BY THE COURT
Supremacy Clause of Article VI of the United States
Constitution establishes the doctrine of federal preemption.
It invalidates state laws and actions that interfere with or
are contrary to federal law.
Federal preemption is ultimately a question of congressional
intent. In determining whether federal preemption applies in
a given case, courts must first look to the language of the
federal preemption statute to determine the intent of
Congress. Because federal preemption involves an
interpretation of law, judicial review is unlimited.
Express preemption applies when Congress makes its intent
known through explicit statutory language.
United States Congress enacted the Airline Deregulation Act
in 1978 to deregulate the airline industry and encourage
efficiency, innovation, and low prices through competitive
market forces. The Airline Deregulation Act expressly
preempts state regulation related to a price, route, or
service of an air carrier.
preemption provision of the Airline Deregulation Act is to be
interpreted broadly to include enforcement actions taken by
states that have a connection with or reference to prices,
routes, or services of an air carrier. An air ambulance is an
air carrier covered by the provisions of the Airline
the intent of Congress to preempt state law is established,
courts must next look to the scope of the federal preemption.
Kansas Workers Compensation Act mandates that providers of
services and materials are bound by the fee schedule approved
by the Director of the Division of Workers Compensation.
Director of the Division of Workers Compensation generally
has the authority under K.S.A. 2017 Supp. 44-510j to resolve
disputes between a provider and a self-insured employer or an
employer's insurance carrier over a bill for services
rendered for the care and treatment of an employee.
Regarding air ambulance services, the 2012 fee schedule
provided that fees "will be limited to usual and
customary charges as per 49 U.S.C., Section 41713(b) of the
Federal Aviation Act." However, 49 U.S.C. §
41713(b) (2012) offers no guidance in determining the
"usual and customary" amount to be charged for air
ambulance services. A determination of the "usual and
customary" amount to be charged for the services
provided in the air ambulance industry falls within the type
of matters related to the price of air carriers that Congress
intended to expressly preempt.
Given the express preemption provision in the Airline
Deregulation Act, whether the Medicare fee schedule
applicable to air ambulance transport services should be
applied to non-Medicare patients receiving services from an
air ambulance provider is not a question to be answered by a
state agency or state courts.
Director of the Division of Workers Compensation has no
authority under the express preemption provision of the
Airline Deregulation Act to determine the "usual and
customary" charges air ambulance providers charge for
their services or to otherwise make decisions related to the
reasonableness of the price charged by an air ambulance
from Workers Compensation Board.
William L. Townsley, Lyndon W. Vix, and Nathaniel T. Martens,
of Fleeson, Gooing, Coulson & Kitch, L.L.C., of Wichita,
Phillip Gragson, of Henson, Hutton, Mudrick, Gragson and
Vogelsberg, LLP, of Topeka, and Joshua L. Fuchs, of Jones
Day, of Houston, Texas, for appellee.
Bruns, P.J., Hill, J., and Walker, S.J.
a consolidated appeal of four workers compensation cases
arising out of a fee dispute between EagleMed, LLC
(EagleMed)-an air ambulance service provider-and Travelers
Insurance (Travelers)-a workers compensation insurance
carrier. Although Travelers admits that it provides coverage,
it contends that the amounts charged by EagleMed for
transporting the four injured workers by air ambulance are
unreasonable. On appeal, both parties agree the federal
Airline Deregulation Act of 1978 expressly preempts actions
taken by states that have a connection to the prices charged
by air carriers-including air ambulances. However, they
disagree on the scope of the federal preemption as well as
its application in these workers compensation cases.
that preemption under the Airline Deregulation Act is
express, broad, and sweeping. We also find that Congress
intended for market forces-not state agencies-to determine
the prices charged by air carriers. Because an air ambulance
provider is an air carrier under the Act, we conclude that
federal preemption prevents the Division of Workers
Compensation from making any decisions relating to the prices
charged by such providers. Thus, we affirm in part, reverse