LIFE FLIGHT OF PUERTO RICO INC v. TRIPLE S INC et al

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IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF PUERTO RICO
IN RE:
LIFE FLIGHT OF PUERTO RICO INC 	CASE NO. 08-08870 BKT
CHAPTER 11
Debtor(s) 	ADVERSARY NO. 09-00057
LIFE FLIGHT OF PUERTO RICO INC
Plaintiff
TRIPLE-S, INC. (SSS); MEDICAL CARD
SYSTEM INC. (MCS); INTERNATIONAL
MEDICAL CARD (IMC); PMC MEDICARE
CHOICE (PMC); MMM HEALTHCARE;
COOPERATIVA DE SEGUROS DE VIDA DE
PUERTO RICO (COSVI); ADMINISTRACION
DE COMPENSACIONES POR ACCIDENTES DE
AUTOMOVILES (ACAA); HUMANA HEALTH
PLAN PUERTO RICO, INC.; MCA MEDICARE;
ABC COMPANY; INSURANCE; and JOHN DOE FILED & ENTERED ON 12/30/2009
Defendant(s)
OPINION AND ORDER
Before 	this 	Court 	is 	Plaintiff 	Life 	Flight 	of 	Puerto 	Rico, 	Inc.’s
Memorandum 	Regarding 	“Same 	Services” 	[Dkt. 	No. 	106] 	and 	Defendant’s
Medical 	Card 	System, 	Inc. 	(“MCS”) 	Memorandum 	of 	Law 	on 	the 	issue 	of
Emergency 	Services 	[Dkt. 	No. 	102], 	and 	International 	Medical 	Card’s
(“IMC”) Memorandum of Law in Compliance with Order. 	On 8/7/2009, this
Court 	held 	a 	pre 	trial 	conference 	in 	which 	it 	was determined that the
crux 	of 	the 	adversary 	was 	the 	finding 	of 	whether 	the 	air 	ambulance
services 	provided 	by 	Plaintiff 	were 	the 	“same 	service” 	as 	the 	other
providers 	contracted 	by 	Defendants 	to 	provide 	air 	ambulance 	services.
The failure of Plaintiff to carry the burden of proof on this issue would
be fatal to the adversary case. 	The Court ordered the parties to file
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simultaneous 	briefs 	on 	this 	issue 	alone, 	and 	to 	refrain 	from 	filing
dispositive motions until this matter was determined by the Court. 	In
response 	to 	that 	order, 	two 	of 	the 	defendants 	mentioned 	above 	filed 	a
memorandum on the issue of “same service”, and five of the Defendant’s
filed summary judgment motions whose adjudication is also covered by this
Opinion and Order. Those five Defendant’s were Triple S Salud [Dkt. No.
103]; MMM Healthcare (“MMM”) and PMC Medicare Choice Inc.(“PMC”) [Dkt.
No. 108]; Cooperativa de Seguros de Vida de Puerto Rico (“COSVI”) [Dkt.
No. 116]; and Humana Health Plan Puerto Rico, Inc. (“Humana”) [Dkt. No.
121].
BACKGROUND
Life Flight was incorporated in Puerto Rico in March 2006, and was fully
functional 	by 	September 	2007. 	On 	December 	24, 	2008, 	Plaintiff 	Life
Flight 	of 	Puerto 	Rico, 	Inc. filed a petition under Chapter 11 of the
Bankruptcy Code, and as of that date has been managing its affairs and
operating its business as a debtor-in-possession. Plaintiff specializes
in 	providing 	emergency 	medical 	transportation 	by 	specially 	equipped
helicopter 	to 	patients 	in 	critical 	condition. 	The 	instant 	adversary
proceeding was filed on March 23, 2009, seeking temporary and permanent
injunctive relief against nine (9) defendants to prevent the unilateral
determination of payments by the Defendants which are considerably below
the 	fair 	market 	value 	for 	air 	medical 	ambulance 	services. 	It 	is
undisputed in the record before us that Plaintiff provided air ambulance
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services 	to 	the 	beneficiaries 	of 	all 	seven 	Defendants 	as 	an 	out 	of
network provider, that is, no direct contract existed between Plaintiff
and Defendants for the provision of services. 	In contrast, Defendant’s
state in their briefs that they each have a provider agreement with the
only other company in Puerto Rico dedicated to providing air ambulance
services around the island, Aeromed Services Corporation (“ASC”).
