Air Methods/Rocky Mountain Holdings, LLC v. State
| Decision Date | 27 November 2018 |
| Docket Number | S-18-0068,S-18-0074 |
| Citation | 2018 WY 128 |
| Parties | AIR METHODS/ROCKY MOUNTAIN HOLDINGS, LLC, Appellant (Appellee/Petitioner), v. STATE OF WYOMING ex rel. DEPARTMENT OF WORKFORCE SERVICES, WORKERS' COMPENSATION DIVISION, Appellee (Appellant/Respondent). STATE OF WYOMING ex rel. DEPARTMENT OF WORKFORCE SERVICES, WORKERS' COMPENSATION DIVISION, Appellant (Appellant/Petitioner), v. AIR METHODS/ROCKY MOUNTAIN HOLDINGS, LLC.; EAGLEMED; and MED-TRANS CORP., Appellees (Appellees/Respondents). |
| Court | Wyoming Supreme Court |
W.R.A.P. 12.09(b) Certification from the District Court of Laramie County
The Honorable Catherine R. Rogers, Judge
Representing Air Methods/Rocky Mountain Holdings, LLC:
Bradley T. Cave, P.C. of Holland & Hart LLP, Cheyenne, Wyoming; Matthew J. Smith, Christina F. Gomez, and Jessica J. Smith of Holland & Hart LLP, Denver, Colorado. Argument by Ms. Gomez.
Representing State of Wyoming ex rel. Department of Workforce Services, Workers' Compensation Division:
Peter K. Michael, Wyoming Attorney General; Daniel E. White, Deputy Attorney General; Kelly D. Mullen, Assistant Attorney General. Argument by Mr. White and Ms. Mullen.
Representing EagleMed and Med-Trans Corp.:
Richard A. Mincer and Khale J. Lenhart of Hirst Applegate, LLP, Cheyenne, Wyoming. Argument by Mr. Mincer.
Before DAVIS, C.J., and BURKE*, FOX, KAUTZ, and BOOMGAARDEN, JJ.
* Justice Burke retired from judicial office effective October 8, 2018, and, pursuant to Article 5, § 5 of the Wyoming Constitution and Wyo. Stat. Ann. § 5-1-106(f) (LexisNexis 2017), he was reassigned to act on this matter on October 9, 2018.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
[¶1] Air Methods/Rocky Mountain Holdings, LLC ("Air Methods"), EagleMed, LLC, and Med-Trans Corp. (collectively "Claimants") operate air ambulance services in Wyoming, and each separately filed claims with the Wyoming Workers' Compensation Division ("Division") for services they provided to injured workers. The Division approved the claims, but it paid only the amounts permitted by its fee schedule, which were significantly less than the amounts billed. Claimants separately appealed the Division's final determinations to the Office of Administrative Hearings ("OAH"), and the claims were consolidated for hearing.
[¶2] Following cross-motions for summary judgment, the OAH entered two orders. In its first order, the OAH granted summary judgment to Claimants and ruled that, in keeping with a federal ruling that the Airline Deregulation Act of 1978 ("ADA") preempted the Division's air ambulance fee schedule, the Division was required to pay the full amount billed by Claimants. In its second order, the OAH denied a motion by Air Methods for pre- and post-judgment interest on its claims. Both the Division and Air Methods appealed the respective adverse rulings, and the district court consolidated the appeals. We accepted certification of the consolidated appeals and now affirm both OAH orders.
[¶3] In challenging the OAH order on summary judgment, the Division presents four issues, which we condense and restate as:
[¶4] In challenging the OAH order denying its motion for pre- and post-judgment interest, Air Methods presents two issues which we restate as:
[¶5] This appeal stems from the Division's payment of charges for air ambulance services in accordance with Wyo. Stat. Ann. § 27-14-401(e), which provides that "[i]f transportation by ambulance is necessary, the division shall allow a reasonable charge for the ambulance service at a rate not in excess of the rate schedule established by the director." The material facts are not in dispute.
