United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER DISMISSING COMPLAINT AND
COUNTERCLAIM WITHOUT PREJUDICE FOR LACK OF SUBJECT MATTER
DEFENDANT-COUNTERCLAIMANTS' MOTION FOR JUDGMENT ON THE
PLEADINGS (Doc. No. 20) (Motion), Defendants the New Mexico
Officer of Superintendent of Insurance (OSI) and John G.
Franchini (Superintendent) (together the OSI Defendants) ask the
Court to dismiss Plaintiff PHI Air Medical, LLC's
(PHI's) claims for declaratory judgment and injunction as
set forth in the COMPLAINT (Doc. No. 1) (Complaint). The OSI
Defendants ask the Court to grant declaratory judgment in
their favor as requested in the ANSWER TO COMPLAINT [Doc. 1]
AND COUNTERCLAIM FOR DECLARATORY JUDGMENT (Doc. No. 10)
(Counterclaim). The Motion is fully briefed. See
PHI's RESPONSE TO MOTION FOR JUDGMENT ON THE PLEADINGS
(Doc. No. 28) (Response); and REPLY IN SUPPORT OF 
DEFENDANTS-COUNTERCLAIMANTS' MOTION FOR JUDGMENT ON THE
PLEADINGS (Doc. No. 29) (Reply).
Complaint, PHI asks the Court to enter declaratory judgment
that under the Airline Deregulation Act (ADA), 49 U.S.C.
§ 41713(b)(1), the New Mexico insurance laws prohibiting
the balance billing of air ambulance patients are preempted
and unenforceable. PHI also asks the Court to enjoin the OSI
Defendants from enforcing New Mexico insurance laws against
PHI and other air ambulance providers. (Compl. at p.11.)
Counterclaim, the OSI Defendants allege that under the
McCarran-Ferguson Act, 15 U.S.C. § 1012(b) (MFA), New
Mexico insurance laws prohibiting balance billing of patients
covered by managed health care plans remain valid because the
state laws were enacted for the purpose of regulating the
“business of insurance.” Id.
the Court lacks subject matter jurisdiction over the claims
in the Complaint and the Counterclaim, the Court will dismiss
the Complaint and the Counterclaim without prejudice.
an air ambulance company registered in Louisiana and
headquartered in Phoenix, Arizona. (Compl. ¶ 14.) PHI is
certified as a Part 135 Air Carrier by the Federal Aviation
Administration. (Id. ¶ 1, Exs. A & B.) PHI
is licensed by the New Mexico Department of Health to provide
air ambulance services to New Mexico residents from bases in
Albuquerque, Socorro, and Grants, New Mexico. (Id.)
transported from Grants, N.M. to Albuquerque, N.M.
April 11, 2016, PHI provided emergency air transportation to
R.W., a stroke patient, from Grants, New Mexico to
Presbyterian Hospital in Albuquerque, New Mexico.
(Id. ¶ 27.) R.W. was covered by a Group Care
Connect Gold HMO plan (R.W.'s Plan) issued by New Mexico
Health Connections (NMHC). (Id. ¶ 28.) On May
3, 2016, PHI submitted an invoice in the amount of $46,
620.00 to NMHC for the transportation services.
(Id.) The invoiced amount consisted of a base rate
of $25, 678.00 plus $283.00 per loaded mile for the 74-mile
trip. (Id. ¶ 29.) PHI was an out-of-network
provider under R.W.'s Plan. (Id. Ex. C.)
R.W.'s Plan provided that if a member requires emergency
services from an out-of-network provider, NMHC will cover
those services at the in-network benefit level.
(Id.) Hence, R.W.'s Plan covered out-of-network
services up to the “usual, customary, and reasonable
amount” as determined by NMHC. (Id.; Compl.
Ex. C at 2.) Under R.W.'s Plan, R.W. is required to pay a
$100 co-pay to NMHC for PHI's services, and R.W. made
that co-payment. (Id.) NMHC paid PHI $15, 658.86,
using a base rate of $13, 808.86 plus $25.00 per loaded mile,
which is its usual, customary, and reasonable rate for
helicopter transport. (Id. ¶ 30; Ex.
The unpaid balance of PHI's invoice is $30, 961.14.
(Id. Ex. C.)
Internal Review with NMHC.
using NMHC's internal review process, appealed the
deficient reimbursement. (Id. ¶ 31.) NMHC
denied PHI's request for additional reimbursement.
(Id.) PHI then billed R.W. for the unpaid balance.
External Review with the OSI.
January 25, 2017, R.W. filed an external review request with
the OSI under 22.214.171.124 NMAC. [R.W.] v. NMHC, OSI
File No. 17-0086-EXTR-ADMIN. (Id. ¶ 32.) R.W.
disputed the decision by NMHC to partially deny coverage for
“emergency air transport services supplied by
[PHI].” (Compl. Ex. C.) PHI was not a party to the
external review proceeding. The OSI issued an ORDER GRANTING
REQUEST FOR EXTERNAL REVIEW (Compl. Ex. C) (R.W.'s
Order). In R.W.'s Order, the OSI determined that
“[t]he New Mexico Patient Protection Act requires that
managed health care plans shall provide reasonable access to
health care services including access to emergency care that
is immediately available without prior authorization at no
additional cost to the patient. (Id. ¶ 17,
citing NMSA 1978 § 59A-57-4(B)(3)(d)). Section
B. The regulations adopted by the department [OSI] to protect
patient rights shall provide at a minimum that
(3) in providing reasonable accessible health care services
that are available in a timely manner, a managed health care
plan shall ensure that …
(d) emergency care is immediately available without prior
authorization requirements, and appropriate out-of-network
care is ...