Federal appeals court rejects cap on air ambulance fees
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A federal appeals court ruled Wednesday that U.S. law bars a Texas price cap on air ambulance fees related to the treatment of injured workers, disagreeing with the Texas Supreme Court’s ruling on the issue.
In Air Evac EMS Inc. v. State of Texas, Department of Insurance, the U.S. 5th Circuit Court of Appeals in New Orleans ruled that the U.S. Airline Deregulation Act, which bars states from regulating air carrier prices, preempts state price caps on air ambulance reimbursements.
“We do not regard this as a close call — the text of the ADA plainly governs this case,” the court said in its ruling.
State officials and eight workers comp insurers in the case had argued that the Texas Workers’ Compensation Act, which regulates prices that insurers must pay for medical services, including air ambulance fees, allowed for price caps.
Affirming a West Texas district court ruling, the 5th Circuit panel ruled among other things that Air Evac EMS clearly is an “air carrier” under the text of the Airline Deregulation Act and, therefore, the federal law should apply.
Air ambulance costs have escalated in recent years and several cases centering on regulation of the providers’ fees have been heard in state and federal courts. In June 2020, the Texas Supreme Court dismissed an air ambulance company’s argument that the state could not regulate its fees. The U.S. Supreme Court declined to take the case on appeal.
