A Victory for the Ambulance Industry - Federal Appeals Court Vacates VA Rule That Would Have Reduced Ambulance Payments.

On December 9, 2024, the United States Court of Appeals for the Federal Circuit granted, in its entirety, the petition of four ambulance service providers in two different states to vacate the Veteran Administration’s rulemaking, which would have significantly reduced ambulance service reimbursement. In a unanimous decision by a three-judge panel, the appeals court determined that the VA overstepped its statutory authority and invalidated the new regulatory change.
 
The VA’s final rule, published on February 16, 2023, established a new payment methodology for special modes of transportation, including ambulance services. Under this rule, in the absence of a contract between the VA and the provider, the VA attempted to significantly reduce the rates it currently paid to the “lesser of” the provider’s actual charge or the Medicare Fee Schedule amount for all ambulance transports - including those to and from places other than VA facilities.  If implemented, this rule would have significantly reduced payment for emergency and non-emergency ambulance services for our veterans nationwide.  
 
The Ambulance Association of Pennsylvania (AAP) and the South Dakota Ambulance Association (SDAA) jointly submitted a “friend of the court” brief in support of the ambulance services that challenged the VA’s final rule. One Texas ambulance service, MedStar Mobile Healthcare, and three Pennsylvania ambulance services, Valley Ambulance Authority, Quaker Valley Ambulance Authority, and AMED Authority, were the petitioners in this case.
 
The ambulance services and associations presented policy-based arguments on the imminent negative impact that the rule would impose on ambulance providers and contended that the rule contradicted the clear, unambiguous language of the existing statutory framework, thus exceeding the authority granted to the VA by Congress. The Court agreed.
 
“The Court’s decision marks a significant victory for ambulance providers nationwide, ensuring that they can continue to deliver vital services to our veterans, especially in our rural states, like Pennsylvania and South Dakota, where large numbers of veterans live,” said Brian Hambek, President of the SDAA. 
 
“This favorable ruling was achieved due to the effective advocacy of these ambulance services that petitioned the court, and our two state associations,” said Heather Harris, Executive Director of the AAP. “We successfully underscored the rule’s inconsistencies with existing law, its potential harm to ambulance services nationwide, and, most importantly, the negative impact that the payment reductions would have on access to needed ambulance service for our military veterans,” said Gary Watters, President of the AAP.  
 
The VA had asked in the last few weeks for the Court to delay its decision or to render the petition moot since the VA had now extended the delay to implement the rule to 2029. But the Court did not agree with the VA’s attempt to reduce payment rates by regulation, and instead issued a ruling in favor of the ambulance industry “on the merits” of the case, thus officially tossing out the VA’s impending regulatory change as unlawful. 

The attorneys of Page, Wolfberg & Wirth, LLC, prepared the friend of the court brief on behalf of the AAP and the SDAA.