Congress Urged To Cut Medicare Payments To Many Stand-Alone ERs

The woman arrived at the emergency department gasping for air, her severe emphysema causing such shortness of breath that the physician who examined her put her on a ventilator immediately to help her breathe.

The patient lived across the street in the emergency department in suburban Denver, said Dr. David Friedenson, who looked after her on that day a few years ago. The facility wasn't physically located at a hospital but was affiliated with North Suburban Clinic several miles away.

Free-standing emergency departments have been appearing recently and today number a lot more than 500, according to the Medicare Payment Advisory Commission (MedPAC), which reports to Congress. Often touted as more convenient, less crowded options to hospitals, they frequently attract suburban walk-in patients with higher insurance whose medical conditions are less acute than those who visit an emergency room located in a medical facility.

If a current MedPAC proposal is adopted, however, some providers predict that these free-standing facilities turn into scarcer. Propelling the effort are concerns that MedPAC's payment for services at these facilities is higher than it should be since the patients who visit options are sometimes not as severely injured or ill as those at on-campus facilities.

The proposal would cut back Medicare payment rates by 30 % for some services at hospital-affiliated free-standing emergency departments that are located within 6 miles of the on-campus hospital emergency department.

“There has been a development in free-standing emergency departments in cities that does not appear to be addressing any particular access need for emergency care,” said James Mathews, executive director of MedPAC. The convenience of the neighborhood emergency department might even induce demand, he explained, calling it an “if you construct it, they will come” effect.

Emergency care is more expensive than the usual visit to a principal care doctor or urgent care center, in part because emergency departments have to be on standby 24/7, with expensive equipment and personnel prepared to handle serious automobile accidents, gunshot wounds and other trauma cases. Despite the fact that free-standing emergency departments have lower standby costs than hospital-based facilities, they typically receive the same Medicare rate for emergency services. The Medicare “facility fee” payments, which include some ancillary lab and imaging services although not reimbursement to physicians, are designed to help defray hospitals' expenses.

The proposal would affect only payments for Medicare beneficiaries. But private insurers often consider Medicare payment policies when setting their rules.

According to a MedPAC analysis of 5 markets – Charlotte, N.C.; Cincinnati; Dallas; Denver; and Jacksonville, Fla. – 75 percent of the free-standing facilities were located within 6 miles of the hospital by having an emergency department. The typical drive time to the closest hospital was 10 minutes.

Overall, the amount of outpatient emergency department visits by Medicare beneficiaries increased 13.6 percent per capita from 2010 to 2021, compared with a 3.5 percent growth in physician visits, according to MedPAC. (The reported data doesn't separate conventional and free-standing emergency facility visits.)

“I think [the MedPAC proposal] is really a relocate the best direction,” said Dr. Renee Hsia, a professor of emergency medicine and health policy in the University of California-San Francisco that has written about free-standing emergency departments. “We have to understand you will find limited resources, and also the fixed costs for stand-alone EDs are lower.”

Hospital representatives the proposal might cause some free-standing emergency departments to close their doors.

“We are deeply concerned that MedPAC's recommendation has the potential to reduce patient access to care, particularly in vulnerable communities, carrying out a year by which hospital EDs taken care of immediately record-setting disasters and flu infections,” Joanna Hiatt Kim, v . p . for payment policy at the American Hospital Association, said inside a statement.

Independent free-standing emergency departments that are not affiliated with a medical facility wouldn't be affected by the MedPAC proposal. These facilities, which will make up about a third of all free-standing emergency facilities, aren't clinically integrated having a hospital and can't participate in the Medicare program.

The MedPAC proposal is going to be included in the group's are accountable to Congress in June.

Even though stand-alone emergency facilities may not routinely treat patients with serious trauma, they are able to provide lifesaving care, proponents say.

Friedenson asserted for his emphysema patient, avoiding the 15- to 20-minute drive to the main hospital designed a critical difference.

“By stopping at our emergency department, I truly think her lifetime was saved,” he said.