Saturday, May 19, 2018
After Air Ambulance Preemption II: No, General Health Insurance Won’t Pick Up the Tab (and a Couple of Additional Points)
As I mentioned in my last post (immediately preceding this post), Wyoming is arguing, in EagleMed, that if the state’s workers’ compensation division fails to pick up some, or all, of the expense of air ambulance transportation, injured workers could submit bills for the balance to their general health insurance carriers. That contention is called into question by the facts of Bailey v. Rocky Mountain Holdings, a case recently decided by the 11th Circuit. In Bailey – which was not a workers’ compensation case—a child was airlifted to a West Palm Beach hospital following an automobile accident. The child, who later died, was covered by his parent’s automobile accident policy. Under Florida law, one of the ways the schedule for coverage limits could be established was as a percentage of Medicare reimbursement limits. To keep the facts as simple as possible, suffice it to say that what the policy would pay was far less than what the air ambulance provider billed. Like the Wyoming situation, a provision of state law stated that, if more was due under the bill than was provided by the schedule, the air ambulance carrier could not bill the victim directly. Somewhat different than the Wyoming case, the carrier had gone ahead and billed the family of the deceased victim anyway, prompting a class-action suit centered, under a variety of counts, on a theory of deceptive or unfair/trade and collection practices. The actual holding of Bailey is that these state law actions are preempted by the Airline Deregulation Act.
I write specifically to point out that the parent of the deceased accident victim in Bailey did submit the air ambulance bill to both his automobile insurance carrier, State Farm (under a PIP policy), and to his general health insurance carrier, Aetna. The result? The total charges were $27,975.90. State Farm paid $6911.54. Aetna paid $3681.60. The insured did not pay the balance of $17,382.76 and, because the average American does not even have enough in savings to cover a $1000 emergency, this is hardly surprising.
Thus, Wyoming’s argument that sticking the injured worker with the large air ambulance bill will “work” because someone else will pick it up strikes me as implausible. I also wonder what the end game of the air ambulance companies could possibly be. Just because state regulators can’t disrupt this flavor of monopoly does not mean that the road, in the end, will lead elsewhere than to the personal bankruptcies of some very vulnerable people.
In my next post, I’ll explain why states and plaintiffs are not prevailing (and won’t prevail) on McCarron-Ferguson-based anti-preemption arguments.
Michael C. Duff