Northwest MedStar, the Spokane-based nonprofit air-ambulance service, is feeling the pinch between rising fuel costs and flat Medicare, Medicaid, and insurance reimbursements, its managers say.


Anthony Minge, MedStars business operations manager, says the price of aircraft fuel has jumped by $1.50 a gallon this year, which is roughly twice the price increase anticipated in MedStars 2007 budget.


Its not uncommon for the price of aircraft fuel to be 50 cents to $2 higher per gallon than automobile fuel, Minge says. Sometimes aircraft fuel is in excess of $5.50 per gallon.


Monthly fuel costs are on a pace this year to total nearly 10 percent of MedStars annual budget of about $18 million, Minge says. Just a few years ago fuel costs amounted to less than 5 percent of the budget, he says.


MedStar uses three helicopters and two airplanes based at Spokanes Felts Field for its flights and a helicopter and a plane based at the Richland Airport in the Tri-Cties area, where it also has an operation. An additional plane and a helicopter are available here for backup at either operation.


It employs about 80 employees. In addition to those people, Medstar contracts with Metro Aviation Inc., of Shreveport, La., which provides the aircraft, pilots, and flight mechanics for MedStars air ambulance service.


MedStars helicopters burn about 63 gallons of fuel on a typical one-hour flightor $315 worth when fuel costs $5 a gallon, Minge says. Its two-engine planes consume 118 gallons an houror $590 worthand their trips average about two hours in the air.


The critical-care transport service only can bill for the miles it flies with patients on board, Minge says.


If we have to transport someone from Sandpoint, we cant bill for the flight we have to take to Sandpoint from Spokane, he says.


He says that MedStar, a division of Spokane-based Inland Northwest Health Services, cant simply raise its transport rates during the year to cover rising costs.


We dont have the option of raising rates for Medicare and Medicaid patients, he says, adding that the state and federal programs set the rates that they will pay for air-ambulance services.


About half of MedStars transport patients covered by Medicare or Medicaid or are uninsured, he says.


Medicaid reimbursement rates are lower than what it costs us to operate, Minge says. While the Legislature recently boosted Medicaid reimbursements for ground transports, Minge says hes seen no change in reimbursement rates for air ambulances as a result of that legislation.


Medicare reimbursements are somewhat higher than Medicaids, and Medicare allows MedStar to billpatients for the co-pay portion of the bill.


Medicare pays a certain percentage, and the patient is responsible for the rest, he says.


MedStar covers a 47,000-square-mile area in Eastern Washington, North Idaho, and northeastern Oregon. It transports about 3,200 patients per year.


The service doesnt financially screen patients who need critical-care transport, says Eveline Saltmarsh, MedStars director. We dont select patients, Saltmarsh says. We treat everybody.


MedStars rates depend on mileage covered, the type of transport used, including surface transport, and other variables. The policies of patients who have private health insurance rarely cover their air-ambulance fees in full, Saltmarsh says.


INHS spokeswoman Nicole Stewart says most insurance policies either offer partial coverage or no coverage for air-ambulance services.


Even if you have 80 percent coverage for a $12,000 transport, the out-of-pocket cost is thousands of dollars, Stewart says.


Facing the squeeze between rising costs and stagnant reimbursements, MedStars main options are to operate as efficiently as possible and to find other sources of income, Saltmarsh says.


Efficiency measures range from meticulous accounting to turning off lights in areas of the hangar that arent being used to combining supply orders to save on shipping costs, Minge adds.


MedStars newest revenue source, launched in January, is a subscription service. For an annual fee of $59 for a family, MedStar will bill a subscribers insurance company directly, as is its normal practice, but wont bill the subscriber for the co-pay amount.


The program extends beyond MedStars geographical service area to include areas covered by nine air-ambulance services in Washington, Idaho, Oregon, Wyoming, Nevada, and California.


Medicare patients can subscribe to the service to cover potential co-pays, but MedStar cant sell subscriptions to Medicaid patients, Saltmarsh says.