Air Methods: The 2023 Unnecessary-Flight Overpayment Settlement

In the Air Methods overpayment settlement, the company agreed to pay $1,050,873 to resolve allegations that it kept government payments for more than 100 flights it knew were medically unnecessary. Its own internal review allegedly identified flights that failed coverage requirements. If you work in flight review or billing, that is the handoff to recognize: a clinical finding inside the company, followed by a decision about money already collected.

Air Methods Corporation is a national provider of air medical transport services. The U.S. Attorney’s Office for the Eastern District of Kentucky announced the civil settlement on August 15, 2023. It covered allegations involving payments from Medicare, Kentucky Medicaid, TRICARE and the Department of Veterans Affairs. A private citizen brought the whistleblower case under the False Claims Act.

The Internal Review Identified the Problem

The government alleged that Air Methods’ internal review identified flights that failed the coverage requirements, including flights carrying patients who did not meet trauma criteria. The government’s account puts knowledge inside the company, through its own review process. The allegation then follows the money: payments for those flights remained with Air Methods when the government said they should have been returned.

We expect a clinical review to change what a business does with a claim. Identifying a payment problem and keeping the money anyway would turn that safeguard into paperwork. In the government’s account, the money belonged back in the health care programs that paid it.

The False Claims Act reaches knowingly keeping money owed to the government as well as submitting false claims for payment. That is why a review’s findings can matter beyond the clinical department. A reviewer may recognize the coverage problem. Someone handling refunds may know what happened to the payment.

What Situations Require an Air Ambulance?

For the coverage requirements at issue in the Air Methods case, the patient’s medical condition had to require air transport, and ground ambulance transport had to be inappropriate. Medicare’s ambulance coverage standard looks at both the need for ambulance transportation and the level of service provided. The practical question for an air review is what made ground transport unsuitable for this patient. The trauma-criteria example in the Air Methods announcement puts that question in clinical terms the people reviewing the flights would recognize. The Medicare Benefit Policy Manual explains that medical necessity depends on the patient’s condition at the time of transport.

Air transport has provisions of its own. For rural air services, Medicare recognizes qualifying requests by medical personnel and approved emergency-service protocols under the Medicare law’s rural air ambulance provisions. We assess those details with the people who know the flight and the request behind it.

For ground transport, the same distinction between needing treatment and needing an ambulance runs through repeated dialysis rides. In the Air Methods case, the additional question was why the patient needed to fly.

What Flight Reviewers and Billers Can See

The useful evidence connects the patient’s condition and the payment received to the later review and refund decision. Flight staff may know what they observed and recorded. Review staff may know why a flight failed a coverage check and who received that finding. Billing or refund staff may know whether the corresponding payment was returned. Those are different views of the same transaction.

The Health and Human Services Office of Inspector General’s ambulance guidance identifies the clinical and operational information that belongs in a trip record: why other transportation was unsuitable, the patient’s condition, the service provided, who ordered the trip and the trip’s timing. Those details give a reviewer something concrete to compare with the claim.

In cases involving altered patient-care reports, the discrepancy may lie between what the crew saw and what the final report says. The Air Methods allegation follows the review into the company’s response. We would want to understand how a finding about a particular flight reached the people responsible for its payment, and what they did with it.

The Cost of Readiness and the Payment for a Flight

Air Methods’ costs continued even when its aircraft were not carrying patients. In its annual report for 2016, the company reported that 86% of its air-medical operating costs were mainly fixed. Revenue from completed transports has to cover the expense of keeping the service ready between flights. That makes every paid transport matter to the business, including a payment its own review later calls into question.

Medicare’s air ambulance payment structure gives fixed-wing and rotary-wing services their own base and mileage rates. A rural pickup adjustment applies to both the air base payment and mileage.

The government’s allegation against Air Methods went back to eligibility for payment, then to what the company did after its review identified a problem. Readiness costs do not make an unnecessary flight necessary.

Retained Overpayments Also Appear in Ground Ambulance Cases

North East Mobile Health Services faced allegations in a 2018 Maine settlement that it billed Medicare for transports falsely described as medically necessary and knowingly retained Medicare overpayments. That is the same turn: what the provider knew after it was paid.

The Maine matter also reached the source of the physician certification statements. In a separate agreement, Maine Medical Center resolved allegations that its personnel supplied inaccurate or incomplete statements to the ambulance provider. It shows why we follow the clinical information across organizations as well as across departments.

What Is the Reward for Uncovering Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Air Methods settlement resolved a qui tam lawsuit brought by a private citizen, and the Justice Department announced that the whistleblower would receive a share of the settlement.

The Separate FAA Airworthiness Settlement

Air Methods’ separate $825,000 FAA airworthiness settlement concerned one helicopter with allegedly severely corroded pitot tubes. The Justice Department announced that settlement on November 20, 2020. The United States brought the civil case directly over alleged violations of Federal Aviation Administration airworthiness regulations. The billing settlement examined here concerned payments for patient flights, a different allegation.

You Know What the Flight Review Found

If you saw a flight review identify coverage failures and the payments stayed put, speak with our whistleblower experts about what happened after the review. We connect your clinical and billing knowledge to the company’s decisions and bring in healthcare fraud whistleblower lawyers who understand ambulance overpayments. From that first conversation through the case, we are your partners in pursuing the money owed back to the government.