CHARLESTON – A federal judge denied in part and granted in part a motion for summary judgment in a lawsuit filed by Air Evac EMS Inc. alleging reimbursement problems with an insurance company.

U.S. District Judge Thomas E. Johnston granted Air Evac’s motion for summary judgment on four counts and with respect to ADA preemption, according to the Oct. 20 memorandum opinion and order. Johnston denied the motion on one county regarding a contracts clause. He dismissed one count, which is pled in the alternative. He also denied the defendants’ motion for summary judgment and granted the defendants’ motion to replace an exhibit.

The lawsuit was filed last year against Ted Cheatham, in his capacity as director of Public Employees Insurance Agency; Mary Jane Pickens, Joshua Sword, James W. Dailey II, Troy Giatras, Elaine A. Harris, William Ihlenfeld, Brian Donat, William Milam and Michael Smith, in their capacities as members of PEIA’s Finance Board; and Michael D. Riley, in his capacity as West Virginia Insurance Commissioner in the U.S. District Court for the Southern District of West Virginia.

Air Evac EMS provides air ambulance services across the country and operates from four air bases in West Virginia. It claimed it quickly transports patients—regardless of their ability to pay—that are facing serious or life-threatening emergencies, while providing medical care during the flight.

Air Evac claims if a patient happens to have PEIA insurance or is covered under workers’ compensation, that state pulls Air Evac into a scheme and sets reimbursement rates. Air Evac has never agreed to accept as payment only those amounts set by the PEIA scheme and the West Virginia Workers’ Compensation scheme.

When Air Evac enters the PEIA or workers’ compensation system, it necessarily retains its Airline Deregulation Act protections and the state is not free to leave the ADA behind, according to the suit.

The amount Air Evac is reimbursed for its services depends largely on the patient’s insurance coverage and, such instances of underpayment strain Air Evac’s ability to provide care and transportation, as well as its ability to maintain and operate its fleet of air ambulances, according to the suit.

Air Evac is seeking  the court to issue a judgment declaring that the ADA preempts W.Va. Code’s reimbursement cap because it establishes and limits price or rate of Air Evac’s services; to issue a judgment declaring that the ADA prevents W.Va. Code’s regulation of subscription agreements because it establishes and limits the price or rate of Air Evac’s services; to issue a judgment declaring that W.Va. Code’s regulation of subscription agreements violates the Contract Clause of the U.S. Constitution because it impairs Air Evac’s rights under preexisting subscription agreements with individuals covered by PEIA insurance; to issue a judgment declaring that the ADA preempts W.Va. Code because the establish and limit the pirce or rate of Air Evac’s services; and to issue a judgment declaring that the ADA preempts W.Va. Code because they establish and limit the price or rate of Air Evac’s services.

It is also seeking for the court to permanently enjoin the defendants from enforcing the various codes.

Air Evac is represented by Carte P. Goodwin of Frost Brown Todd; and Joshua L. Fuchs and Meghan E. Greenfield of Jones Day.

The defendants are represented by Katherine A. Schultz and Sean Michael Whelan of the Office of the Attorney General; and Mary M. Downey.

U.S. District Court for the Southern District of West Virginia case number: 2:16-cv-05224

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Frost Brown Todd - Charleston Office Jones Day




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