives Differ on Implications for Availability, Efficient Use, Safety, and Services Provided
paragraphs: From 1999 through 2008, the number of patients transported by helicopter  air ambulances increased from just over 200,000 to over 270,000, or about  35 percent, and the number of air ambulance helicopters increased from  360 to 677, or by about 88 percent. The data also show that between 2007  and 2008 there were an increasing number of helicopter air ambulances  and a decreasing number of transports. (See fig. 2.) We were unable to  determine whether the downward movement in 2008 represents a trend  because 2009 data on patients transported were not available.
The number of air ambulance helicopters varies widely by state. (See   fig. 3.) Most states have multiple helicopters based in their state. Vermont  and Rhode Island have none, but their air transport needs are served by  providers in bordering states.
Since 1999, the structure of the air ambulance industry has also changed.  In the past, most air ambulance providers were hospital-based, whereas  today, about half the providers are independent, with no support from  hospitals in terms of ownership, risk, and financial support.
According to industry stakeholders, a variety of factors contributed to the  industry’s growth and structural change. The downsizing or closing of  some community hospitals, according to stakeholders, resulted in longer  transports to get some patients to hospitals, making it more advantageous  to use air ambulances that could transport patients over longer distances  more quickly than by ground ambulances. Similarly, the establishment of  regional medical facilities, such as cardiac and stroke centers that provide  highly specialized care for critically ill patients, encouraged the use of air  ambulances, again because they could transport patients more quickly  from outlying areas. Finally, implementation of the Medicare fee schedule  provided those wishing to provide air ambulance services a degree of  predictability for Medicare reimbursement, which stakeholders noted  enabled air ambulance providers to develop more accurate financial plans.
subsections: section_title: Growth in the Number of Air Ambulances and Movement of Their Bases into Communities Have Increased Availability
paragraphs: The growth in the number of helicopters and their movement into  communities have generally made them more available to those in need.  According to some stakeholders, having multiple air ambulances in an  area increases the industry’s capacity to meet regional needs. For  example, if one helicopter is unavailable because it is undergoing  scheduled maintenance or responding to an air medical transport request,  another helicopter in the same region is more likely to be available.  Additionally, with more air ambulances available in rural communities,  rural ground ambulances may be involved less frequently in transporting  patients over long distances, and rural communities are less likely to be  left without an ambulance or EMS crew.
Providers also relocated air ambulance bases, moving them from hospitals  into surrounding communities and thereby extending their availability.  (See fig. 4.) A 2005 nationwide study of access to trauma centers in the  United States found that 84 percent of the population had access to a Level  I or II trauma center within 60 minutes. Of that population, almost 28  percent could only access those trauma centers in an hour or less because  they were located within the coverage of an air ambulance. Stakeholders  concerned with the growth in the industry, noted that the increase in the  number of helicopters has been focused in areas that already have  multiple air ambulance services while rural areas remain underserved.  They said that ensuring the availability of air ambulance services in rural  areas is problematic because covering a large, sparsely populated  geographic area affects profitability and impacts companies’ ability to  provide services in these areas.
section_title: Literature Indicates That Questions about the Medical Necessity of Some Air Ambulance Transports Have Existed for Decades
paragraphs: Stakeholders concerned with industry growth believe that uncontrolled  growth of air ambulances in a region leads to medically unnecessary use— that is, when an air ambulance is dispatched for a patient whose injury or  illness is not severe enough for the patient to need air transport. One  stakeholder group compared data on the severity of patients’ injuries and  discharge rates, developed by Arizona’s Department of Health Services,  with similar data for a Level I Trauma Center in New Hampshire, and an  air ambulance service in Boston. According to their analysis, the injuries  of patients transported in Arizona, a state with a comparatively large  number of helicopters, were less severe than those of patients transported  in the two other states that have fewer helicopters. However, the  comparison does not examine other factors involved in decisions about  how to transport patients, including transport distances, who makes the  transport decision, and what protocols guide the decision maker.  Additionally, the decision to request an air ambulance is generally made by  the attending physician at a hospital or by first responders at an accident  scene.
