AIR METHODS/ROCKY MOUNTAIN HOLDINGS, LLC, Appellant (Appellee/Petitioner),
STATE OF WYOMING ex rel. DEPARTMENT OF WORKFORCE SERVICES, WORKERS' COMPENSATION DIVISION, Appellee (Appellant/Respondent). STATE OF WYOMING ex rel. DEPARTMENT OF WORKFORCE SERVICES, WORKERS' COMPENSATION DIVISION, Appellant (Appellant/Petitioner),
AIR METHODS/ROCKY MOUNTAIN HOLDINGS, LLC.; EAGLEMED; and MED-TRANS CORP., Appellees (Appellees/Respondents).
W.R.A.P. 12.09(b) Certification from the District Court of
Laramie County The Honorable Catherine R. Rogers, Judge.
Representing Air Methods/Rocky Mountain Holdings, LLC:
Bradley T. Cave, P.C. of Holland & Hart LLP, Cheyenne,
Wyoming; Matthew J. Smith, Christina F. Gomez, and Jessica J.
Smith of Holland & Hart LLP, Denver, Colorado. Argument
by Ms. Gomez.
Representing State of Wyoming ex rel. Department of Workforce
Services, Workers' Compensation Division: Peter K.
Michael, Wyoming Attorney General; Daniel E. White, Deputy
Attorney General; Kelly D. Mullen, Assistant Attorney
General. Argument by Mr. White and Ms. Mullen.
Representing EagleMed and Med-Trans Corp.: Richard A. Mincer
and Khale J. Lenhart of Hirst Applegate, LLP, Cheyenne,
Wyoming. Argument by Mr. Mincer.
DAVIS, C.J., and BURKE [*] , FOX, KAUTZ, and BOOMGAARDEN, JJ.
Air Methods/Rocky Mountain Holdings, LLC ("Air
Methods"), EagleMed, LLC, and Med-Trans Corp.
(collectively "Claimants") operate air ambulance
services in Wyoming, and each separately filed claims with
the Wyoming Workers' Compensation Division
("Division") for services they provided to injured
workers. The Division approved the claims, but it paid only
the amounts permitted by its fee schedule, which were
significantly less than the amounts billed. Claimants
separately appealed the Division's final determinations
to the Office of Administrative Hearings ("OAH"),
and the claims were consolidated for hearing.
Following cross-motions for summary judgment, the OAH entered
two orders. In its first order, the OAH granted summary
judgment to Claimants and ruled that, in keeping with a
federal ruling that the Airline Deregulation Act of 1978
("ADA") preempted the Division's air ambulance
fee schedule, the Division was required to pay the full
amount billed by Claimants. In its second order, the OAH
denied a motion by Air Methods for pre- and post-judgment
interest on its claims. Both the Division and Air Methods
appealed the respective adverse rulings, and the district
court consolidated the appeals. We accepted certification of
the consolidated appeals and now affirm both OAH orders.
In challenging the OAH order on summary judgment, the
Division presents four issues, which we condense and restate
1. Did the United States District Court for the District of
Wyoming and the Tenth Circuit Court of Appeals err in ruling
that the Division's fee schedule was preempted by the
Airline Deregulation Act of 1978 due to a misunderstanding of
state law governing reimbursement?
2. Did the OAH err in ruling that the federally preempted
portions of Wyo. Stat. Ann. § 27-14-401(e) could be
severed from the statute and that the severed statute
remained enforceable and required the Division to pay
Claimants' air ambulance charges in full?
3. In submitting their workers' compensation claims, were
Claimants required to comply with both the workers'
compensation claims procedure and the claims procedure
established by Wyo. Stat. Ann. § 9-1-404 (requiring that
"persons having claims against the state shall document
the claim and submit it to the state auditor within one (1)
year after the claim accrues, to be audited, settled and
In challenging the OAH order denying its motion for pre- and
post-judgment interest, Air Methods presents two issues which
we restate as:
1. Did the OAH err in ruling that it lacked jurisdiction to
rule on Air Methods' interest motion because the motion
was filed after the Division filed its petition for judicial
review of the summary judgment ruling?
