Emergency Room Improvement Act (S. 3531) Will Boost Patient Access to ERs and Improve Care Options for Medicare and Medicaid

October 17, 2018 — Washington, D.C.— U.S.Senator Bill Cassidy, M.D. (R-LA), has introduced legislation to provide Medicare and Medicaid beneficiary access to emergency room care in multiple states where Freestanding Emergency Centers (FECs) operate.  The bill would improve patient access to emergency services in crowded urban areas as well as rural areas where access to hospitals is limited. The bill would be a value proposition for Medicare by offering emergency services at a discounted rate.

There are more than 500 Freestanding Emergency Centers across the United States and most were established after 2010. FECs offer high-quality emergency care to patients in fully licensed facilities. Just as hospital-based ERs operate 24/7 and have emergency-trained physicians on-site at all times, so do FECs.

Additionally, Freestanding Emergency Centers are:

  • Fully equipped for all emergencies and provide around-the-clock lab and imaging services.

  • FECs stock medications not required for urgent-care centers.

  • FECs treat most emergent illnesses and conditions, including heart attack, stroke, and minor trauma.

  •  FECs are licensed by the states where they operate and comply with state EMTALA requirements, which mandates treatment of all patients regardless of their ability to pay.

Regarding patients’ ability to pay, over the past decade, FECs have provided tens of millions of dollars in uncompensated care to patients with no insurance. In having recognition from the Centers for Medicare and Medicaid Services (CMS), FECs will now be able to widely promote their ability to accept Medicare and Medicaid, which will make clear to even more patients in both urban and rural areas that emergency care outside of a hospital is widely available to them.

FECs offer essential and more convenient patient care, cutting down on patient wait times and offer a solution to rural communities that may not have a hospital in the area. Additionally, with shorter wait times, and quicker attention to emergent conditions, fewer patients require hospitalization.

Although FECs are structurally the same as off-campus EDs (OCEDs)—because they are not affiliated with a hospital—they are not currently eligible to receive Medicare or Medicaid reimbursement. Hospital ownership should not dictate patient access to care. 

Dr. Cassidy recognized that the statute needed to be modernized in order to reflect the improved delivery of healthcare.

As a result, he filed S. 3531, the Emergency Care Improvement Act, whichwould provide Medicare and Medicaid recognition of Freestanding Emergency Centers so they can continue to serve Medicare and Medicaid patients and be partially compensated for the care provided. 

This legislative solution—endorsed by both the National Association of Freestanding Emergency Centers (NAFEC) and the American College of Emergency Physicians (ACEP)—would also help to enable expanded FEC growth in rural areas.

“I introduced this bill because it provides Medicare and Medicaid patients with better access to emergency medical care, reduces their out-of-pocket costs, while also saving taxpayers money,” said Dr. Cassidy.

As ACEP president Paul Kivela recently penned in a letter to Dr. Cassidy: “We think FECs can improve access to emergency care in all areas and we particularly appreciate your recognition of the unique issues affecting access to emergency medical services in rural communities, and relative adjustment of reimbursement for FECs in these geographic areas as part of the legislation.”

Dobson-Davanzo, a highly respected health care consulting firm, performed an actuarial analysis of this proposal and found that it would save Medicare a net $28 million over 10 years, even after accounting for expected increased utilization. That analysis focused on the 5 states where FECs are now licensed (TX, RI, CO, SD, and AZ) and used MedPAC’s assumption on induced demand (5.5 percent) and conservative assumptions on growth and migration. These savings do not include fewer hospital admissions from FECs as documented in peer-reviewed literature.[1]

Brad Shields, Executive Director of NAFEC added, “This value-based bill would improve patient access to emergency care, particularly in towns far away from hospitals, while also offering savings and greater competition to the Medicare program. Dr. Cassidy’s patient-centered efforts will make a substantial difference in the lives of Americans where FECs exist, and especially, in Texas—where the need for and access to reliable emergency care has never been greater.”

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About S. 3531

  • Reimburse FECs:

    • 75 percent of Medicare’s hospital rate for FECs located in urban and suburban areas for higher acuity evaluation/management levels (99283-99285). Lower acuity patients typically seen by urgent care would not get facility payments

    • 95 percent of Medicare’s hospital rate for FECs located in rural, i.e. non-MSA areas for higher acuity evaluation/management levels (99283-99285) 

[1]When comparing FECs to hospital-based ERs, Simon et al observed a 20% lower admission rate for conditions such as chest pain, COPD, asthma and congestive heart failure. These savings were not quantified in the Dobson Davano analysis. (Simon El, et al. “Variation in hospital admission rates between tertiary care and two freestanding emergency departments,” American Journal of Emergency Medicine, 2017)