Protect Continued Medicare Beneficiary Access to Freestanding Emergency Centers (FECs)

To expand provider capacity to respond to the COVID pandemic, in April 2020, the Centers for Medicare and Medicaid Services (CMS) issued a waiver allowing FECs to enroll as Medicare-certified hospitals and receive Medicare reimbursement for the duration of the COVID-19 public health emergency (PHE). Over 129 FECs, primarily located in Texas, enrolled and provided high-quality emergency services for all kinds of emergency conditions at significant savings to the Medicare program to thousands of Medicare beneficiaries. Now that the PHE has been terminated, Medicare beneficiaries have lost access to these critical health facilities, and Congress must act to restore Medicare recognition to FECs.

Background of Freestanding Emergency Centers

FECs are EMTALA-compliant emergency departments that are fully staffed 24/7 with emergency-trained ER physicians and nurses and have all the capabilities of a hospital-owned ER, including advanced imaging, lab, and pharmacy. FECs can treat patients within minutes and quickly stabilize them, avoiding unnecessary and costly inpatient admissions. The only difference between FECs and hospital-owned ERs is ownership, not capability.

A Potential Solution for Rural Access to Emergency Care

Additionally, as rural hospitals continue to close (148 since 2010, 38 since 2020, and over 15 last year), 60 million Americans in rural areas risk having limited or no real access to emergency services. FECs are a potential solution to this rural access issue, as they are efficient care sites with limited fixed costs compared to hospitals. However, Medicare recognition is imperative for this model of care to be viable in rural areas where they are needed most.

Actuarial Study: Shows that FECs participation in Medicare Saves Money and Does Not Increase Utilization

Dobson DaVanzo & Associates, a highly revered actuarial firm, analyzed Medicare claims data from 2019 to 2022 to assess the impact of the Medicare waiver for FECs in Texas on the utilization of emergency care and Medicare payments. Key takeaways from the study included:

• Medicare saved 21.2% for emergency care provided in FECs during the PHE, as they utilized fewer services on a risk-adjusted basis than hospitals.

• There was no overall increase in ER services in Texas compared to the US After Medicare FEC recognition. Texas ER utilization was consistent with that across the US.

• 129 FECs in Texas comprise about 4.1% of ER utilization in the state.

The Emergency Care Improvement Act

Reps. Jodey Arrington (R-TX) and Vicente Gonzalez (D-TX) introduced the Emergency Care Improvement Act (HR 1694), which would improve Medicare beneficiary access to emergency care in rural areas and improve access and competition in urban areas by providing permanent Medicare and Medicaid recognition of FECs. The bill provides Medicare payments for qualifying FECs at the hospital rate for emergency services for only moderate and high acuity ER codes. It ensures FEC recognition will not put rural hospitals at risk by only allowing new Medicare-recognized FECs in rural counties with no current hospital. The American College of Emergency Physicians endorsed the bill. Rep. Raul Ruiz (D-CA), an important voice on the Energy & Commerce Committee and a former ER physician, signed on to support the bill. He recognizes the important role Medicare reimbursement for FECs can play in increasing access to emergency care, especially for rural areas.

NAFEC urges Members of Congress to sign on to co-sponsor the Emergency Care Improvement Act to improve both access and competition for rural and urban patients, where appropriate.