2. Did the OAH err in ruling that even if it had jurisdiction
to rule on the interest motion, it lacked authority to award
interest on Air Methods' claims?
This appeal stems from the Division's payment of charges
for air ambulance services in accordance with Wyo. Stat. Ann.
§ 27-14-401(e), which provides that "[i]f
transportation by ambulance is necessary, the division shall
allow a reasonable charge for the ambulance service at a rate
not in excess of the rate schedule established by the
director." The material facts are not in dispute.
Between 2012 and 2016, Claimants provided air ambulance
services to numerous injured Wyoming workers covered under
the Wyoming Worker's Compensation Act. Claimants
submitted claims to the Division for those services, and the
Division paid those claims. The Division's payments were
made, however, in accordance with its statutorily-directed
fee schedule and resulted in payments that were significantly
less than the amounts billed. As a result, Air Methods billed
a total of just under $3 million for seventy claims during
the period 2013-2016, and received payments totaling about
$423, 000. EagleMed billed close to $527, 000 for thirteen
claims during the period 2013-2015, and received payments
totaling about $85, 000. Med-Trans billed close to $432, 000
for twelve claims during the period 2012-2015, and received
payments totaling about $109, 000.
Claimants submitted objections to the underpayments, with
each objection requesting a hearing and asserting that the
Airline Deregulation Act ("ADA") barred application
of the Division fee schedule to air ambulance billings.
Around the time Claimants filed a complaint in federal court
challenging the Division's fee schedule under the ADA,
the Division referred the objections to the OAH for hearing.
As a result of the federal action, the OAH stayed its
proceedings "pending an anticipated judicial
adjudication of whether the Airline Deregulation Act preempts
the [Division's] fee schedule."
On May 16, 2016, the District Court for the District of
Wyoming issued a summary judgment ruling in favor of
Claimants' preemption claim. EagleMed, LLC v. Wyoming
ex rel. Dep't of Workforce Serv., Workers' Comp.
Div., 227 F.Supp.3d 1255, 1281 (D. Wyo. 2016). The
federal district court ruled:
[T]he Court concludes that the Airline Deregulation Act
preempts Wyoming Statute section 27-14-401(e) and Chapter 9,
Section 8 of the Rules, Regulations and Fee Schedules of the
Wyoming Workers' Compensation Division to the extent the
statute and regulation set compensation that air ambulances
may receive for their services. The state officials are
permanently enjoined from enforcing the statute and
regulation against air ambulance services.
EagleMed, 227 F.Supp.3d at 1281.
The Division appealed the district court's decision to
the United States Tenth Circuit Court of Appeals, and in the
interim took the position that since it was enjoined from
paying air ambulance providers according to its fee schedule,
it was enjoined from paying them at all for their services.
On August 16, 2016, the district court responded with an
order directing "that the named state officials and
their employees and agents are required to compensate air
ambulance entities the full amount charged for air ambulance
services." The court explained (record cites omitted):
The defendants mischaracterize the effect of this Court's
Order Granting Plaintiffs' Motion for Summary
Judgment and Order Denying Defendants' Motion for Summary
Judgment and Judgment. The defendants claim
that this Court has enjoined them from paying the air
ambulances any sum of money for services rendered. Such a
result would reward the defendants for illegally enforcing
its [sic] fee schedule for years. After rereading the
Order and Judgment, it is readily apparent
that the Court enjoined enforcement of the statute and
regulation because the defendants were illegally regulating
air ambulance rates. In fact, by violating this Court's
Order and Judgment and not paying air
ambulances for any services, the defendants are again
regulating air ambulance rates, only more severely this time
around. The defendants cannot set air ambulance rates.
Because the defendants cannot do so, they must pay the air
ambulance services whatever they charge.
