A firm that controls one of two air ambulance companies in Hawaii is acquiring the second medevac business in a transaction that could create a monopoly in the islands.

Air Medical Group Holdings Inc., which owns Hawaii Life Flight, plans to buy American Medical Response, owner of AMR Air Hawaii, in a $2.4 billion deal, the companies recently announced.

Hawaii Life Flight and AMR Air Hawaii are the two main air ambulances serving the state. The combination of the two would reduce competition, which often leads to higher prices.

Kaiser Foundation Health Plan last year sued Hawaii Life Flight, claiming the air ambulance company is charging exorbitant rates that are significantly higher than AMR Air Hawaii’s.

“There could be some serious ramifications when a quasi monopoly may be formed. If they’re the only game in town, it kind of puts the health care consumer at a disadvantage,” said state Rep. Angus McKelvey (D, West Maui). “Air ambulance is a vital service for the neighbor islands. It’s a lifeline service. People who get put on those planes are usually in critical situations. If that lifeline gets interrupted for whatever reason, it could be seriously devastating to a family in need.”

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.

“For me the concern would be … is this (purchase of AMR) going to cause a situation where now the higher price becomes the price and that’s it?” McKelvey said. “And now all these people are going to have to absorb this into their medical care.”

The acquisition is subject to regulatory approval by the Federal Trade Commission and is expected to close in October, said Reid Vogel, spokesman for AMGH.

“Ultimately, the goal is the synergies of these companies working together that can benefit all,” he said. “Our patients and customers will benefit from the combination of AMGH and AMR because together we can shorten response times, improve transportation efficiency and control costs while providing the same level of lifesaving access and quality care in our patient’s time of need.”

He declined to comment on whether the medevac companies would be consolidated in Hawaii, but said there will be no reduction in service and that current payer agreements will be honored.

AMR spokeswoman Donna Itzoe said, “Currently there are no changes to any pricing planned (for Hawaii) at this point.”

State Sen. Roz Baker (D, West Maui-South Maui) introduced a bill earlier this year to require hospitals, before transferring a patient to another facility via air ambulance, to first call a carrier contracted with the patient’s health insurer in an effort to prevent excessive medevac charges. The bill died in the legislative session.

“We’re totally unable to do anything about pricing. It’s all controlled by the feds. It’s an issue we are wrestling with as a group of states, but unless the Congress changes the law and allows us to either negotiate rates or set rates, we as a state have very little (control),” she said. “There are benefits sometimes to have a consolidated management structure, and there may be downsides to that. The issue of how helicopters or fixed wings get deployed, how the charges are (calculated), what some of the practices are, it’s a concern around the country because it’s expensive.”

States are prohibited from regulating medevac rates under the federal Airline Deregulation Act, passed in 1978, so air carriers are free to charge whatever they want.

The combined company is expected to transport more than 5 million patients per year via air and ground ambulances in 46 states and the District of Columbia.

“AMGH and AMR have worked together in many markets as well as disaster response and will have more integrated service offerings in the future for patients, health systems and regions,” Fred Buttrell, president and CEO of the Air Medical division, said in a news release. “Together we will preserve the best attributes of each for the benefit of all stakeholders focusing on local market solutions.”