BISMARCK — North Dakota insurance regulators have issued a cease-and-desist order against AirMedCare Network for selling illegal air ambulance subscriptions.
Insurance Commissioner Jon Godfread announced the cease-and-desist order Monday, Feb. 10, which he said was in response to AirMedCare's violation of a law passed in 2017 banning the sale of ambulance subscription plans.
"The complete disregard for North Dakota law displayed through the business practices of AirMedCare Network will not be tolerated," Godfread said in a statement. "Since this issue has come to my attention, I have given them every opportunity to correct this malpractice. They have been informed that they are breaking the law and yet they've responded by essentially stating that North Dakota law isn't valid."
That gave North Dakota "no other choice but to take action against them," he said.
AirMedCare Network's air ambulance services include Guardian Flight and Valley Med Flight. The company has "knowingly" sold air ambulance subscriptions involving services or billing for services and used Facebook ads for air ambulance subscription services, North Dakota insurance regulators contend.
Valley Med Flight, a Guardian Flight subsidiary based in Grand Forks, has also sold air ambulance subscriptions with a website directing consumers to a link to the AirMedCare Network air ambulance subscription service application, regulators allege.
North Dakota bans the sale of air ambulance subscription plans "because they have been shown to be predatory," the state's announcement of its action said.
Guardian Flight participates as an in-network provider with Blue Cross Blue Shield of North Dakota, meaning that the subscriptions are worthless for those who are covered by Blue Cross Blue Shield, according to the state insurance department.
The North Dakota Legislature passed a bill in 2017 regulating how insurance companies pay for air ambulance services. The law prohibited what are called "balance bills" from air ambulances, a practice that can leave consumers with staggering bills for out-of-network air ambulance service.
That provision was struck down by a federal judge in a case brought by Valley Med Flight, but the judge left standing a prohibition against selling air ambulance subscriptions.
A tally of consumer complaints kept by Godfread's office through April 2018 of almost 50 cases totaled $1.8 million, with an average bill remaining for the patient of more than $63,000. Bills ranged from $27,000 for a flight from Dickinson to Bismarck to $533,850 for a charter flight from Florida to Fargo.
“It’s a life-changing sum,” Godfread previously said. “It can be devastating for consumers. These companies are very aggressive with their collections.”
AirMedCare has been aggressive in selling the illegal subscriptions, Godfread said.
Consumers who bought a subscription after Aug. 1, 2017, are encouraged to contact the North Dakota Insurance Department by calling 701-328-2440 or emailing email@example.com.
Asked about the cease-and-desist order, AirMedCare said in a statement that it's "in compliance with North Dakota’s regulation prohibiting air ambulance memberships, even though we disagree with it. We do not conduct any targeted online or direct mail marketing to North Dakota residents. The legality of the North Dakota regulations remains the subject of pending federal litigation."
The company added:
"Despite the 2017 prohibition on memberships, many of our North Dakota members elected to keep their memberships, and many continue to renew. That’s because there is a value to having a membership even if you are covered by an in-network insurance provider. For instance, if a member has an insurance plan with high deductibles or co-pays and one of our air ambulances transports them, that member will have no liability for those deductibles or co-pays. If a member is covered by Medicare, our membership will cover the 20% co-pay. In addition, if a member has no insurance and is transported by one of our air ambulances, that member will have zero out-of-pocket costs for the transport. Finally, members may live in North Dakota and travel to other states where we have broader coverage. For example, since 2017, we have had 25 members with North Dakota addresses transported by one of our affiliated providers, 11 of which had Medicare coverage, 2 of which were uninsured and 2 of which were picked up for transport outside the state of North Dakota. Having a membership saved those members over $200,000 collectively on their transports.
"Today, we have fewer than 150 active North Dakota-based members. We are unaware of any of our members complaining to the North Dakota Department of Insurance. If any of them would like a refund, we will gladly provide one as we work through this situation with the state of North Dakota. Here is where they can contact us for a refund: 1.800.793.0010."