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Breaking News: Freestanding EDs Mushroom as States Work Out Regs

Scheck, Anne

doi: 10.1097/01.EEM.0000453157.43106.cd
Breaking News
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First came Utah's D- grade from the American College of Emergency Physicians. Then, the Affordable Care Act required the University of Utah to consolidate patient care. Finally, a new master-planned community in Salt Lake City experienced galloping growth.

Put them all together, and what do you get? The need for a freestanding emergency department in the capital city of the Beehive State, according to one of the first academic articles to look at the range of variables likely to influence this burgeoning new practice setting.

Two emergency physicians — John Dayton, MD, and Erik Barton, MD, — described the science-based case that was made for establishing the South Jordan Free-Standing ED in the inaugural issue this spring of the Journal of Free Standing Emergency Medicine. The emergency center is a satellite of the medical campus at the University of Utah, 20 miles away. “The unique facility will offer educational opportunities to medical students, residency fellows, and mid-level physicians seeking to advance their skills in caring for emergency patients,” Drs. Dayton and Barton wrote.

A freestanding ED and its attached primary care clinic seemed to be the best way to address ACEP's embarrassingly low grade and the ACA's impact, ensuring round-the-clock delivery of quality health care to South Jordan and the surrounding population. Drs. Dayton and Barton acknowledged that the business model for freestanding EDs has drawn criticism, but it met the university's goal of taking care of its patients.

In fact, the concept of a freestanding ED like the one in Salt Lake City is nothing new. Known also as freestanding emergency centers and the soon-to-be archaic stand-alone emergency rooms, they actually began in rural areas, where hospitals couldn't sustain operation.

A study conducted 15 years ago on small-town stand-alone EDs showed only a small income increase occurred in most cases, and relatively large losses were incurred in two of them. “A subsidy would be required from the community or an affiliated hospital or network for the model to remain financially stable,” according to the results. (J Rural Health 1999;15[2]:170).

Freestanding ED growth began to skyrocket about five years ago, mostly in suburban areas. Nowhere was that more apparent than Texas, home to nearly 100 freestanding emergency centers, as they are called in the Lone Star State. The Texas freestanding EDs differ in another way, too. The state allows independent ownership by physicians and other private investors, and most Texas centers operate under this arrangement.

Other states like Utah have freestanding EDs owned by hospitals or health care organizations. A majority of states also require demonstration of need for a freestanding ED in a designated area. Texas has no such need-oriented mandate. The number of freestanding EDs is estimated to have more than doubled in the past few years. Five years ago, they constituted slightly less than two percent of all U.S. EDs. (J Emerg Med 2012;43[6]:1175.) Freestanding EDs also are attracting clinical study: Door-to-balloon times in two such facilities were found to meet a less-than-90-minute goal for myocardial-infarct patients with ST segment elevation. (J Emerg Med 2014;46[5]:734.)

Federal regulations allow freestanding EDs to bill as dedicated EDs, so they are reimbursed at higher rates for Medicare patients than are urgent-care centers — 25 percent to 100 percent higher, according to a report by the California Healthcare Foundation, which evaluated the costs associated with freestanding centers three years ago. Most don't accept 9–1-1 transports, so the majority of patients aren't high-acuity. Some also charge facility fees, often a baseline cost.

Colorado legislators proposed a law that would do away with facility fees, which critics charge can be excessive for freestanding EDs. The bill would allow these facilities to continue charging higher rates than urgent care centers, but not by imposing a basic cost that has nothing to do with the actual services provided. So far, this bill has failed to garner enough votes for passage. Freestanding EDs, however, have faced increasing regulatory measures across the country, in a state-by-state patchwork, and with legislation in flux, according to a 2013 ACEP report. New Jersey, for example, has no regulation of freestanding EDs, a fact likely to change. Illinois, in contrast, requires all freestanding EDs to be hospital-owned and to have at least one board certified emergency physician present at all times while providing 24-hour coverage seven days a week. Idaho has a similar law.

Not surprisingly, there's been a backlash by some insurers. Aetna, for example, sued some Texas freestanding centers, and other insurance companies have been trying to forge agreements to lower payments for common procedures.

Before he moved to his Houston freestanding ED, emergency physician Eric McLaughlin, MD, wondered if he could continue in emergency medicine, even if he worked only long enough to take early retirement. He knew he had to stay on the job. He was still loaded with debt from medical school.

“It took me two shifts a month just to make that payment,” he said. He switched to a freestanding ED after more than a decade at a hospital emergency department northwest of the city. “It's such a contrast,” he said. Two hundred patients might stream through his former community medical center each day, but now he's likely to see a dozen, maybe a few more, during his shift, giving him far more time with each.

Most freestanding EDs have to adhere to EMTALA so they are seeing all patients “without regard to type of insurance, at least for the initial evaluation and stabilization,” said Carlos Camargo, Jr., MD, DrPH, the Conn Chair in Emergency Medicine at Massachusetts General Hospital and a professor of medicine at Harvard.

Dr. Camargo's exactly right, Dr. McLaughlin said. But a patient with a minor complaint might elect not to pursue evaluation and treatment to save on costs after the legally required medical screening exam, he said.

Dr. McLaughlin is the first to admit that a new set of demographics played a role in his present career satisfaction. The facility, Elite Care, is located in a shopping and restaurant destination known to locals as the Village. Patients include Rice University college students and faculty, among other residents of the leafy neighborhood of River Oaks. A large part of the patient population is from the medical community — physicians themselves or family members and friends of physicians “who have given word-of-mouth praise and recommendation,” he said.

Any new health care model needs three attributes to succeed: Durability from continued business, effectiveness proven by quality measures, and efficient use of resources, said Mark O'Halloren, MD, the vice president for strategic outreach at Oregon Health & Science University in Portland. It's too soon to tell if freestanding EDs will meet the criteria.

It's likely that emergency physicians who have freestanding ED practices will comprise a special section of ACEP in the next few years. Currently, an online petition aims to do just that because ACEP bylaws require 100 or more members of the college to submit a request to the board of directors to form a section. (http://bit.ly/ACEP-FSEDs.) Could this be the wave of the future for emergency medicine? Even Dr. McLaughlin isn't sure. “I just know it is for me,” he said.

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