Costs of air-ambulance transport flying high

Billing practices of air-ambulance services is a “hot topic” among many insurance groups. The question involves the large and often unexpected charges airborne transports can impose on insurers and consumers.

Patients may need air transport when they’re physically and mentally unable to give consent, or to understand the cost impact or options.

No one questions the value of emergency air transport in times of great medical need. Yet issues abound about how the services are billed and paid for.

An air ambulance may sit unused for hours or even days, but expenses are constantly being incurred. Often four crews of pilots and medical professionals work six-hour shifts daily to be “on call.” Maintenance expenses continue even without flights.

Medicare and Medicaid are the largest payers for these services, and have fixed billing schedules on a state-by-state basis. Yet no state appears to cover the full cost for medical air services. Next come private insurers — including healthy and property-casualty insurers. Collecting from uninsured patients is sporadic at best.

Herein lies the issue, which some say is “tantamount” to insurance fraud via excessive billing.

Using what’s called “rate-based billing,” many air ambulance services “roll” insurance bills into the overall operating expenses. Insurers thus arguably pay a disproportionate share of expenses. The billing includes staff and operational expenses far beyond the time spent transporting the insured patient.

Equally concerning, patients are personally billed for the portion of air transport that their insurance doesn’t cover. That can impose thousands of dollars of surprise costs. Consumers are losing their homes from court judgments for air ambulance services the patients never requested or agreed to pay, one Western legislator recently said of incidents in her state.

Compounding matters is whether state insurance regulators have authority over air-transport companies; the federal Airline Deregulation Act covers these services. States lack jurisdiction, a federal court also recently ruled. This situation directly impacts consumers and health insurers. It also affects property-casualty carriers that pay for the services — while denying the state-regulated industry a direct say in oversight.

Large air-transport bills may fall short of traditional insurance fraud. Yet many observers are calling for legislation or for revising federal aviation law to permit more state regulation of air-service providers.

Air ambulances involve large insurance billings, and charges beyond actual services rendered. The Coalition will actively monitor developments for fraud implications, and keep members informed. Consumers and insurers equally should be aware of this important issue. The large bills directly impact on the cost of insurance, medical services, and premiums that consumers pay.

About the author: Matthew Smith is associate director of government affairs for the Coalition Against Insurance Fraud.

Leaders in $375-million scam lie that seniors infirm, homebound

Wilbert James Veasey Jr. and nurse Charity Eleda mounted a form of home invasion. They’re the latest criminals who’ll serve prison time for one of the largest Medicare cons in history.

Veasey and Eleda were prime-time players in an elephantine $375-million plot that cranked out thousands of false claims for phony care of supposedly infirm and homebound seniors. The pair shines a cold light on how a Dallas-area doctor named Jacques Roy masterminded the home-healthcare ripoff.

Medicare gives seniors a leg up if they’re stuck in their homes, too unhealthy to get around. Uncle Sam pays for specialists to come to their homes and help with their day-to-day medical needs.

Phony home-health claims have robbed Medicare for years. What’s new was Roy’s dark genius for amping up patient recruiting and fake claims to unheard-of levels of industrial efficiency. One more reason Medicare thievery of all kinds could be America’s single largest form of insurance fraud.

Claimed 11,000 seniors in his care

Roy specialized in certifying people for home healthcare benefits, taking this con to new heights. He created a fantasy world, falsely certifying 11,000 seniors as eligible for home healthcare. He convinced Medicare that somehow these seniors were all under his close medical care and supervision.

Veasey and Eleda ran home-health agencies in the Dallas area. They helped Roy convince Medicare that often-homeless street people were eligible for home-health visits. Or that perfectly healthy, mobile seniors were bedridden and needed homecare.

Roy bribed 500 home-health agencies like Veasey’s and Eleda’s to pump him with patients. The gang paid many beneficiaries cash, food stamps and groceries to hand over their Medicare identifiers. The seniors’ personal information such as SSN was rocket fuel for his con.

Roy falsely certified the seniors for homecare. He received a slice of fake claims the home agencies billed, and soaked Medicare for his own home visits as the supervising doctor. Roy even set up a boiler room where employees worked all day robo-signing his name on Medicare claims.

Veasey knocked on doors, convincing healthy seniors to hand over their Medicare and other personal information for Roy. Veasey was a large and reliable source of patients, feeding Roy their names and personal information for false billing.

Eleda pulled in homeless seniors off the streets, for example. She often bribed cohorts $50 per beneficiary they found and sent to her vehicle parked outside a Dallas homeless shelter’s gates. She promised the homeless people free McDonald’s meals for their medical information.

Forged patient care plans

Eleda also invented medical records to make it seem the seniors qualified for home healthcare. And she forged patient care plans, and helped dummy up daily logs supposedly documenting hundreds of worthless or phantom patient-care visits.

This frenetic activity let Roy and the collaborating home-health agencies pour bills into Medicare under the happy illusion of homebound seniors getting care they needed, under the watchful eye of a physician.

Roy was bound to attract attention. On paper, he ran the largest home-health operation in the U.S. — dozens of times more than any specialist practitioner.

Medicare got wind and started investigating. Investigators found healthy seniors mowing their lawns and working on cars in their driveways. Veasey was handed 14 years in federal prison, and Eleda four years. Roy will face up to life in federal prison when sentenced.

The welcome mat for Roy’s uncaring homecare plot was yanked, replaced with a lock and key that will keep the conspirators, well, homebound in jail for years to come.

Hill hearing reignites question: What’s federal anti-fraud role?

Franklin Roosevelt signed the McCarran-Ferguson Act in 1945. This groundbreaking law has led to the regulation of insurance — including insurance fraud — to the states rather through federal oversight.

The federal government does play a role, such as overseeing federal health-insurance programs like Medicare. Nonetheless, the states remain more in charge of insurance regulation than almost any other sector of American business.

The result is 50 separate states with differing laws, codes and regulations governing selling, underwriting, claims within their borders — and also insurance fraud. Mostly the states have risen to the occasion, with 48 of 50 states enacting anti-fraud laws.

Yet the actions of Congress do impact the battle against this crime. From major national disasters (FEMA) through healthcare legislation (the ACA and what lies beyond) by virtue of federal oversight and funding, many laws impact the world of insurance. While many organizations are involved with insurance and fraud-specific matters, no national organization “bridges” state insurance oversight and federal legislation or administrative actions.

To the positive, Congress does appear to appreciate the importance of knowing about, and fighting against, insurance fraud. The Coalition testified before a key U.S. Senate subcommittee this week. We shared insights into how insurance fraud hurts all Americans, and urged needed steps for turning the corner on this crime. Especially important, we urged more public and private sharing of medical data to better ferret out hidden crimes affecting both sectors.

In the process, the “age-old” debate of federal vs. state regulation of insurance resurfaced during the hearing.

While there is little doubt state regulation will remain in place, the question must be addressed: What role can and should the federal government play in fighting insurance fraud?

Going forward, Congress and the White House should keep in mind three mantras. First, stay keenly aware of the high cost insurance fraud imposes on consumers and the American economy. Second, make sure any federal legislation meets the “do no harm” test of not unduly burdening or hindering state anti-fraud efforts. And third, be vigilant in identifying where federal involvement will help combat fraud at all levels.

About the author: Matthew Smith is associate director of government affairs for the Coalition Against Insurance Fraud.