Concerns about medically unnecessary use of air ambulances have existed  since the early 1980s. We identified 32 studies examining triage criteria  using data collected from as early as 1975 to as recently as 2008. Fifteen  study authors conclude that further measurement indices are needed to  better identify over- and undertriage of patients transported by air  ambulance. Because triage protocols and patterns of air ambulance  utilization have changed considerably in the past 30 years, early reports  must be interpreted with caution and their relevance to current triage  protocols and air ambulance is unclear. It is also important to consider  these studies in their historical context. Numerous guidelines on  appropriate use of ambulances have been published. In 2006, the American  College of Emergency Physicians and the National Association of EMS  Physicians (NAEMSP) issued Guidelines for Air Medical Dispatch that  built upon earlier guidelines published by NAEMSP, AAMS, and the  American Academy of Pediatrics. The 2006 position statement recognized  the continuing debate surrounding air medical transport and noted that  research regarding the appropriate deployment of complex medical care  systems was in its infancy. Furthermore, the position statement noted that  many EMS systems have their own criteria for air medical dispatch, which  usually differ between regions based on demographic, geographic, and  health care resource considerations.
Work on developing national guidelines is under way. After its February  2009 air ambulance safety public hearing, NTSB recommended that the  Federal Interagency Committee on Emergency Medical Services develop  national guidelines for selecting the most appropriate emergency  transportation mode for urgent care. In response, the committee has  begun to develop guidelines for the emergency transport of trauma victims  from the scene of injury. These guidelines may eventually include  recommendations for the transport of patients with other medical  emergencies and for interfacility transports.
section_title: Little Evidence Exists to Link Industry Growth to Safety Concerns
paragraphs: Proponents of increasing state regulatory authority argue that having  multiple providers in the same area creates pressure to fly that can lead to  a number of unsafe practices. They maintain that providers’ high fixed  costs create economic pressure to fly, and the concentration of many air  ambulances in a geographic area further exacerbates this pressure. Air  ambulance providers’ fixed costs can amount for up to 80 percent of a  provider’s total costs. The air ambulance itself can cost from $600,000 to  $12 million when outfitted with varying levels of flight and medical  equipment.
Participants at NTSB’s February 2009 public hearing discussed potential  safety concerns with helicopter shopping. Helicopter shopping refers to  the practice of calling, in sequence, various providers until a provider  agrees to take a flight assignment. Stakeholders who support the existing  regulatory and oversight framework noted that there are situations where  calling additional providers is an appropriate and safe use of resources.  (See table 1.)
Having information on prior turndowns or aborted missions could help a  provider decide whether it is safe to fly. FAA has provided state EMS  officials with a sample letter that could be given to dispatchers within their  state that outlines sample communications policies, including policies on  disclosing information about prior turndowns. However, even with  information on prior turndowns, pilots are responsible for checking  weather conditions and determining if the conditions meet FAA’s  requirements for flying. NASEMSO representatives suggested that the time  spent sequentially calling additional air ambulance providers consumes  time during which a patient could be en route to a trauma center via  ground ambulance.
Call jumping occurs when a provider sends an air ambulance to an  accident scene without a request. If another air ambulance provider is also  responding based on a request from first responders, there is a heightened  risk of collision. Stakeholders who advocate for an increase in state  regulatory authority maintain that, like helicopter shopping, call jumping  can result from economic pressure to fly. However, some instances  perceived as call jumping may stem from a lack of communication among  first responders. (See table 2.)
To minimize the risk of two helicopters responding based on separate  requests from first responders, states can establish communication and  coordination protocols to be followed at the more than 6,000 public safety  answering points, or 911 call centers, nationwide. These centers provide  the opportunity to coordinate air ambulance requests and avoid  dispatching two air ambulances to the same crash scene. However, these  centers are locally based and operated, and their structure varies widely.
Beyond anecdotes, we found little evidence of helicopter shopping  resulting in unsafe flights or of call jumping. We identified FAA’s Aviation  Safety Reporting System (ASRS) as a potential source for such  information. As a voluntary reporting system, ASRS contains reporting  biases reflecting that not all participants in the aviation system are equally  aware of ASRS or equally willing to file reports. Consequently, ASRS  statistics represent a conservative measure of the number of such events  that are occurring. In our review of 464 air ambulance reports submitted to  ASRS over 15 years, we found 2 that contained information about call  jumping and none that described instances of helicopter shopping. These  data could indicate that helicopter shopping and call jumping occur  infrequently. On the other hand, these practices may be underreported if  air ambulance crews are unaware that they can report safety issues to  ASRS.
