The ongoing legal battle between Health Care Service Corporation (HCSC) and air ambulance providers over unpaid medical bills has escalated, with major medical organizations and federal agencies stepping in. This lawsuit centers around the No Surprises Act, a law designed to protect patients from unexpected medical bills and to ensure that insurers cover emergency services, even when care is delivered by out-of-network providers.
The Department of Labor (DOL), the Department of Justice (DOJ), and prominent medical groups, including the American Hospital Association (AHA) and American Medical Association (AMA), have filed briefs in support of the air ambulance provider, Guardian Flight, which claims it is owed nearly $1 million by HCSC after providing emergency transportation services. The case has gained significant attention because it highlights how insurers handle reimbursements following the Independent Dispute Resolution (IDR) process established by the No Surprises Act. The law is intended to protect patients from bearing the financial burden of surprise medical bills, but providers are facing challenges in getting paid for their services.
Guardian Flight’s dispute with HCSC stems from 33 air transports for which it received no payment, despite the IDR process ruling in favor of the provider. The IDR process, which was created as a part of the No Surprises Act, is meant to facilitate fair reimbursement by having a neutral arbitrator determine a reasonable payment amount. However, HCSC has refused to pay the nearly $1 million in fees awarded by the IDR, claiming they are not required to do so under the Employee Retirement Income Security Act (ERISA) or the No Surprises Act.
In August, Julie Selesnick, a senior counsel at Berger Montague, expressed frustration with the court’s previous ruling in favor of HCSC. “Truly an awful decision,” she said in a LinkedIn post in August. “Why would an insurer ever pay an IDR award now?” Her comments reflect concerns that the ruling sets a dangerous precedent for how insurers may choose to act in future cases. Without enforcement of the IDR process, providers fear they will continue to face obstacles in receiving due payments from insurers.
On October 4, the DOL and DOJ filed an amicus brief, supporting Guardian Flight’s position and arguing that payment following the IDR process is critical to protecting patients from surprise medical bills. The agencies stated that the payments are “tantamount to mandatory plan benefits,” and as such, should be enforceable under ERISA. By refusing to honor the IDR decision, HCSC undermines the law’s intent to protect patients and providers alike.
In addition to the federal government’s involvement, leading provider organizations—the AHA, AMA, Federation of American Hospitals, and the Texas Medical Association—have also expressed their support for the air ambulance provider. These organizations have warned that failure to enforce the IDR process threatens the very existence of healthcare providers. Without consistent and timely payments, hospitals and other medical service providers may struggle to continue operations, ultimately putting patient care at risk.
The lawsuit has garnered significant attention in light of ongoing issues within the healthcare system regarding surprise billing and payment disputes between insurers and providers. The No Surprises Act was enacted to address these problems, but the implementation has proven to be challenging. According to a survey (PDF) of 48,000 physicians, conducted by Americans for Fair Health Care, 52% of the time, no payments were made following the conclusion of the IDR process. When payments were made, 49% were not delivered within the required 30-day window, and 33% of the payments were inaccurate.
The Centers for Medicare and Medicaid Services (CMS) previously noted that providers are winning (PDF) the majority of No Surprises Act arbitration cases, with a success rate of 77%. Despite this favorable outcome for providers, the struggle to receive timely payments continues to place a strain on the healthcare system. This underscores the importance of enforcement mechanisms and penalties for non-compliance.
In September, U.S. Representative Greg Murphy introduced the Enhanced Coverage of Health Coverage Act, which aims to impose penalties on health plans that fail to comply with payment requirements under the No Surprises Act. The proposed legislation is seen as a step toward holding insurers accountable and ensuring that providers are compensated fairly and promptly. Currently, penalties for non-compliance exist for healthcare providers, but the new bill would extend these penalties to health plans, addressing a key gap in the current enforcement framework.
As the case between Guardian Flight and HCSC continues to unfold, the outcome will likely have far-reaching implications for the healthcare industry. Providers argue that without stronger protections and enforcement mechanisms, they will continue to face challenges in getting paid for the critical services they provide. Meanwhile, insurers maintain that they are not legally obligated to make payments in all cases, creating an ongoing tension that the courts will need to resolve.
Ultimately, this case highlights the broader issue of surprise medical billing and the difficulties providers face in securing payment from insurers. As the federal government and major medical organizations rally in support of Guardian Flight, the outcome of this lawsuit may set a precedent for how similar cases are handled in the future. If the courts rule in favor of Guardian Flight, it could reinforce the importance of the IDR process and provide greater financial security for healthcare providers. However, if HCSC’s position is upheld, it may lead to further complications in enforcing the No Surprises Act and ensuring that patients and providers are protected from the financial consequences of surprise billing.
