The US Supreme Court has announced 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.”
Workers’ compensation insurer Texas Mutual has opposed the large spike in air ambulance prices since 2012, when large private equity companies that had acquired air ambulance operations began hiking their charges dramatically. At the same time, the companies argued in court that a federal law required state-regulated workers’ compensation insurers to pay any price they demanded. The Texas attorney general, Texas Mutual, and other insurers fought the air ambulance companies on the policy.
Last year, the Texas Supreme Court ruled that PHI Air Medical could receive fair and reasonable payments, not whatever price it chose to charge. The average billed charge currently exceeds $50,000 for a single air ambulance transport, Texas Mutual said.
The Texas Supreme Court also said that if PHI Air Medical were correct about the federal law, then it would be “substantially worse off” because insurers “would no longer have any obligation to reimburse at all.” Texas workers’ compensation law prohibits medical providers from billing injured workers for anything.
PHI Air Medical petitioned the US Supreme Court to reverse the Texas court’s decision. After reviewing arguments filed by both sides, the US Supreme Court declined to review the Texas ruling.
“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.”