The country's largest independently owned and operated air medical service has sued Medical Mutual of Ohio for $3.5 million for allegations that the insurance company has underpaid claims for emergency medical air transport services.
Medical Mutual has filed a counter-suit, claiming it owes nothing to Air Evac EMS, and in fact, the air ambulance service should pay back fees it already collected.
"Medical Mutual has engaged in a scheme to systematically and unilaterally underpay Air Evac for providing costly and highly valuable emergency air ambulance transportation to patients insured through Medical Mutual," states the suit, which was filed in Cuyahoga County in November.
The lawsuit details the costs to provide air ambulance services — $3 million helicopters, outfitting the aircraft with medical supplies, $200,000 in annual maintenance, 24/7 flight and medical crews, overhead costs. Its cost structure amortizes costs over the number of flights each aircraft is expected to make in a year, taking into account the "significant percentage" of uninsured patients or patients enrolled in Medicaid, "which does not pay enough to cover even the marginal costs associated with the flight."
The average charge for an air ambulance transportation in 2014 was more than $20,000, according to the suit.
"Most health plans have consistently paid Air Evac's charges," the lawsuit states. "To the contrary, Medical Mutual has unilaterally taken a discount of up to 65% off of Air Evac's charges," to which Air Evac never agreed.
Last month, Medical Mutual filed its counter-suit in U.S. District Court, arguing that Air Evac has no contract with Medical Mutual regarding fees for air ambulance services it provides to its insurance members and therefore federal law prohibits Air Evac from collecting fees for those services.
"Medical Mutual has never agreed to pay Air Evac's exorbitant fees," the filing states. "In fact, Medical Mutual has no agreement with Air Evac of any kind with respect to Air Evac's air ambulance services."
Medical Mutual goes further in seeking to recoup an unspecified amount of fees Air Evac has already collected.
Shortly after filing its lawsuit, Medical Mutual also filed a motion to stay the initial suit brought by Air Evac EMS pending resolution of its federal action. The request was granted earlier this month.
A spokesman for Medical Mutual declined to comment on pending litigation.
"Air ambulance service sues Medical Mutual for $3.5 million" originally appeared on the website of Crain's Cleveland Business.