PLAINTIFF’S ARGUMENT
In their Memorandum, Plaintiffs concur with Defendant’s assertion that
the only other air ambulance provider in Puerto Rico is ASC and that the
quality of service provided to a patient en route to a facility, as well
as the size and accommodations on the helicopter transport are inferior
to 	what 	Plaintiff 	provides. 	Plaintiff’s 	helicopters 	are 	spacious 	and
allow for the emergency treatment of the entire patient, along with two
paramedics or nurses, and additional room for family members. In addition
that space can be converted to allow for two stretchers. The helicopters
contain an integrated incubator for premature born infants. 	The on board
staff are also licensed to administer controlled drugs during the flight
through a state licensing program. An additional license issued by the
United 	States 	Department 	of 	Justice, 	Drug 	Enforcement 	Administration,
allows 	Plaintiff 	to 	keep 	in 	stock 	controlled 	drugs 	in 	compliance 	with
federal 	regulations, 	and 	allows 	the 	administration 	of 	both 	state 	and
federal controlled drugs. 	Plaintiff states that ASC helicopters have
only a rear entry access for patients which results in limited access to
the patient’s body for treatment. In sum, Plaintiff’s services are more
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comprehensive and sophisticated than any such service in Puerto Rico, and
are by no means the “same services” that ASC provides.
DEFENDANT’S ARGUMENTS AND LEGAL DISCUSSION
With 	the 	exception 	of 	MMM 	and 	PMC 	whose 	arguments 	rest on the payment
schedule 	provided 	by 	the 	Medicare 	Advantage 	Plan 	for 	the 	benefit 	of
elderly and disabled population and the Payment Guide for Out of Network
participants 	[which 	refers 	to 	the 	Ambulance 	Fee 	Schedule 	which 	is
strictly 	utilized 	for 	payment 	of 	air 	ambulance 	services], 	all 	of 	the
Defendants who briefed the issue rely on Article 8(c) of the Act. No. 194
of August 25, 2000, 24 LPRS § 3046(c), also known as the Patient’s Bill
of Rights and Responsibilities.
Article 8(c) of the Patients’ Bill of Rights provides:
All health care plans in Puerto Rico shall provide emergency service
benefits 	with no waiting period. The previous authorization of the
insurer 	shall 	not 	be 	required 	when 	providing 	these 	emergency
services; furthermore, these services shall be provided regardless
of 	whether 	the 	provider 	of 	such 	emergency 	services 	is 	a
participating 	provider. 	In 	the 	event 	that 	a 	patient 	is 	provided
services by a provider not contracted by the insurer, the patient
shall not be held liable for the payment of services in an amount
exceeding 	the 	amount 	applicable 	if 	the 	patient 	had 	received such
services 	from 	a 	provider 	contracted 	by 	the 	insurer. 	The 	insurer
shall 	compensate 	the 	provider 	offering 	the 	services, 	and 	the
provider shall be under the obligation to accept said compensation,
for 	an 	amount 	not 	to 	be 	less 	than 	the 	agreed 	with 	the 	providers
contracted by the insurer to offer the very same services. Moreover,
under these circumstances, such emergency services shall be provided
regardless of the conditions set forth by the corresponding health
care plan. 24 P.R. Laws Ann. § 3046(c). (emphasis added)
The Office of the Patient’s Advocate, an administrative agency created
through designation by the Puerto Rico Health Department reiterates the
provisions set forth in the Patients’ Bill of Rights. As such, Section
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12.1(A)(4) of Regulation 7617, Regulation to Implement the Provisions of
Law 	No. 	194 	of 	August 	25, 	2000, 	as 	amended, 	“The 	Bill 	of 	Rights 	and
Responsibilities of the Patient of Puerto Rico”, states that an insurance
company 	will 	be 	responsible 	for 	paying 	a 	non-contracted 	provider 	for
emergency medical services rendered in an amount which is to be no less
than what it pays its contracted provider. More importantly, Regulation
7617 imposes on non-providers the obligation to accept such payment. 	It
is clear, and this Court agrees, that there are no existing state legal
requirements for any of the Defendant’s to have paid Plaintiff, a non-
contracted provider, any other amount other than what the defendant was
paying ACS, which was a contracted provider for the Defendants. 	State
law 	has 	created 	a 	mechanism 	under 	which 	payment 	for 	non 	contracted
services are to be made without distinction as to the equipment utilized
to provide such services.
To bolster the argument that all air ambulance service is considered the
“same”, Defendant’s cite Regulation no. 6737 (Regulation for Ambulance
Services 	in 	Puerto 	Rico) 	enacted 	by 	the 	Puerto 	Rico 	Public 	Service
Commission. 	The Public Service Commission regulates ambulance services
in Puerto Rico and only identifies one category of air ambulance service
(Category 	IV), 	making 	no 	distinction 	between 	different 	types 	of 	air
ambulances. 	It 	is 	important 	to 	note 	that 	for 	ambulances 	that 	provide
land 	transportation 	three 	distinct 	categories 	exist 	depending 	on 	the
level of care available in each.
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CONCLUSION:
Based 	upon 	the 	foregoing, 	this 	Court 	determines 	that 	the 	qualitative
distinction between air ambulance services sought by Plaintiff does not
exist 	under 	the 	local 	applicable 	laws 	and 	regulations. 	In 	accordance
with this opinion, the adversary proceeding is DISMISSED with prejudice
for failure to state a claim upon which relief can be granted.
SO ORDERED.
San Juan, Puerto Rico, this 30 day of December, 2009.
Brian K. Tester
U.S. Bankruptcy Judge
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