During the summer of 2010, the Center for Leadership, Innovation and  Research in EMS established the EMS Voluntary Event Notification Tool  (EVENT)—an anonymous, non-punitive and confidential web-based  system that allows anyone in the United States or Canada to report an  event or action that leads to or has the potential to lead to a worsened  patient outcome. Reports received in EVENT are sent to the EMS  governing body of the state, territory or province responsible for the EMS  system in which the event occurred. Once the governing body receives the  anonymous notification, they would be encouraged to address systemic  issues in order to improve the overall quality of care provided. As of  September 1, 2010, EVENT had received one report. While it is too early to  evaluate the impact of the EVENT reporting system, it appears to be a  positive step that could provide useful data for state regulators.
FAA is in the process of addressing several NTSB recommendations  related to safety issues that NTSB has made regarding helicopter air  ambulance safety. FAA officials expect to release a notice of proposed  rulemaking in the fall of 2010 that would address issues such as additional  safety equipment requirements, minimum acceptable weather conditions,  use of risk management practices, and additional training requirements.
section_title: Perspectives Differ on the Impact of Cost-Related Business Decisions on the Services Provided in Air Ambulances
paragraphs: Stakeholders concerned with the growth of the industry assert that  economic pressures have led some air ambulance providers to cut costs by  using smaller, less expensive helicopters and less experienced medical  crews. In particular, they point to the use of small, single-engine  helicopters instead of twin-engine helicopters. According to these  stakeholders, larger helicopters allow access to the patient’s entire body,  while the smaller helicopters that some providers use restrict medical  access to the full body of the patient. However, single-engine helicopters  are not always smaller than twin-engine helicopters.
During our site visits, we observed how patients were transported in one  particular single-engine helicopter. We also saw that medical personnel  had access to the patient’s upper body, which facilitates airway  management, an important component of prehospital care. (See fig. 5.)  The patient’s lower body is situated next to the pilot with a transparent  barrier separating the patient and the pilot. A senior official at that  provider agreed that the space inside the helicopter is limited but said the  helicopter meets the medical needs of most patients. However, there are  differing perspectives in the industry about the need to have access to a  patient’s entire body during transport.
Stakeholders concerned with growth in the industry told us that small  helicopters generally lack climate control, which results in temperatures  in the aircraft that may be either too cold or too hot. According to an  experienced emergency medical technician-paramedic, air that is too cold  has a bad effect on trauma patients, while air that is too hot has a bad  effect on cardiac patients. Stakeholders who favor the existing regulatory  and oversight framework point out that the need for climate control might  vary depending on the region in which the air ambulance operates. An air  ambulance provider that operates in a southern climate may not need a  heater, while one that operates in a northern climate may not need an air  conditioner. One provider we visited that generally operates smaller  helicopters told us that all of its 87 aircraft have heaters and are being  outfitted with air conditioning as they undergo refurbishment. We were  told that physicians and hospitals can exercise some degree of control  over helicopter characteristics. For example, we were told that the  requesting physician sometimes requires that an air ambulance have  climate control when it is necessary for the medical care of the patient in  interfacility transfers. One stakeholder we spoke with commented that  physicians are often unaware that air ambulances may lack climate control  and would therefore not be inclined to ask about it.  According to a senior  DOT official, the department was exploring whether regulation of climate  control in air ambulance helicopters is under federal or state jurisdiction.
Stakeholders concerned with the growth in the industry also argue that, to  save on costs, some providers are hiring less experienced medical crews,  which they maintain degrade patient services. We were unable to validate  this argument through our literature synthesis. We identified seven studies  on the impact of a medical crew’s composition—whether, for example, the  crew consists of a physician and a nurse or a nurse and a paramedic—but  there was no consensus on how the composition of the medical crew  influences a patient’s outcome. We also found three studies examining  the impact of crew composition on transport time, and all three studies  found that crew composition had no impact on transport time. We found  no studies examining the impact of a medical crew’s experience on patient  outcomes.
