According to the Association of Air Medical Services, more than a half a million individuals are transported via air ambulance services each year. The majority of these transports are via helicopter in emergency situations; the remainder are fixed-wing transports for longer distances. Air ambulance companies successfully claimed that they were exempt from state fee schedules in litigation for more than a decade.
At one time, California Administrative Director Rule 9789.70(a) regulated ambulance services fees. The ambulance fee schedule as applied to air ambulance services was challenged by those providers in California.
Ultimately, 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, and that this Act would then preempt any California law.
This more or less ended the controversy in California workers’ compensation. And decisions in other jurisdictions had a similar result until a recent Texas Supreme Court Decision.
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.
In Split June 26, 2020 Opinion, the Supreme Court of Texas Rejected the Preemption Argument in Worker’s Compensation Disputes in the case of Tex. Mut. Ins. Co. v. PHI Air Med., LLC, 610 S.W.3d 839 (Tex. 2020), cert. denied, _ S. Ct. _, 2021 WL 1602647 (Apr. 26, 2021).
However, a similar case made its way into the Federal court system in Texas, on the same issue. Air Evac EMS, Inc., is an air ambulance provider that offers medical transport services to a wide variety of patients. That includes patients who are injured at their workplace. The price that Air Evac may charge for such transportation is accordingly subject to conflicting regulatory regimes.
Two of the Fifth Circuit sister circuits have unanimously held that the ADA preempts price controls on air ambulance services set by state workers’ compensation regulations. See Air Evac EMS, Inc. v. Cheatham, 910 F.3d 751 (4th Cir. 2018); EagleMed LLC v. Cox, 868 F.3d 893 (10th Cir. 2017).
Now the Fifth Circuit Court of Appeal agreed, and reversed the Texas Supreme Court position. In Air Evac EMS, Incorporated v Texas Commissioner of Insurance (2021).
“In doing so, we agree with our sister courts of appeals, which have unanimously held that the ADA preempts state price caps on air ambulance reimbursements, and that those state price caps are not saved by the McCarran- Ferguson Act. And we disagree with the Texas Supreme Court, which has reached contrary conclusions by a divided vote.”