[¶6] Between 2012 and 2016, Claimants provided air ambulance services to numerous injured Wyoming workers covered under the Wyoming Worker's Compensation Act. Claimants submitted claims to the Division for those services, and the Division paid those claims. The Division's payments were made, however, in accordance with its statutorily-directed fee schedule and resulted in payments that were significantly less than the amounts billed. As a result, Air Methods billed a total of just under $3 million for seventy claims during the period 2013-2016, and received payments totaling about $423,000. EagleMed billed close to $527,000 for thirteen claims during the period 2013-2015, and received payments totaling about $85,000. Med-Trans billed close to $432,000 for twelve claims during the period 2012-2015, and received payments totaling about $109,000.
[¶7] Claimants submitted objections to the underpayments, with each objection requesting a hearing and asserting that the Airline Deregulation Act ("ADA") barred application of the Division fee schedule to air ambulance billings. Around the time Claimants filed a complaint in federal court challenging the Division's fee schedule under the ADA, the Division referred the objections to the OAH for hearing. As a result of the federal action, the OAH stayed its proceedings "pending an anticipated judicialadjudication of whether the Airline Deregulation Act preempts the [Division's] fee schedule."1
[¶8] On May 16, 2016, the District Court for the District of Wyoming issued a summary judgment ruling in favor of Claimants' preemption claim. EagleMed, LLC v. Wyoming ex rel. Dep't of Workforce Serv., Workers' Comp. Div., 227 F.Supp.3d 1255, 1281 (D. Wyo. 2016). The federal district court ruled:
[T]he Court concludes that the Airline Deregulation Act preempts Wyoming Statute section 27-14-401(e) and Chapter 9, Section 8 of the Rules, Regulations and Fee Schedules of the Wyoming Workers' Compensation Division to the extent the statute and regulation set compensation that air ambulances may receive for their services. The state officials are permanently enjoined from enforcing the statute and regulation against air ambulance services.
EagleMed, 227 F.Supp.3d at 1281.
[¶9] The Division appealed the district court's decision to the United States Tenth Circuit Court of Appeals, and in the interim took the position that since it was enjoined from paying air ambulance providers according to its fee schedule, it was enjoined from paying them at all for their services. On August 16, 2016, the district court responded with an order directing "that the named state officials and their employees and agents are required to compensate air ambulance entities the full amount charged for air ambulance services." The court explained (record cites omitted):
The defendants mischaracterize the effect of this Court's Order Granting Plaintiffs' Motion for Summary Judgment and Order Denying Defendants' Motion for Summary Judgment and Judgment. The defendants claim that this Court has enjoined them from paying the air ambulances any sum of money for services rendered. Such a result would reward the defendants for illegally enforcing its [sic] fee schedule for years. After rereading the Order and Judgment, it is readily apparent that the Court enjoined enforcement of the statute and regulation because the defendants were illegally regulating air ambulance rates. In fact, by violating this Court's Order and Judgment and not paying airambulances for any services, the defendants are again regulating air ambulance rates, only more severely this time around. The defendants cannot set air ambulance rates. Because the defendants cannot do so, they must pay the air ambulance services whatever they charge.
[¶10] On October 7, 2016, Air Methods filed a motion with the OAH to lift the stay of the contested case proceeding. Air Methods renewed its motion on October 20, and on December 19, 2016, the OAH entered an order lifting the stay. The parties thereafter filed cross-motions for summary judgment, and on August 10, 2016, the OAH ruled in favor of Claimants. The OAH found that § 401(e) was severable, and that, as severed, it authorized payment outside the Division's fee schedule:
[S]everability is the general rule and statutes should be found severable if the valid portions are sufficient in themselves to accomplish the purpose of the statute. [citations omitted] The general purpose of Wyoming Statute § 27-14-401(e) (LexisNexis) is to allow for the payment of ambulance services provided to injured Wyoming workers under the WC Act. The remaining valid portions of Wyoming Statute § 27-14-401(e) (LexisNexis) - "If transportation by ambulance is necessary, the division...
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...contractual agreement to the contrary. See Wyo. Stat. Ann. § 1-16-102(a) ; see also Air Methods/Rocky Mountain Holdings, LLC v. State ex rel. Dep't of Workforce Servs., Workers' Comp. Div. , 2018 WY 128, ¶¶ 65–70, 432 P.3d 476, 491–92 (Wyo. 2018) (post-judgment interest is available for jud......
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