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More than a half a million individuals are transported via air ambulance services each year, according to the Association of Air Medical Services. The majority of these transports are via helicopter in emergency situations; the remainder are fixed-wing transports for longer distances.

While fees charged by traditional medical transport services in California workers’ compensation claims are regulated under the Official Medical Fee Schedule, air ambulance providers argue that they fall under the jurisdiction of the Airline Deregulation Act (ADA) of 1978, which prevents states from enacting or enforcing laws or regulations related to the price, route or service of an air transportation carrier.

In California workers’ compensation, the WCAB issued an en banc decision in 2013 ( Luis Enriquez (deceased) v Couto Dairy and Zenith Insurance Company ) conceding the preemption of federal law over Official Medial Fee Schedule limits if the air ambulance provider could establish that they were an “air carrier” that provides air transportation within the meaning of the Airline Deregulation Act.

Yet the litigation debate over the preemption issue continues to rage in other jurisdictions. The Texas Supreme Court just ruled that preemption does not apply in Texas.

Excessive helicopter transport bills were the crux of the lawsuit in PHI Air Medical, LLC v. Texas Mutual Insurance Company, et al. A trial court rendered judgment in favor of eight plaintiff insurers, which included Texas Mutual Insurance Company and Hartford Underwriters Insurance Company, who disagreed with PHI’s per-trip charge for medically transporting injured workers.

The Texas trial court held the insurers could not be asked to pay more than 125 percent of the Medicare amount for air ambulance transport. On Jan. 31, 2018, however, the Texas Court of Appeals remanded the case, holding that any rate provisions for air ambulance transports are preempted by the ADA.

In Split June 26, 2020 Opinion, the Supreme Court of Texas Rejected Preemption Argument in Worker’s Compensation Disputes. The Court held that the Airline Deregulation Act did not preempt state law pertaining to worker’s compensation insurance benefit payments because the law does not expressly refer to air ambulance providers, and the standard for establishing the amount of reimbursement also was not preempted.

Thus the workers’ compensation industry has not seen the final word on this issue.