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The U.S. Supreme Court on Monday denied an air ambulance company’s petition for a review of a Texas ruling that said such businesses cannot charge insurers more than what is “fair and reasonable” for emergency air transport in the state.
In June 2020, the Texas Supreme Court held in PHI Air Medical LLC v. Texas Mutual Insurance Co. that the federal Airline Deregulation Act did not preempt the Texas Workers Compensation Act’s fee schedule. In a 5-2 decision, the Texas justices upheld an administrative law judge’s decision that reimbursement for air ambulances would be set at the state fee schedule level of 125% of Medicare.
The decision, however, deviated from rulings by the Fourth, 10th and 11th Circuit Courts that held that similar state laws and fee schedules constituted impermissible rate regulation preempted by the Airline Deregulation Act.
In its petition for writ of certiorari filed in November 2020, PHI asked the U.S. Supreme Court to “definitively … clarify that the ADA precludes state efforts like Texas’” and argued that the “fair and reasonable” amount determined by the Texas fee schedule for air ambulance reimbursement is “set well below market rates for services rendered to patients covered by workers compensation insurance.”
In its reply, Texas Mutual Insurance Co. argued that PHI wanted to “compel insurers to pay whatever amount PHI decides to charge for transportation of injured workers, whether or not the amount is fair and reasonable.”
A Government Accountability Office study released in 2017 found that air ambulance companies doubled their transport fees over a five-year period, charging a median fee of $30,000 for a helicopter air ambulance transport.