A lot is at stake since the costs of air ambulance bills can be as high as $50,000, according to a GAO report published July 2017. (Photo: Shutterstock)

Although air ambulances save lives, the issue of whether state laws establishing air ambulance reimbursement rates are preempted by the federal Airline Deregulation Act of 1978 (ADA) continues to be heavily litigated in federal and state courts across the country.

A lot is at stake since the costs of air ambulance bills can be as high as $50,000, according to a GAO report published July 2017.  The Association of Air Medical Services estimates that more than 550,000 patients in the U.S. use air ambulance services every year. According to the Insurance Council of Texas, the Texas Division of Workers' Compensation has more than 1,000 air ambulance disputes pending but has abated any further decisions pending the outcome of litigation in federal and state courts. The aggregated amount in dispute exceeds $35 million.

Disputes regarding air ambulance reimbursement occur in workers' compensation in part because many states base their workers' compensation fee schedules on Medicare reimbursement schedules and methodology. Air ambulance providers accept the reimbursement rates in the Medicare ambulance service fee schedule for Medicare and Medicaid patients. The federal Airline Deregulation Act of 1978 (ADA), however, removed any government controls of pricing and expressly prohibits states from enacting or enforcing "any law, rules, regulation, standard or other provision having the force and effect of law related to a price, route, or service of an air carrier."

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