AMR to sell medevac business to LifeTeam

The Federal Trade Commission has agreed to allow the parent companies of the state’s only two air ambulance providers to merge as long as one of the medevac firms is sold to prevent a monopoly in the islands.

Air Medical Group Holdings Inc., which owns Hawaii Life Flight, is buying American Medical Response, owner of AMR Air Hawaii, in a $2.4 billion deal the FTC alleged would likely harm competition.

Hawaii Life Flight and AMR Air Hawaii are the two main air ambulances, transporting mostly neighbor island patients to Oahu medical facilities. The combination of the two would reduce competition, which often leads to higher prices.

As a condition of the merger, AMR announced Thursday the sale of its medevac business to AirMD LLC, which does business as LifeTeam, an air ambulance provider that currently operates the aircraft used by AMR for transports in Hawaii. The FTC is soliciting public comment on the agreement for 30 days before final approval.

“We will do everything we can to ensure a smooth transition of our Hawaii air operations to LifeTeam,” said Speedy Bailey, regional director for AMR’s Hawaii operations, in a news release. “Because both organizations have been working together for five years, the transition will be a seamless one. AMR’s ground ambulance operations will remain unchanged.”

Kaiser Foundation Health Plan sued Hawaii Life Flight in 2016, claiming the air ambulance company is charging exorbitant rates that are significantly higher than the prices of AMR Air Hawaii.

“Because we’re a state made up of islands, and because most of the advanced medical care is on Oahu, air ambulance services are a necessity for our neighbor islands. What’s most important to me and probably everyone is that the medical care is good, they’re safe and the cost,” said community physician Jim Ireland. “By having two separate companies, hopefully you can get the safest, highest-quality care with some price controls.”

AMR charges thousands of dollars less than Hawaii Life Flight for similar flights, according to Honolulu Star-Advertiser research. A Hawaii Life Flight bill for emergency transportation from Hilo to Oahu in December 2013 totaled $70,580, with a base rate of $16,441 and a charge of $219 per mile, or $54,139 in mileage costs. AMR previously said it charged a base rate of $14,000 per flight and $25 per mile, which would make the same flight about $20,000.

Patients typically pay a portion of the bill based on their health insurer’s contract with the air ambulance carrier. In one case Kaiser was sued by a patient after paying just 28 percent — or $14,000 — of a $50,000 air ambulance bill from Hawaii Life Flight. The patient was left with a $36,000 balance due and argued that Kaiser should pay the full amount for the emergency transportation services.

Most air ambulance companies offer some type of insurance program to prevent exorbitant out-of-pocket costs if a patient must be transported in the future.

“It’s very important for people on the neighbor islands, especially those with medical issues, to research that and find out if that’s something that’s good for them,” Ireland said.

The sale is scheduled to close March 20.