# Health Care Providers Sue Employers Over Out-of-Network Medical Bills Air ambulance firms are bypassing insurers to demand payments directly from employer health plans. - **Source:** [STAT](https://www.statnews.com) - **Published:** 2026-11-11 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/3ee0a9ae-86b4-44de-9520-2105ffe8bf85 ## Escalating Legal Tactics Air ambulance firm PHI Health has initiated a series of lawsuits targeting employers directly to recover unpaid medical bills. These legal actions represent a shift from traditional provider-insurer disputes. By naming employers as defendants, providers aim to bypass insurance companies that have delayed or refused to pay federal arbitration awards for emergency services. ## Small Business Impact Joe Hancock, a Kentucky contractor, was shocked to receive a lawsuit demanding nearly $27,000 for an employee's emergency helicopter flight. His family-run business, Whitehead-Hancock, was one of 32 companies named in the complaint. This highlights how small firms are being dragged into complex healthcare billing disputes despite having no direct role in claims. ## Corporate Targets The litigation strategy extends far beyond small businesses, encompassing major corporations like Amazon, Walmart, and Eli Lilly. PHI Health has also sued public entities, including school districts, cities, and universities. The broad scope of these filings suggests an aggressive effort to pressure organizations into settling outstanding medical claims through the legal system. ## Arbitration Process Flaws The 2022 No Surprises Act established an arbitration process to resolve out-of-network billing disputes. However, providers have won the majority of these cases, often securing awards significantly higher than in-network rates. Researchers estimate this process has added approximately $20 billion in extra costs to the broader American healthcare system since its implementation. ## Insurers and Employers Employers often rely on insurers to manage health plan assets and contest inappropriate claims. Industry groups argue that employers have a fiduciary duty to ensure funds are spent wisely. Consequently, many employers support their insurers' decisions to withhold payment when they believe arbitration awards are based on ineligible or inflated medical service claims. ## Provider Justification PHI Health CEO Scott McCarty defends the lawsuits, claiming employers are not passive bystanders in payment disputes. He argues that once employers are notified of nonpayment, they effectively endorse the insurer's refusal to honor binding federal awards. The company maintains that its actions are necessary to ensure fair compensation for delivered emergency services. ## Systemic Cost Concerns Elevance Health, the parent company of Anthem, disputes the validity of these claims, noting that PHI charges rates significantly higher than Medicare benchmarks. They argue that substantial payments have already been made for services rendered. The conflict underscores deep disagreements regarding what constitutes a fair price for emergency air ambulance transport services. ## Placeholder Defendants Some lawsuits filed by PHI Health have used placeholder names like ABC Corp when the specific plan sponsor was initially unknown. This practice indicates a broad, aggressive legal dragnet intended to identify and hold any potential party liable for unpaid bills. Such tactics have drawn criticism for creating unnecessary legal burdens for employers. ## Arbitration Revenue Stream PHI Health has reportedly told investors that winning over 75% of arbitration claims is key to maintaining profitability. This financial incentive drives the company's aggressive litigation strategy. Legal experts suggest this trend highlights a growing revenue stream for arbitrators and providers, further complicating the financial landscape for companies providing employee health coverage. ## Dismissals and Uncertainty In some instances, PHI Health has dropped lawsuits after confirming a company was fully insured rather than self-funded. Joe Hancock’s business was dismissed after attorneys verified his insurance status. It remains unclear how many other companies have been wrongfully targeted or have chosen to settle simply to avoid the high costs of litigation. ## Legislative Outlook The surge in litigation has attracted the attention of Congress, where lawmakers are considering reforms to the arbitration process. Experts note that the current system, while well-intentioned, has become broken and financially burdensome. Future policy changes will likely focus on curbing these legal escalations to protect employers and workers from rising healthcare costs. ## Sources covering this story - https://www.statnews.com/2026/11/11/no-surprises-act-phi-health-air-ambulance-sues-employers/?utm_campaign=rss — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._