A complex legal battle has been brewing between a popular medevac insurance provider and the state’s largest medevac company for the past year. While Guardian Flight won’t talk about the case, the insurer, Apollo MT, says it can’t afford to keep quiet.
Apollo MT took an unusual step this summer to tell its customers just how much money this private dispute could cost them. In June, some 2,400 Unalaska residents with Apollo MT insurance got a letter in their mailboxes. The letter was from the insurer, and it asked customers to, “please request all other carriers prior to Guardian Flight being utilized.”
Guardian Flight is one of three medevac providers serving Unalaska, but it’s the only one with a dedicated base on the island. Guardian has always been the preferred provider for Apollo insurance customers. But starting next summer, that could change.
Eric Stirling is Apollo MT’s medical director. He says Guardian Flight offers excellent care, but it’s become too expensive over time.
“Their rates are substantially above Medicare or Medicaid, which is understandable,” he says. “They are above other providers, as well.”
Stirling says Apollo MT doesn’t want to increase the cost of its insurance policies on account of Guardian, so it’s going to pay Guardian less for their medevacs — which means customers may be forced to pay more.
Right now, Apollo MT’s customers pay nothing out of pocket. But according to the letter they sent out, starting in May 2013, Apollo’s reimbursement rates for Guardian Flight would drop to 80% of what Medicare usually pays for services. That would leave a customer with at least $3,000 in bills for a simple Guardian Flight to Anchorage — and the costs only go up from there.
Guardian Flight isn’t happy that Apollo MT sent out this letter while the companies are supposed to be hammering out a new contract. Stirling, from the insurer, says he understands why Guardian might be upset about the letter. But he thinks it was necessary to tell customers how their benefits could change next year.
“Obviously that’s caused a fair amount of reaction at Guardian Flight,” Stirling says. “We say we can’t not tell our beneficiaries or our members that. To us, that wouldn’t be open or transparent.”
Shanon Pollock is a vice president at the company that owns Guardian Flight. Pollock declined to be interviewed, but he did issue a brief statement about the ongoing dispute with Apollo MT.
He said, “This situation should not concern any potential patient as it is simple negotiation and negotiation tactics between two organizations.”
But the negotiations aren’t so simple. On July 17, Guardian Flight sued Apollo MT for defamation in response to the letter. That’s just the latest in a string of legal dustups between these two companies. Guardian Flight first sued Apollo MT about a year ago for breach of contract, and Apollo MT countersued, alleging that the medevac company wasn’t honoring the contract either.
Stirling says the current contract negotiations are separate from the court case. But it’s clear that the lawsuits have cast a pall on their business with each other.
“There is no negotiation right now,” Stirling says.
If the companies can’t get back to the table, Apollo MT will start using the reimbursement plan laid out in its letter. And in August 2013, Guardian and Apollo’s lawsuit will go to trial. No matter what, Guardian Flight will still provide medevacs to Apollo MT customers if they need them — but it will be up to patients to negotiate the new out-of-pocket bills with the medevac company.