section_title: Evidence Lacking to Suggest Recent Growth Has Affected Medical Outcomes from Air Transports
paragraphs: Several of the concerns raised by stakeholders within the air ambulance  community appear to be outcomes of industry growth and competition.  For example, concerns about helicopter shopping or call jumping might  arise if providers are competing to gain business. Similarly, concerns  about migration toward single-engine aircraft or reductions in the  qualifications of medical staff might arise as companies seek to cut costs  to improve profitability. The pressure of competing for business and  working to obtain maximum efficiency through cost containment arises in  nearly all business endeavors. These forces are usually good for  consumers because they lead to efficiency, lower prices, and service  offerings better tailored to the needs and desires of consumers. However,  health care markets have some imperfections and these forces might work  differently in these markets. For example, health care consumers may lack  information about their diagnoses, treatment needs, the quality of different  providers, as well as the prices charged by different providers.  Additionally, health insurance can affect consumer’s ability or inclination  to make informed health care choices.  Air medical patients have limited  influence on air medical markets and are not typically making the choice  in terms of mode of transport or provider.
For air ambulance services, medical outcomes are a critical measure of  quality. Through our research, we identified numerous articles  documenting rigorous research on various aspects of air ambulances, but  very few shed light on the effect of the growth of the industry. For  example, we found no studies that compare patient outcomes between  states that have multiple providers in the same region, and states with  fewer providers. Consequently, we were unable to draw definitive  conclusions to support or refute many of the allegations that have been  raised. DOT’s General Counsel and National Highway Traffic Safety  Administration officials agreed that more data on many aspects of air  ambulance operations would enlighten the debate about providing states  greater regulatory authority over air ambulances. While there was  consensus among the stakeholders in the industry that there is a lack of  data about potential concerns, ACCT stated that the debate about the  extent of state regulatory authority of air ambulances is fundamentally one  of philosophical differences about the government’s role in controlling  public services, such as emergency medical services.
section_title: Federal and State Courts and DOT Have Clarified Some Boundaries of Federal and State Regulation of Air Ambulances, but Questions Remain
paragraphs: Because air ambulances have both an aviation component, regulated by  the FAA, and a medical component, regulated by the states, the  boundaries of federal and state regulation have come under question. The  aviation components include the aircraft itself, including its airworthiness  and safety, as well as the personnel who maintain and pilot the aircraft,  communicate with ground personnel, and monitor flight instruments,  while medical personnel attend to the health of the patient on board. (See  fig 6.) These safety components are under the jurisdiction of FAA, which  administers federal aviation regulations that govern safety and operational  requirements, nationwide.  Hence, the industry is subject to FAA safety  regulations covering areas such as pilot training requirements, flight  equipment, and aircraft configuration. The medical component, on the  other hand, is under state regulatory authority. DOT opinion letters and  federal and state court decisions have affirmed that states have the  authority to enact and enforce requirements for medical services delivered  to patients in air ambulances and for the medical staffing, personnel, and  equipment used to deliver those services. States also have the authority  to develop training on how to use an aircraft or equipment so as to ensure  proper patient care. For example, such training might focus on how  pressurization in the aircraft cabin affects specific medical conditions.
As noted earlier, some stakeholders favor changing the regulatory and  oversight framework so that states would have a stronger role in  regulating the nature and scope of services that an air ambulance provider  must offer. For example, state EMS officials believe that they should be  able to determine the appropriate number of air ambulances serving a  particular area and set additional standards in terms of equipment used  and services provided, as they currently do for other parts of the EMS  system.  However, strengthening the states’ role would require federal  legislation to alter the Airline Deregulation Act (ADA) of 1978 that  deregulated the air carrier industry. Court decisions subsequent to the  passage of the ADA determined that air ambulances were air carriers as  defined by the ADA. In enacting the ADA, Congress determined that  “maximum reliance on competitive market forces” would best further  “efficiency, innovation, and low prices” as well as “variety  quality ...  of air transportation.” One ADA provision, designed to phase out state  governments’ economic control over the industry, explicitly precludes  state regulation of matters related to air carrier rates, routes, and  services. Courts have ruled that this provision preempts states from  acting in some regulatory areas, such as requiring prospective air  ambulance providers to obtain a certificate of need based on the state’s  assessment of the population to be served and the potential for  unnecessary duplication of services.
Over the past two decades, federal and state courts, and DOT, through  opinion letters issued by its Office of General Counsel, have affirmed these  authorities and have determined the specific issues that states can and can  not regulate. (See table 3.) Dating as far back as 1986, courts have ruled  that state certificate of need laws are unenforceable because they conflict  with the ADA by limiting the number of air ambulance services doing  business within the state. DOT, responding to numerous inquiries from  state Attorneys General and private industry, has advised that certificate  of need provisions and similar “public convenience and necessity”  provisions are expressly preempted by the ADA because the states are  attempting to regulate in the area of price, routes, and services. Most  recently and prominently, a federal district court in North Carolina found  that the state’s certificate of need requirement was preempted by ADA.  These rulings are limited to specific states.
