Air Evac EMS, one of the largest independently-owned and –operated medical flight companies in the U.S., has sued Ohio-based Medical Mutual for $3.5 million. The air ambulance company accuses the insurance company of underpaying claims for medical air transport services.
Details of the Lawsuit
The lawsuit was filed in November 2015 in Cuyahoga County detailing the costs involved in providing emergency medical transport services by air. The costs detailed include $3 million helicopters outfitted with medical supplies, a 24/7 flight crew, and a 24/7 medical crew. Air Evac EMS claims that the annual maintenance costs them $200,000.
In this cost structure, the costs are amortized over number of flight expected out of each aircraft in one year. It also accounts for a significant number of patients enrolled in Medicaid and patients without any type of insurance. According to the suit, Medicaid claims don’t even cover the marginal costs of these flights as the average air ambulance transportation charge was over $20,000 in 2014.
The lawsuit also mentions that while most health plans have paid Air Evac’s charges consistently, Medical Mutual has taken a unilateral move of underpaying such claims. The insurance company has allegedly given itself a discount of up to 65% from the air ambulance company’s charges.
Medical Mutual Counters the Suit Filed by the Medical Air Transport Company
Instead of sitting quietly, Medical Mutual has filed a counter-suit against the air ambulance company. The insurance company is saying that in addition to not owing Air Evac EMS anything, the latter needs to pay back fees they have already collected. This news has added to one of the many controversies involving huge bills for medical air transport services.
The counter-suit was filed in January 2016 in U.S. District Court and argues that there is no contract between the two parties regarding the air ambulance fees for insurance members. This means that Air Evac is prohibited by federal law from collecting fees for such services. A Medical Mutual spokesman has declined to comment on the pending litigation.