Bankrupt copter firm’s plan challenged by care-bill suers
The bankruptcy of helicopter operator Petroleum Helicopters International Inc. has transported the contentious issue of surprise health care bills to the steps of federal court.
Today, Judge Harlin Dewayne Hale in Dallas will weigh objections to the company’s plan to exit Chapter 11 protection. Among them is a challenge by a group of consumers suing the company’s air ambulance division over its billing practices. If the lawsuit is successful, then the bankruptcy plan won’t work, the consumers said in court papers.
The objection highlights
the mounting backlash over surprise billing — when patients are unexpectedly billed huge amounts for care not covered by insurance.
Surprise billing is common for emergency-services scenarios, such as ground ambulance rides, or for anesthesiology — situations in which consumers don’t have much ability to haggle over prices because they are injured or unconscious.
The issue has already reached the other branches of government. Legislation to curb the practice has received bipartisan support in Congress, and President Donald Trump earlier this year called for an end to surprise billing.
“This is kind of the one clear area of agreement between the two parties,” said Loren Adler, associate director at The University of Southern California Brookings Schaeffer Initiative for Health Policy. “There is a sort of fundamental market failure.”
Lafayette, La.-based Petroleum Helicopters said in court papers that no credible allegation has been made that it owes the consumers money. Instead, Petroleum Helicopters said, the consumers owe the company. The patients “simply complain that they were charged too much” and rely on mischaracterized testimony to make their point, the company said. Petroleum Helicopters wants Hale to overrule the objection.
A representative for the company did not immediately comment.
Petroleum Helicopters makes more than half of its money shuttling crews to offshore oil platforms in the Gulf of Mexico and other locations, but it also offers emergency medical transportation.
Consumers allege the company’s air-ambulance division didn’t disclose prices before flying them to hospitals, then stuck them with crushing bills, according to a classaction suit in Arizona.
The lead plaintiff in the lawsuit, Christina Wray, said that in 2015, she was charged more than $57,000 for a flight from Taos, N.M., to Albuquerque, N.M., after she and her unborn child were exposed to carbon monoxide. Her insurance covered only about $5,000.
Petroleum Helicopters offered to reduce the amount to $36,551.68 if the payment were made within 30 days, and Wray gave a counteroffer for a total payment of $12,000. After a few extensions, the two parties didn’t agree on a reduced price and the company reinstated the full bill.
The patients want the Arizona court to weigh in on their legal obligation, if any, to pay money billed by the company.
Petroleum Helicopters’ current billing practices are baked into future revenue assumptions in its bankruptcy plan, and a successful lawsuit could destroy those underpinnings, the consumers say in their federal court objection.
What’s more, not everyone who was potentially overcharged was notified of the bankruptcy, the consumers’ objection said. The consumers said that confirming the bankruptcy plan could wipe out their own claims against the company if they win the class-action suit.
“Debtors purposefully chose not to give notice to a huge group — a group that they will seek to overcharge in the future to fund their plan,” attorneys for Wray and others wrote in the objection. “A deliberate choice to deny notice to a large, well-known group with ongoing disputed claims should preclude approval of the plan.”
Petroleum Helicopters isn’t required to notify all of its airambulance customers of its bankruptcy, even in light of potential future claims, attorneys for the company wrote in their reply. The company said it notified the attorneys for the consumers bringing the suit.
Consumers aren’t the only ones opposing the plan. The Securities and Exchange Commission also wants to block it, saying in court papers that the plan would wrongly protect third parties from future legal action. The U.S. Trustee — the federal bankruptcy watchdog — objects on similar grounds.
Objections to third-party releases are common in large Chapter 11 cases, though, and they rarely stop the plans’ confirmation, Bloomberg Intelligence analyst Phil Brendel said in an interview.
Hale has presided over the bankruptcy case since it was filed in March. Its twists and turns have included dissent from creditors, mediation to resolve that friction and the resignation of longtime Petroleum Helicopters Chief Executive Officer Al A. Gonsoulin, who agreed to retire.