Stakeholders concerned with the growth in the industry generally support  a stronger role for states in regulating the air ambulance industry. They  believe that many of the court rulings and DOT opinions diminish states’  ability to oversee patient care and safety. For example, DOT, in a letter to  an attorney in the state of Hawaii, wrote that states cannot require,  through regulation, that air ambulance providers operate on a 24/7 basis  on the grounds that such a requirement constitutes economic regulation.  These stakeholders view a requirement for air ambulances to operate on a  24/7 basis as a patient care issue that states should be able to control. DOT  further stated in its letter that states could contract with air ambulance  providers for these services. Under such circumstances, the states would  be functioning as customers rather than regulators, and therefore not be  subject to federal preemption of state regulation. In commenting on a  draft of this report, ACCT and NASEMSO stated that contracting for air  ambulance services in this manner is not a realistic option for states  because of fiscal resource limitations. (See app. III for a complete  description of significant federal and state court cases and DOT and state  attorneys general opinions.) it is possible that a state medical program, ostensibly dealing with only medical  equipment/supplies aboard aircraft, could be so pervasive or so constructed as to be  indirectly regulating in the pre-empted economic area of air ambulance prices, routes or  services.
Stakeholders have expressed concern that the open-ended nature of this  statement allows any medical regulation to be challenged as an economic  regulation and thus be preempted under the ADA. However, it is important  to note that DOT did not find that any specific “medical” regulation was  preempted under this reasoning and has not yet found that any state  regulation to date falls within this category.
Stakeholders have raised concerns that there is no regulation at either the  federal or state level to protect the public from the economic  consequences of air ambulance practices. These stakeholders also  expressed concerns about areas of state regulation that create uncertainty  because DOT and the federal and state courts have yet to rule on them,  such as a requirement for climate control on air ambulances. Uncertainty  about how the courts would rule has led to calls for a federal legislative  solution that would spell out federal and state authorities. Several federal  legislative proposals seek to clarify the states’ role in regulating medical  issues and to allow the states to institute certain types of economic  regulation for air ambulances, including certificate of need requirements,  by carving out an exception to the ADA’s preemption of state regulation of  prices, routes, and services. However, the current scheme of regulation of  air ambulances has been in place since 1978 and has generated four  significant court decisions that, for the most part, have addressed fact- specific questions about the relationship between federal and state  authority to oversee and regulate the industry. DOT has stated that the  continued use of case-by-case departmental determinations can still clarify  the appropriate role of states in regulating air ambulance services. DOT  officials told us that states should address their uncertainties to DOT, and  the department is more than willing to respond with an opinion based on  the facts and circumstances presented. However, it appears that states  have not fully utilized this option. Since 1986, DOT has issued only eight  opinion letters in response to inquiries on the limits of federal and state  authority over air ambulances. Stakeholders favoring increased state  regulatory authority have expressed concerns with continuance of this  case-by-case approach, stating that it results in piecemeal guidance,  inconsistency, and confusion.
DOT officials have also raised concerns that allowing states to exert  authority, in this case in the economic area, could create a patchwork of  state regulation disrupting what has been, until now, a fairly well- understood set of uniform rules. Moreover, DOT, along with the Federal  Trade Commission and the Department of Justice, have expressed concern  that state authority to implement certificate of need laws could be used to  limit market entry for air ambulances and reduce competition in the air  ambulance industry—an outcome Congress sought to avoid when enacting  the ADA.
section_title: Agency and External Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Departments of Transportation  (DOT) and Health and Human Services (HHS), and the National  Transportation Safety Board (NTSB) for comment. We also invited  representatives from the Association of Air Medical Services (AAMS), the  Association for Critical Care Transport (ACCT), the Air Medical Operators  Association (AMOA) and the National Association of State EMS Officials  (NASEMSO) to review a draft of this report and provide comments. There  was a consensus among the reviewers that there is a lack of data about the  air ambulance industry and a recognition that the study had to rely on  available data and information, which we obtained by conducting a  comprehensive review of the existing subject area literature and recording  stakeholder comments and opinions.  Further, this lack of empirical  evidence limited our ability to determine the full impact of changes in the  industry.  Our research of the air ambulance industry and discussions with  stakeholders within the industry identified two distinct perspectives about  the impact of the changes.  To the extent that data or other information  was available, we provided it to inform these perspectives.  Where data or  other information did not exist, we clearly attributed statements and  identified the perspective of the stakeholders making the comment.
