Air Methods, Rocky Mountain Holdings Charge ‘Excessive’ Rates for Medical Air Transport, Class Action Alleges

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action claims Air Methods Corporation and Rocky Mountain Holdings, LLC have unlawfully billed patients for emergency medical air transportation when no contract exists between the parties.

According to the 20-page lawsuit, the defendants—who provide air transportation in emergency medical situations where a healthcare provider or first responder determines that such transport is needed—are barred by federal law from charging amounts that “far exceed” what third-party health insurers determine to be the reasonable cost of their services. Patients, who at the time they are transported are unable to consent to or negotiate the terms and cost of the services, never agree to enter into any contract with the companies and, given their circumstances, are not subject to any implied contract, the case contends.

“Plaintiffs have no legal obligation to pay the Defendants, and Defendants have no legal entitlement to receive the price they charge for services, absent an express or implied-in-fact contract,” the complaint attests.

Nevertheless, Air Methods and Rocky Mountain Holdings have billed patients tens of thousands of dollars—costs the case says are never disclosed prior to medical air transport—despite admitting that the “fair charge” for such services would be, on average, around $12,000, the suit alleges. Stressed in the complaint is the fact that those who utilize Air Methods’ and Rocky Mountain’s services are unable to provide express or informed consent to such given they are frequently unconscious or otherwise experiencing a dire medical emergency.

“The patient does not, and cannot make the request for transport; has no choice in the transport provider; and, has no choice in whether to accept the transport other than to refuse necessary and urgent medical treatment,” the lawsuit reads. “The transportation is not a voluntary undertaking by Plaintiff, but rather under the influence of, and is a direct consequence of an emergency medical condition requiring immediate medical care.”

Moreover, although the defendants are well aware of the prices they intend to charge for emergency medical air transportation, the rates are not disclosed to patients prior to transport, the suit says. Importantly, the defendants’ rates do not include medical treatment but are only for transportation of the patient, and include a “base rate” and a cost for “mileage,” according to the lawsuit. Although these rates are known to the defendants, the companies have refused to publish them or otherwise disclose the costs prior to transport and maintained instead that their pricing “is some sort of trade secret,” the case says.

The reality of the situation, however, is that the defendants have unilaterally imposed excessive rates on critically injured patients who never voluntarily contracted with either entity, the lawsuit attests.

As the case tells it, the defendants have levied excessive charges against patients who have out-of-network insurance providers in order to “preserve their negotiation leverage” among in-network health insurer payors. Knowing health insurance payors will not pay the amounts they charge, the defendants negotiate network agreements with certain payors under which the payors agree to pay “far lower” negotiated amounts and Air Methods and Rocky Mountain Holdings agree not to balance bill the insured patients for any amount above the negotiated amount, the suit explains. As part of these negotiations, the defendants “use the threat of crushing medical charges” imposed on out-of-network insureds in order to leverage more favorable terms, according to the complaint. The case argues that the prices billed to out-of-network providers are not the product of any competitive marketplace given the only marketplace for the defendants’ prices is the negotiated rate between third-party payors and the defendants.

According to the lawsuit, the defendants’ rates are so exorbitant that almost no out-of-network payor will cover them in full given they “exceed an amount deemed reasonable for the services Defendants provide.” As a result, patients are billed “staggering amount[s]” that most cannot afford, the case says. The defendants then threaten patients with collection efforts to coerce them into agreeing to a payment plan while at the same time using the patients’ “economic pain” to “give themselves leverage” to increase reimbursement rates from third-party payors, the lawsuit attests.

“Defendants’ billing practices as stated are predatory, unconscionable, and intended to inflict severe economic pain on critically injured Plaintiff and their families solely for the benefit of the Defendants,” the complaint summarizes.

The plaintiff, who was transported to a hospital by the defendants after falling from a 20-foot ladder at work, says he was billed a total of $64,442.66, which included a base rate of $48,415.81 and an additional $16,026.85 for mileage. While the plaintiff’s insurer, Veterans Affairs, covered his entire $14,180.72 hospital bill, it paid no portion of his air transportation bill, the suit says, arguing that these figures “tend to indicate not that [the plaintiff’s] insurance company was unreasonable, but rather that the amount billed by Defendants was unreasonable.”

The plaintiff says he does not recall signing any documents from the defendants prior to transport, did not consent to the transport and had no opportunity to negotiate the terms given he had just experienced a traumatic injury.

The lawsuit looks to represent anyone billed by the defendants for air ambulance transportation from a location in Massachusetts.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.