The Supreme Court of the United States announced on April 26 that it will let stand a 2020 decision by the Supreme Court of Texas that limits workers’ compensation air ambulance payments to what is “fair and reasonable.”
Texas Mutual has been opposing the drastic increase in air ambulance prices since 2012 when large private equity companies that had acquired air ambulance operations began increasing their billed charges dramatically. At the same time, these companies argued in courts in Texas and around the nation that federal law requires state-regulated workers’ compensation insurers to pay any price they demand. Texas Mutual, the Attorney General of the State of Texas and other insurers disagreed and fought back.
Last year, in a strongly worded opinion, the highest court of Texas held that PHI Air Medical may receive fair and reasonable payments in the system, not whatever price it unilaterally chooses to charge. The average billed charge today exceeds $50,000 for a single transport.
The Supreme Court of Texas also emphasized that if PHI Air Medical were right about their federal law argument, then it would be “substantially worse off” because insurers “would no longer have any obligation to reimburse at all.” Texas workers’ compensation law forbids medical providers from billing injured workers for anything.
PHI Air Medical, not content with fair and reasonable payments, petitioned the U.S. Supreme Court to reverse the decision made by the Texas Supreme Court. After reviewing the arguments filed by both sides, the U.S. Supreme Court declined to review the Texas holding, assuring that the workers’ compensation system remains protected from this unwarranted expense.
“The issue has now been fully and fairly litigated,” said Mary Nichols, senior vice president and general counsel for Texas Mutual. “Without regulation, air ambulances would drain tens of millions of dollars from the workers’ comp system and ultimately from Texas employers and injured workers. These rulings affirm the role of the states in regulating their own workers’ compensation systems, as a matter of federalism and sound regulatory policy.”