DOT’s Office of General Counsel and HHS provided technical comments  that we incorporated as appropriate. NHTSA, within DOT, provided  detailed comments that we also incorporated as appropriate. NTSB  transmitted written comments to us in a letter.  (See app. IV).  NTSB’s  statement in its letter that GAO was asked to “review the U.S. air  ambulance industry to determine if changes in oversight authority are  needed” is not accurate. As stated in the report, the objectives of our work  were to examine how the air ambulance industry had changed over the  last decade and the implications of these changes, as well as to examine  the relationship between the federal and state oversight and regulation of  the industry.  While our report contains information that may be used  when considering whether changes in oversight authority for the air  ambulance industry may be needed, we were not asked to determine if  changes are needed and thus do not address this question in our report.  NTSB identified three issues that it believed should be discussed in more  detail in our report. First, NTSB noted that the draft should have  addressed in greater detail that competition in the air ambulance industry  is restricted because of fixed fee reimbursements by payers (private  insurers, Medicare, and Medicaid) for air ambulance services and the  industry’s limited capacity to adjust prices. While Medicare and Medicaid  reimbursement rates are fixed, private sector prices are not. As is the case  with most health care services, air ambulance providers generally  negotiate prices with insurance companies.  NTSB further noted that such  restricted competition could be linked to safety concerns. Following the  Board’s February 2009 public hearing on air ambulance helicopter safety,  NTSB issued several safety recommendations, including one to HHS to  determine if reimbursement rates should differ according to the level of air  ambulance transport safety provided.  In response, HHS stated that it did  not believe that payment should vary based on the level of transport safety  provided but that all air ambulance operators should meet minimum FAA  safety standards.  Second, NTSB also noted said that the draft did not  clearly state whether there is evidence that helicopter shopping and call  jumping occur, and if so, to what extent.  In response, we clarified that  beyond anecdotes, we found little evidence of helicopter shopping  resulting in unsafe flights or of call jumping.  NTSB additionally raised  questions about our use of ASRS as a source of information regarding the  prevalence of these practices.  We agree that ASRS has limitations, and  opted to include it in the report because it is one of the few available data  sources with information applicable to the industry. We added additional  information in the report about the limitations and potential under- reporting.  Finally, NTSB noted that it would be helpful to know if there is  evidence to support the belief that the use of air ambulances improves the  chances of survival for trauma victims and other critical patients.  It was  not our objective to determine if air ambulance transport is beneficial and  we did not do the research necessary to comment on the validity of the  belief.
AAMS provided technical comments which we incorporated where  appropriate.  Comments provided by ACCT, AMOA, and NASEMSO were  generally reflective of their views regarding the implications of the  changes in the air ambulance industry and the role of states in regulating  the industry. We incorporated their comments throughout the report as  appropriate.
We are sending copies of this report to the appropriate congressional  committees, DOT, the Department of Health and Human Services, NTSB,  and other interested parties. The report also is available at no charge on  the GAO Web site at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-2834 or dillinghamg@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix IV.
section_title: Appendix I: Scope and Methods
paragraphs: The scope of our review was the structure and practices of the air  ambulance industry in the United States, and framework for overseeing  and regulating U.S. air ambulance services.
