Ambulance Companies Air Medical Group Holdings, Inc. and AMR Holdco, Inc. Agree to Divest Air Ambulance Services in Hawaii as a Condition of Merger

Two providers of ambulance services have agreed to divest inter-facility air ambulance transport services in Hawaii to settle Federal Trade Commission charges that their proposed merger would likely harm competition among air ambulance transport services that transfer patients between medical facilities on different Hawaiian islands.

According to a complaint filed by the FTC, Air Medical Group and AMR Holdco are the only two providers of air ambulance services in Hawaii that transport patients between medical facilities on different islands. Patients depend on these services when they need medical or surgical care that is not available in their local communities, according to the complaint.

Without a remedy, the acquisition is likely to lessen competition and will tend to create a monopoly in the market for inter-facility air ambulance services in Hawaii, in violation of U.S. antitrust laws. The merger as proposed would also increase the likelihood that consumers, third-party payers, or government health care providers would be forced to pay higher prices or experience a degradation in service or quality, according to the complaint.

The FTC alleges that new entry into the market for inter-facility air ambulance transport services, or expansion by existing firms in adjacent businesses would not be likely, timely, and sufficient to restore the lost competition without a remedy.

Under the terms of the proposed settlement, AMR Holdco will sell its inter-facility air ambulance transport services business and supporting assets to AIRMD, LLC, which does business as LifeTeam. AMR Holdco will divest to LifeTeam the four fixed-wing aircraft it uses for inter-island air ambulance transport services, support LifeTeam’s application for a Certificate of Need with the State of Hawaii to operate ground ambulances, and offer LifeTeam the option to purchase up to four ground ambulances to support its air ambulance transport services. AMR Holdco is a wholly-owned subsidiary of Envision Healthcare. LifeTeam is a large, established company that currently operates the FAA-certified aircraft used by AMR Holdco to provide air ambulance transport in Hawaii. LifeTeam has the experience to manage AMR Holdco’s assets and operations in that state.

Further details about the consent agreement, which includes an order to maintain assets, are set forth in the analysis to aid public comment for this matter.

The FTC worked closely with the State of Hawaii Department of Attorney General in investigating this matter.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 2-0. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through April 6, 2018, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $40,654.

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