There has been a flurry of recent activity in a case originally filed by six air ambulance companies claiming $20 million in unpaid emergency services invoices. On June 11, Aetna filed a counterclaim against REACH Air Medical Services LLC, CALSTAR Air Medical Services LLC, Guardian Flight LLC, Med-Trans Corporation, Air Evac EMS Inc., and AirMed International LLC based on alleged manipulation of the Independent Dispute Resolution (IDR) process established under the No Surprises Act (NSA). On July 2, the plaintiffs moved to dismiss the counterclaim.
Regulatory Context
The NSA, effective January 1, 2022, was enacted to curb surprise billing practices. It established a dispute resolution process for payment disputes between insurers and providers for out-of-network emergency services. The Act required air ambulance providers to file separate IDR proceedings for each line-item payment dispute, including base rate and mileage charges. This regulatory framework aimed to ensure transparency and fairness in billing practices.
Aetna’s Counterclaim
Aetna argues that the air ambulance providers have exploited this regulatory framework by continuing to submit separate IDR disputes for base rate and mileage charges even after a federal court vacated the requirement in late 2023. Aetna claims this practice increases administrative fees and burdens on payors, violating the Connecticut Unfair Trade Practices Act (CUTPA). According to Aetna, the providers’ actions are part of a broader scheme to inflate payments and drive profits.
Air Ambulance Providers’ Position
The air ambulance providers defend their billing practices by emphasizing compliance with federal regulations. They argue that separate IDR submissions are not only permissible but were initially mandated to ensure clarity and accuracy in the dispute resolution process. The providers maintain that batching disputes could obscure the distinct costs associated with each service component, potentially leading to less precise adjudications. Their approach, they assert, promotes transparency and fairness, countering Aetna’s claims of strategic profiteering.
In their motion to dismiss, the air ambulance providers contend that Aetna’s counterclaim is groundless and suffers from numerous defects. They argue that CUTPA does not apply to them, as they are not citizens of Connecticut, and the complained-of conduct did not occur there. Furthermore, they assert that the Airline Deregulation Act (ADA) preempts Aetna’s claims, as the ADA prohibits states from enacting laws related to the price, route, or service of an air carrier.
Troutman Pepper Locke will continue monitoring this litigation and providing updates.