To determine how the U.S. air ambulance industry changed from 1999  through 2008, we obtained and analyzed available data that provided  information on the growth and evolution of the industry, including shifts in  business models, and the types of air ambulance aircraft that are used to  provide services. Specifically, we reviewed and analyzed data compiled by  Ira Blumen, MD. Dr. Blumen is the Medical/Program Director, University  of Chicago Aeromedical Network. His database on the air ambulance  industry extends back to 1980 and includes the number of helicopter air  ambulances used in the industry and the number patients transported. We  also reviewed and analyzed the data contained in the Atlas and Database  of Air Medical Services (ADAMS) and interviewed a senior official at the  Calspan-University of Buffalo Research Center (CUBRC), the research  organization that maintains and publishes the database in partnership with  the Association of Air Medical Services (AAMS). ADAMS has been  annually updated since 2004 and serves as a centralized source of  information on air medical service providers, including the number and  location of air ambulance helicopter bases. ADAMS began including data  for fixed-wing air ambulances in 2007. At our request, CUBRC also  provided us with an update of the types of helicopters used in the air  ambulance industry. We also obtained and analyzed data on Medicare  payments to air ambulance providers from the Centers for Medicare and  Medicaid, the agency within the Department of Health and Human  Services that administers the Medicare and Medicaid programs.  Additionally we reached out to more than 400 air ambulance providers,  industry associations, and state Emergency Medical Services officials  asking that they provide us any data, information, published or  unpublished reports, papers, articles, or other potentially relevant sources  of information of which they would like us to be aware. To determine how  the industry has evolved, we examined industry, National Transportation  Safety Board, and stakeholder documents. To determine the implications  of these changes for the availability of services, efficient use of air  ambulance resources, safety, and services provided, we undertook an  extensive literature synthesis covering over 250 articles describing  scholarly research that produced quantitative results. For more detailed  information on the literature synthesis, see appendix II. We attended two  semiannual meetings of the Federal Interagency Committee on Emergency  Medical Services. We also reviewed previous GAO reports; Federal  Aviation Administration (FAA) documents; the transcript of a 2009  National Transportation Safety Board’s (NTSB) hearing on helicopter  emergency medical services and the board’s recommendation letters; a  congressional hearing transcript; and congressional testimonies, reports,  and position papers published by AAMS and other stakeholder  associations; and published documents of the Foundation for Air-Medical  Research and Education, and the Flight Safety Foundation. In addition, we  conducted interviews with representatives of AAMS; industry stakeholders  who favor changing the regulatory and oversight framework, including  representatives of the Association for Critical Care Transport (the leading  proponent of change in the regulatory and oversight framework) and  industry stakeholders who oppose changing the regulatory and oversight  framework, including representatives of the Air Medical Operators  Association (the key industry group favoring the existing regulatory and  oversight framework). We also conducted four site visits to air ambulance  providers that reflected differing geographic locations, business models,  and opinions about regulatory structure. Specifically, we observed  operations at a government-provided air ambulance service operated by  Maryland State Police, a hospital-based air ambulance service in the mid- Atlantic region (MedStar Transport) and independent providers  headquartered in Missouri (Air Evac Lifeteam) and Maine (LifeFlight of  Maine). Air Evac LifeTeam’s management favors the existing regulatory  structure, while LifeFlight of Maine’s management advocates increased  state regulation of the air ambulance industry. We also met with  representatives of Dartmouth-Hitchcock Advanced Response Team, which  is a hospital-based provider, and Boston Medflight, which is consortium- owned.
To determine the relationship between federal and state oversight and  regulation of the air ambulance industry, we reviewed federal aviation  laws, and the Airline Deregulation Act (ADA) of 1978, and challenges to  state authority to regulate in matters that are federally preempted under  these acts. We also reviewed Department of Transportation (DOT) General  Counsel letters and state attorneys general opinion letters to state officials  or attorneys.  We discussed these letters, which interpret provisions of the  ADA, with DOT General Counsel officials.  We also discussed the  implications of industry trends and federal and state regulatory authority  with the key industry stakeholders mentioned above, as well as with  officials at the Federal Aviation Administration (FAA); the National  Highway Traffic Safety Administration; NTSB; and representatives of the  National Association of State Emergency Medical Services Officials. We  also received briefings and reviewed documents provided by proponents  and opponents of increased state regulation.
section_title: Appendix II: Literature Synthesis
subsections: section_title: Step 1. Literature search
paragraphs: To identify and evaluate literature and studies that contain empirical data  related to the air ambulance industry, we conducted a literature synthesis.  Our objective was to identify any studies with empirical data related to air  ambulance availability, services provided in the air ambulance,  competition, and cost. We initially searched for articles published in the  preceding 5 years, from January 2005 to January 2010. The search focused  on the safety, cost, quality, and oversight of air ambulance services,  including studies and articles that addressed the issues of helicopter  shopping and call jumping. The search statements included a variety of  terms to capture materials that examined these issues. We queried various  bibliographic research databases including    ProQuest,    AcademicOneFile,    MEDLINE,    Dialog Transportation and Transportation Business,    Electronic Collections Online,    Nexis for scholarly and trade literature,    Congressional Research Service,    Congressional Budget Office,    GAO,    Government Printing Office,    National Technical Information Service databases for publications  produced by or funded by the federal government,    PolicyFile, and    WorldCat for government publications and literature that is not published  commercially or is not generally accessible.
