Air Ambulance Case Lands in US Supreme Court
On December 1, 2020, the United States Supreme Court docketed an appeal by PHI Air Medical challenging the Texas Supreme Court’s ruling in the air ambulance litigation. The case involves a multi-million dollar dispute over workers’ compensation medical benefits reimbursement and pits Texas workers’ compensation carriers against air ambulance companies providing services to injured workers.
Air ambulance providers want no regulation on the amount owed for their services while comp carriers have argued the providers are subject to regulation by the Texas Department of Insurance, Division of Workers’ Compensation.
In Texas Mutual Ins. Co. v. PHI Air Medical, LLC, a divided Texas Supreme court sided with the carriers, holding that the Airline Deregulation Act “does not preempt Texas’s general standard of fair and reasonable reimbursement as applied to air ambulance services, nor does it require that Texas compel private insurers to reimburse the full charges billed for those services.”
The court reversed the judgment of the court of appeals and reinstated the trial court’s judgment, which declared that Texas law is not preempted. The case is a huge victory for Texas workers’ compensation carriers and their policyholders.
The decision reaches a different result than those reached by some state and federal courts in other jurisdictions. PHI’s Petition for Writ of Certiorari argues that the Texas decision “squarely conflicts” with decisions from the fourth, tenth and eleventh circuit courts of appeals. The air ambulance provider makes an impassioned argument in its petition:
Over the past several years, states across the country have repeatedly attempted to flout the ADA’s deregulatory command by regulating air-ambulance rates through schemes like the TWCA. Until the decision below, those efforts had been uniformly unsuccessful, which provided at least a mild deterrent to copycat efforts. See, e.g., Cheatham, 910 F.3d 751; Cox, 868 F.3d 893. The Texas Supreme Court’s decision now provides a roadmap for states and state courts to circumvent the ADA and begin regulating what Congress has deemed off-limits. This Court should grant the petition, eliminate the division among the lower courts, and restore the deregulatory environment that Congress established.
The carrier’s response is due to be filed with the Supreme Court December 31, 2020.
The air ambulance providers are represented by Paul D. Clement of the Washing DC lawfirm of Kirkland & Ellis. He is assisted by former Texas Supreme Court Justice Craig Enoch and his colleague, Amy L. Prueger.
Assistant Attorney General Lisa Bennett argued the case below on behalf of the Division of Workers’ Compensation. She was joined by Matt Baumgartner, who sought a similar result on behalf of Texas Mutual Insurance Company.
If you have questions about this litigation, please contact Steve Tipton in our office.
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