Air Ambulance Provider Files for Bankruptcy
The Company at the center of the air ambulance disputes sought bankruptcy protection on March 14, 2019. Based in Lafayette, La., PHI, Inc. filed for Chapter 11 bankruptcy in Texas, while asking the court to allow it to maintain its normal employee compensation and benefit programs and to otherwise operate its business as usual.
According to the Acadia Advocate, the filing became necessary as a result of debt the company incurred to offset losses it recently incurred in its oil and gas transport business unit.
PHI’s Lafayette headquarters is the center of its oil and gas segment, where it shuttles people and equipment to and from offshore drilling platforms in the Gulf of Mexico and foreign countries. The company’s customers include Shell, BP, ExxonMobil and ConocoPhillips, among others, according to filings with the U.S. Securities and Exchange Commission.
As of the third quarter of 2018, the company had 126 aircraft available for use in the oil and gas business.
The company has struggled in recent years since oil prices began slumping, dragging down the regional economy and the oil and gas production sector in the Gulf of Mexico.
PHI is the health care provider who has been litigating disputes over fees they sought from Texas workers’ compensation carriers in air medical business unit. According to the Acadia Advocate, PHI’s oil and gas unit had a net loss of $5.8 million in the third quarter of 2018 while the air medical unit showed a $6.2 million profit during the same period.
In Texas Mutual Ins. Co. v. PHI Air Medical, LLC, Cause No. 18-0216, the Texas Supreme Court is considering whether the Airline Deregulation Act preempts state law that imposes a fee schedule on health care that is rendered in compensable claims. The air ambulance providers argue that the fee guidelines are precluded; the insurance carriers argue that no such preclusion was intended by Congress, but if it is imposed, the ADA is “reverse-preempted” by the McCarran-Ferguson Act, which commits the regulation of the business of insurance to the States and preempts the Federal government from interfering in those regulatory systems.
The Supreme Court has not yet decided whether to grant the petition for review in this case. Briefing is not yet completed and briefing in the case may be stayed for a period of time as a result of the bankruptcy filing.
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