1.) The Air Ambulance Industry Has Seen Growth and Structural Change, but Perspectives Differ on Implications for Availability, Efficient Use, Safety, and Services Provided

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. Since 1999, the structure of the air ambulance industry has also changed. 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. Literature Indicates That Questions about the Medical Necessity of Some Air Ambulance Transports Have Existed for Decades

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. 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. However, some instances  perceived as call jumping may stem from a lack of communication among  first responders. Perspectives Differ on the Impact of Cost-Related Business Decisions on the Services Provided in Air Ambulances

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. 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. 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. Since 1986, DOT has issued only eight  opinion letters in response to inquiries on the limits of federal and state  authority over air ambulances. 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. 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. 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. 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. Mileski, S.E. Knowlton, and S.A. Bowers. 2 no. “Physician Presence on a Helicopter  Emergency Medical Service: Necessary Or Desirable?” Aviation, Space,  and Environmental Medicine vol.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

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.