The results of this search, combined with articles obtained through  discussions with stakeholders in the air ambulance industry, Internet  searches, and our review of air ambulance-related Web sites, yielded 36  relevant studies.
As the job progressed, and the dearth of quantifiable data became evident,  we expanded our search criteria to include all articles published between  January 1, 2000, and May 2010, which contained empirically derived  results. We determined that this time frame would include studies  performed prior to the proliferation of helicopters in the air ambulance  industry that started occurring around 2002-2003. In this search, we looked  at air ambulances in a broader context and aimed to be more  comprehensive than in previous searches. Search statements relied  primarily on subject terms (when available) for air ambulances and similar  concepts and did not include any other search terms as modifiers. The  databases searched were    Nexis Statistical Master File,    ProQuest,    Academic OneFile,    GAO,    MEDLINE,    Biosis,    SciSearch,    Cumulative Index to Nursing and Allied Health Literature,    EMBASE,    PASCAL,    Gale Group Health and WellnessDatabase,    National Technical Information Service,    TRIS,    Government Printing Office,    Electronic Collections Online, and    Ovid.
The librarian reviewed the search results and removed duplicate citations,  foreign air ambulance service, military based, or medical procedure  studies, and nonrelevant articles. A total of 641 citations were sent to the  team for review.
section_title: Step 2. Abstract review
paragraphs: The team reviewed all the titles sent by the librarian. Articles with no  abstract were excluded due to lack of empirical findings, high probability  of article pertaining to current events, or an editorial commentary of  current policy issues. For articles with abstracts, two team members  independently reviewed the abstract to determine if the article addressed  the previously identified topics and appeared to contain empirical data. If  both reviewers agreed that the article was relevant or not relevant, the  article was saved or rejected accordingly. When the reviewers disagreed, a  third team member reviewed the abstract and made the final decision. The  team requested that the librarians obtain complete copies of all saved,  relevant articles. This process yielded 91 relevant studies.
section_title: Step 3. Synthesis
paragraphs: All relevant full text studies underwent three reviews—first by an analyst  who synthesized the study, second an initial review by a methodologist,  and the third and final review by a second methodologist. The  methodologists determined whether the research was sufficiently rigorous  to support the stated conclusions. Articles that were not based on U.S.  populations or did not include empirical data were excluded. Relevant  articles were summarized in a synthesis document that captured the title,  authors, setting, sponsor of the research, methods, findings and  conclusions, and limitations.
section_title: Step 4. Bibliography review
paragraphs: The team reviewed the bibliography for relevant articles synthesized in  step 3 to identify additional potentially relevant articles. The team then  selected articles from the bibliographies that appeared relevant and were  (1) in English, (2) not based on a foreign population, (3) not international  studies, and (4) not military studies. For articles that met these criteria,  the team attempted to obtain the abstracts from the National Institute of  Health’s, National Library of Medicine PubMed database  (http://www.ncbi.nlm.nih.gov/pubmed).
The team then repeated the abstract review, synthesis, and bibliography  review process one additional time (see fig. 7).
section_title: Step 5. Analysis
paragraphs: With a methodologist’s help, the team analyzed and aggregated the  synthesized articles to develop narratives describing the findings of the  literature.
section_title: Appendix III: Key Court Cases and Opinion Letters from DOT or State Attorneys General
paragraphs: Table 4 summarizes key court cases related to the air ambulance industry.  Table 5 summarizes DOT or state Attorneys General Opinions related to  the air ambulance industry.
section_title: Appendix IV: Comments from the National Transportation Safety Board
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Maria Edelstein, Assistant  Director; Edmond Menoche, Senior Analyst; Amy Abramowitz; Heather  Bartholomew; Owen Bruce; Christine Brudevold; Leia Dickerson; Leslie  Gordon; David Hooper; Karla Lopez; Ashley McCall; Sara Ann Moessbauer;  Cynthia Saunders; and Kristin VanWychen made key contributions to this  report.
section_title: Bibliography
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