On October 7, 2016, Air Methods filed a motion with the OAH
to lift the stay of the contested case proceeding. Air
Methods renewed its motion on October 20, and on December 19,
2016, the OAH entered an order lifting the stay. The parties
thereafter filed cross-motions for summary judgment, and on
August 10, 2016, the OAH ruled in favor of Claimants. The OAH
found that § 401(e) was severable, and that, as severed,
it authorized payment outside the Division's fee
[S]everability is the general rule and statutes should be
found severable if the valid portions are sufficient in
themselves to accomplish the purpose of the statute.
[citations omitted] The general purpose of Wyoming Statute
§ 27-14-401(e) (LexisNexis) is to allow for the payment
of ambulance services provided to injured Wyoming workers
under the WC Act. The remaining valid portions of Wyoming
Statute § 27-14-401(e) (LexisNexis) - "If
transportation by ambulance is necessary, the division shall
allow a . . . charge for the ambulance service" - are
sufficient to accomplish the goal of paying for ambulance
services provided to injured Wyoming workers covered by the
WC Act. In other words, Wyoming Statute § 27-14-401(e)
(LexisNexis) as preempted by the U.S. District Court, allows
for: (a) the payment of air ambulance charges for necessary
transportation of workers' compensation claimants; and
(b) the payment of reasonable ground ambulance charges for
the necessary transportation of workers' compensation
claimants in accordance with the Division's duly adopted
Based on the federal preemption ruling and its finding of
severability, the OAH ordered that "[t]he Air Ambulance
Companies are entitled to reimbursement of the full amount of
the air ambulance service charges submitted and billed to the
Division in all of the consolidated claims before this
Office." On September 1, 2017, the Division filed a
petition for judicial review of the OAH ruling.
On September 11, 2017, Air Methods filed a motion for pre-
and post-judgment interest on its claims with the OAH. The
Division opposed Air Methods' interest motion, contending
that the OAH no longer had jurisdiction over the matter, and
that the Worker's Compensation Act does not authorize
payment of interest on claims. On October 20, 2017, the OAH
entered an order denying the interest motion on grounds that
the OAH lacked both jurisdiction and statutory authority to
award interest on Air Methods' claims.
On October 31, 2017, Air Methods filed a petition for
judicial review of the OAH order denying its interest motion.
On November 29, 2017, the district court entered an order
consolidating the Division and Air Methods appeals, and on
February 23, 2018, the court entered an order certifying the
consolidated appeals to this Court. On March 27, 2018, this
Court issued an order accepting the consolidated and
This appeal presents only questions of law. We review an
agency's conclusions of law de novo and will
affirm only if those conclusions are in accordance with law.
Coggins v. State ex rel. Wyo. Dep't of Workforce
Serv., Workers' Comp. Div., 2018 WY 77, ¶ 11,
421 P.3d 555, 559 (Wyo. 2018) (quoting Morris v. State ex
rel. Dep't of Workforce Servs., Workers' Comp.
Div., 2017 WY 119, ¶ 25, 403 P.3d 980, 987 (Wyo.
We will first address the Division's appeal of the OAH
summary judgment ruling (Appeal No. S-18-0074), following
which we will address Air Methods' appeal of the OAH
order denying its motion for pre- and post-judgment interest
Appeal No. S-18-0074
In appealing the OAH summary judgment ruling, the Division
presents what we treat broadly as three arguments: A) the
federal courts erred in their preemption analysis due to an
error as to state law; B) the OAH erred in finding Wyo. Stat.
Ann. § 27-14-401(e) severable; and C) the OAH order
directing payment to Claimants in full requires the Division
to make a payment without an appropriation in violation of
the Wyoming Constitution. We will address each in turn.
