Health care providers are adopting a new legal strategy in disputes over out-of-network medical bills by suing employers directly rather than limiting litigation to insurance companies. The shift came to public attention when air ambulance firm PHI Health filed suit against Joe Hancock, a Kentucky plumbing contractor, claiming his business owed nearly $27,000 in medical helicopter charges related to a former employee’s emergency flight. Hancock was among 31 companies named in that single lawsuit and stated he had no prior knowledge of the charges.
This litigation tactic represents an escalation in disputes stemming from the No Surprises Act, a 2022 law designed to protect patients from unexpected medical bills. The law established a federal arbitration process to determine payment for out-of-network emergency care for those with commercial health insurance. However, research indicates providers are winning most arbitration awards at amounts substantially higher than what in-network providers receive for identical services. Georgetown University researchers have estimated these payments have added approximately $20 billion in extra costs to the overall health care system.
PHI Health has been the most aggressive provider pursuing this strategy, filing lawsuits against hundreds of companies collectively demanding tens of millions of dollars. The company has sued major corporations including Amazon, Walmart, Eli Lilly, United Airlines, General Motors, PepsiCo, State Farm, and Toyota, as well as unions, municipalities, government agencies, school districts, universities, hospitals, and nonprofit organizations. Some lawsuits even included placeholder names such as “ABC CORP” when PHI was uncertain which entity should be named as defendant.
Legal experts contend the practice undermines stated narratives about payment disputes. Attorneys at Georgetown’s Center for Health Policy and the Law noted that while providers and air ambulance operators have portrayed insurers as villains for non-compliance, directly suing employers effectively shifts costs to workers and businesses. Officials representing some named defendants declined to comment on pending litigation, though some indicated their health insurers were managing the cases.
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