Air Ambulance Operators Granted Summary Judgment On ADA Preemption Grounds

Judith R. "Judy" Nemsick is a Partner in our New York office

The U.S. District Court for the Southern District of Florida recently issued a significant preemption decision in Bailey v. Rocky Mountain Holdings, LLC,1 a putative class action lawsuit in which the plaintiff sought declaratory and injunctive relief and damages based on allegations that air ambulance service providers' billing and collection practices violate various Florida laws. The preemption ruling signals a complete victory for the defendants, coming on the heels of the court's decision denying the plaintiff's motion for class certification.2

The plaintiff contended that the defendants' invoices for air ambulance services violated Florida's Personal Injury Protection (PIP) Statute,3 Deceptive and Unfair Trade Practices Act (FDUPTA),4 and Consumer Collection Practices Act (FCCPA)5 on the basis that defendants were statutorily prohibited from seeking to collect amounts in excess of those permitted by statute from the individuals transported by air ambulance.

Florida's PIP Statute requires motor vehicle insurance policies to include personal injury protection (PIP coverage) of at least $10,000 to cover medical bills arising from injuries sustained by a driver or passenger in a motor vehicle accident.6 Under the PIP statute, an emergency care provider "may charge the insurer and injured party only a reasonable amount," which, for emergency air transport, is limited to 200 percent of Medicare rates.7 The insurer may further limit coverage to 80 percent of this amount. The statute further states that the provider "may not bill or attempt to collect from the insured any amount in excess of such limits, except for amounts that are not covered by the insured's personal injury protection coverage due to the ... maximum policy limits."8 The parties disputed the interpretation of this exception and whether it permits the provider to bill the insured for amounts not covered by PIP coverage.

In the instant case, the charges for the defendants' helicopter transport and emergency care services had exceeded the standard PIP policy limits of $10,000. The defendants had invoiced the plaintiff and his motor vehicle and health insurers for the total amount of its emergency transport services. The motor vehicle insurer paid according to the PIP statute and the health insurer paid a lesser amount. The efendants thereafter billed the patient for the outstanding balance, which the plaintiff...