Federal Courts' Preemption Analysis
The Division's first argument on appeal is a challenge to
the preemption ruling made by the federal district court and
upheld by the Tenth Circuit. The Division contends that the
preemption ruling was based on an incorrect interpretation of
state law and that this Court should correct that alleged
misstep by the federal courts. Claimants respond that this is
a new argument on appeal that this Court should not consider,
and because the argument represents a collateral attack on
the federal rulings, it is also barred by the doctrines of
collateral estoppel, res judicata, and judicial
estoppel. We agree that the argument is one raised for the
first time on appeal, and we therefore decline to consider
In support of its preemption argument, the Division points to
Wyo. Stat. Ann. § 27-14-501(a), which defines the
procedure for filing claims under the Act and prohibits a
medical provider from billing an injured employee for any
amount not covered by workers' compensation benefits-also
known as balance billing. It argues that the error in the
federal analysis was an assumption that the balance billing
prohibition applies to air ambulance providers. According to
the Division, the prohibition does not apply to air ambulance
providers, so those providers may simply bill injured workers
for the balance of any charge the Division only partially
pays. Thus, the argument goes, since § 401(e) limits
what the Division may pay, but not what the air ambulance may
collect, the Act does not impermissibly regulate air
It is apparent from a reading of the federal decisions that
this was not an argument that the Division presented to
either the federal district court or the Tenth Circuit. In
fact, it is clear that the Division's argument before the
Tenth Circuit was that § 27-14-501(a) does prohibit
Claimants from balance billing injured workers.
Defendants contend that air-ambulance companies are free to
either submit a bill to the Division for reimbursement at the
rates established in the rate schedule, agreeing in
return not to bill any remaining unpaid amounts to the
injured worker, or to submit the entire bill to the
injured worker for payment. * * * Defendants contend that an
air-ambulance provider does not "accept the case of an
injured employee" until the provider chooses to present
a claim to the Division, and it is only then, Defendants
contend, that the remainder of the statute kicks in and
prohibits the provider from billing the injured employee for
the expenses incurred.
EagleMed, LLC v. Cox, 868 F.3d 893, 900 (10th Cir.
2017) (emphasis added).
More importantly for our purposes, the Division did not raise
this question in the OAH proceeding. At no point in the
administrative proceedings did the Division question the
federal preemption ruling or suggest to the OAH that it could
avoid preemption of the fee schedule by ruling that §
501(a) permits Claimants to bill the balance of their charges
to injured employees. In fact, the opposite is again true. In
its summary judgment reply brief, the Division stated
unequivocally, "The preemption ruling is not at issue in
this proceeding." It repeated this position in its oral
argument before the OAH, stating in reference to its fee
schedule, "[T]hose limitations have been preempted[.] .
. . Those are gone. We all agree that those are
We have repeatedly held that in an appeal from an
administrative ruling, we will not consider arguments not
Wyoming Rule of Appellate Procedure 12.09(a) limits an
appellate court's review of administrative action to
"issues set forth in the petition and raised before the
agency." Accordingly, we have routinely held that, with
the exception of jurisdictional or certain fundamental
issues, issues raised for the first time on appeal from an
administrative decision will not be considered. State ex
rel. Dep't of Family Servs. v. Kisling, 2013 WY 91,
¶ 14, 305 P.3d 1157, 1162 (Wyo. 2013); BP Am. Prod.
Co. v. Dep't of Revenue, 2006 WY 27, ¶ 18, 130
P.3d 438, 462 (Wyo. 2006).
Crofts v. State ex rel. Dep't of Game and Fish,
2016 WY 4, ¶ 15, 367 P.3d 619, 623 (Wyo. 2016).
The correctness of the federal preemption ruling was not the
question before the OAH, and we therefore find no basis to
view the Division's question concerning the federal
interpretation of Wyo. Stat. Ann. § 27-14-501(a) as a
fundamental issue demanding this Court's attention. We
instead view the Division's argument as simply a shift in
its theory on the preemption question, and we therefore
decline to address the argument. See Crofts, ¶
19, 367 P.3d at 624 ("This court has taken a dim view of
a litigant trying a case on one theory and appealing it on
another. . . . Parties are bound by the theories they
Severability of Wyo. Stat. Ann. §
The crux of the Division's appeal is the severability of
§ 401(e), which provides:
If transportation by ambulance is necessary, the division
shall allow a reasonable charge for the ambulance service at
a rate not in excess of the rate schedule established by the
director under the procedure set ...