In a case stemming from a child getting rushed to a hospital after a traffic accident, a federal appeals court Tuesday backed an air-ambulance firm in a dispute about whether the amount paid for helicopter services should be limited by Florida’s no-fault auto insurance law.
A panel of the 11th U.S. Circuit Court of Appeals ruled that the air-ambulance firm, Air Methods Corp., should be able to bill the father of accident victim Lemar Bailey for costs that exceeded limits in the state’s no-fault system.
The ruling, which upheld a lower-court decision, said a federal airline deregulation law bars states from restricting prices charged by air carriers. The air-ambulance firm is considered an air carrier under federal law.
Florida’s no-fault system requires motorists to carry $10,000 in personal-injury protection, or PIP, coverage to help pay for medical expenses after accidents. As part of the system, medical costs were billed in the Bailey case under a schedule of fees. In such circumstances, medical providers typically are prevented from billing insurance policyholders for excess amounts --- an issue known in the insurance and health-care worlds as “balance billing.”
The appeals court Tuesday said the Bailey case “squeezes down into the question whether the balance billing provision, which reduces as a matter of law the contract price of medical services rendered to PIP-insured patients, relates to the prices an air carrier can charge for its services. We are without doubt on this front. The balance billing provision … has a significant effect on air carrier prices.”
“Florida law requires an emergency ambulance provider to transport individuals in need of immediate medical attention,” said the 28-page ruling, written by appeals-court Judge Gerald Tjoflat and joined by judges Julie Carnes and Michael Melloy. “In return for this service, Florida law gives such providers a legal entitlement to a reasonable fee. Through the balance billing provision, Bailey has attempted to reduce the contract price from a reasonable fee to an amount specified in a fee schedule, all because of his privately negotiated arrangements with an automobile insurance company. The ambulance provider has no notice of such arrangements prior to rendering service. It could not deny service even if it did. In this case, however, the ambulance provider happens to be an air carrier under federal law. The state-imposed restriction on price thus cannot be enforced.”
The dispute stems from a March 2013 accident in which Lemar Bailey was ejected from a vehicle in Martin County, according court records. He was flown by helicopter to St. Mary’s Hospital in West Palm Beach and died soon after arrival.
Air Methods Corp., which operated the air ambulance from 2:30 p.m. to 4:04 p.m., billed $27,975 for its services, Tuesday’s ruling said. The child’s father, Lenworth Bailey, was insured by State Farm Mutual Automobile Insurance Co., which paid $6,911 under the fee schedule. Bailey then submitted the bill to his health insurer, Aetna Life Insurance Co., which paid another $3,681.
That left a remaining balance of nearly $17,400, which Bailey did not pay. He filed a potential class-action lawsuit alleging that Air Methods Corp. was trying to improperly collect amounts in excess of the fee schedule, the ruling said.
But U.S. District Judge William Zloch in September 2015 ruled in favor of the air-ambulance firm, which led Bailey to take the case to the Atlanta-based appeals court.
In a brief filed in November 2015, Bailey’s attorneys accused the air-ambulance company of “serial violations” of the PIP law.
“The allowed reimbursement amount for emergency transport service is set forth with particularity in the PIP statute,” the brief said. “The PIP statute authorizes insurers to limit payment in accordance with the fee schedule set forth therein. Once a PIP insurer limits payment for such services in accordance with the fee schedule, an emergency transportation provider is prohibited from billing or collecting from the patient any amounts other than the PIP coinsurance amount or any amount not paid due to exhaustion of PIP benefits.”
But the appeals court Tuesday rejected such arguments, based largely on the federal law known as Airline Deregulation Act.
“An emergency provider, such as AMC (Air Methods Corp.), oftentimes has no notice of insurance arrangements before rendering service,” the ruling said. “Even if it did, Florida law prohibits an emergency medical provider from denying service due to a patient’s ability to pay. Therefore, the balance billing provision, which prohibits medical providers from charging in excess of the fee schedule amount, operates as a ‘state-imposed regulation’ on air carrier rates. The ADA (Airline Deregulation Act) preempts the application of the balance billing provision to air carriers.”