Freestanding Emergency Centers Increase Healthcare Costs, Not Access

Freestanding emergency centers are not solving the cost of healthcare in Texas. They are multiplying it.

By locating primarily in areas with high incomes and multiple hospital-based emergency rooms and urgent care clinics, freestanding emergency centers increase the cost of healthcare. A recent study from Rice University found that for conditions that could be treated in an urgent care center, but were instead seen in a freestanding emergency center, the cost was more than 10 times higher. Blue Cross Blue Shield of Texas data shows that 75 percent of freestanding emergency center patients could have been treated in an urgent care center or doctor’s office at a much lower cost.

To increase profits, many independent freestanding emergency centers choose to stay out-of-network with insurance companies. Being out-of-network allows freestanding emergency centers to charge whatever they want for their services, leading to exorbitant bills to unsuspecting Texans.

Recently, a BCBS TX member went to a freestanding emergency center with a sore throat and was diagnosed with tonsillitis. The facility charged more than $45,000 for the visit.

Yet another of our members arrived to a freestanding emergency center with nausea and vomiting. The patient was diagnosed with stomach flu and was discharged. The bill for this visit? $51,000.

In circumstances like these, patients are often responsible for a large portion of the bill.  By choosing to remain out-of-network, freestanding emergency centers are able to bill the patient for the difference between what insurance pays and their inflated charges. That difference leads to the patient receiving a “surprise bill,” which can run in the thousands of dollars.

And make no mistake, these centers are choosing to remain out of network. In 2016, BCBS TX contacted all known out-of-network freestanding emergency centers in the state, hoping to bring their facilities into our network, to protect our members from surprise bills. The overwhelming majority of them declined to even look at our contracted rates, preferring to remain out of network.

This issue now has the attention of lawmakers in Austin, and eleven proposed laws have been filed to address complaints about the business practices of freestanding emergency centers.  Several proposed laws would require full disclosure and transparency of billing practices of freestanding emergency rooms, and two–SB 2064 by Sen. Hancock and HB 3867 by Rep. Smithee–would authorize the Texas Attorney General to take action in cases of “unconscionable pricing,” commonly called gouging. Contact your state senator or your state representative and ask them to support measures that will protect Texans from exorbitant charges at freestanding emergency centers.

It’s our responsibility at BCBS TX to provide our members access to quality, cost-effective healthcare. Texans deserve quality, affordable care with no surprises, and no unconscionable bills.

Dr. Paul Hain is North Texas market president for Blue Cross and Blue Shield of Texas and is a board certified pediatrician.

Posted in Expert Opinions.
  • Gerad Troutman

    This article is full of LIES! There is no legitimate data to backup any of these claims, only data put out and funded by for profit insurance companies which strive to make money by NOT paying out on claims and forcing costs via high deductibles on Texans.

    Emergency Physicians put patients FIRST. Freestanding Emergency Centers would universally like to be In Network but you have offered poor rates and nothing comparable to what you pay a hospital based ER despite FECs being similarly equipped.

    It is sad that the insurance companies continue to propagate FAKE NEWS and false information that endangers Texans.

  • Robert Hancock

    This is a complete misrepresentation of facts. In some cases, my colleagues have contacted insurers to discuss in network rates at FSED’s. In most cases the insurers offered ridiculous rates well below the standard in emergency care. In some cases the insurers didn’t even bother to return the phone call. The author of this article clearly knows little to nothing about emergency medicine or FSED’s. He’s only offering the opinion of BCBS who is simply trying to increase profits and bonuses.

  • Shayla Ally

    In our experience, if we are lucky enough to get past the initial email, insurance companies refuse in-person meetings. Many attempts have been made to work with Insurance companies to become in network. There is definitely a coordinated effort to keep Freestanding ER’s out of their contracted network. Believe me, it’s not us.

  • Randy Sachs

    The third sentence is also a key to the whole equation. Patients are receiving care in the wrong environment.

  • Robert Holland
  • Jarred

    Important context here about the Rice Study referenced by the author: Not only was the data called into question, the study’s own co-author stated in an op-ed that the study compares apples to oranges and warns that the findings have been extrapolated to threaten emergency care. The study has since been removed from the Annals of Emergency Medicine and is pending evaluation of the integrity of the data. Notice how the link goes to a Blue Cross Blue Shield video, not an actual academic study…

    Op-Ed link: http://www.bizjournals.com/houston/news/2017/03/30/op-ed-policymakers-shouldnt-compare-apples-to.html

  • Carrie de Moor

    Dr. Paul Hain- I sincerely hope you are at TEXMED this weekend. If you are, and if you are so bold to stand behind your message crafted by your bosses, then come on Facebook Live with me and debate the topic. Are you prepared to answer the hard questions? My guess… you don’t have the data or the guts. If you do, then let’s do it. Your article is full of slander and false claims and information. I’m prepared with cold hard truth and data to show the world you are wrong. Are you? Challenge offered. Will you accept???

    • Lori Debetaz

      So FSED owners claim they really want to be in network and are requesting reasonable reimbursement rates and insurance companies claim FSED’s purposely stay out of network or request unreasonable rates. So I challenge both groups to openly publish the rates being requested and the rates being offered for a common set of ED services and let’s shine a light on this issue. In the meantime patients continue to be caught in the crossfire of two groups who just point fingers at each other and offer no real solutions.

      • Carrie de Moor

        Lori- I would love to. Unfortunately, there are some anti- trust issues and non disclosure issues to get around. If you want a real comparison, the insurance companies should also post their current in Network contract rates with mega hospital systems. If you want to know the average going price in an area, you can go to fairhealthconsumer.org for average charges in a given zipcode. I can tell you that 3 of 4 major carriers in Texas just flat out refuse to even respond to emails and requests for a contract offer unless you have a very large foot print. The ones that do respond, try and offer a set rate no matter what service is provided and which does not even cover the cost of care or let’s say for example the medications being used to treat a patient. We see absolute flat out refusal to offer in network rates for observation care which could save consumers and employers astronomical amounts of money by avoiding hospital admissions. Bottom line- patients want access to quality and convenient care. Your insurance doesn’t want you to have access. But truth be told- if the insurance companies would actually abide by the law and cover patients appropriately, patients wouldn’t be caught in the middle. FSERs have been around for over a decade and the only reason that consumers are now feeling the cost burden is because they have high deductibles and insurance plans that quite frankly are little more than catastrophic coverage. 44% of Americans end up in the eR every year. Average cost is $2k. Average deductible on a bronze plan is $6k. Insurance companies are great at being loud bullies, emergency providers are sick and tired of it and fighting back so patients can continue to have access to care. The insurance companies primary goal in all of this is to make sure you don’t have that access- just like they did to independent pharmacies.

  • Skip Kirkwood

    It seems that Texas has muddied the waters a good bit. It appears that there are FSEDs that are “part of the mother ship” (subject to EMTALA and responsible for moving the patient if needed), and other FSEDs that are not (they are glorified urgent care centers, unaffiliated or “using a different provider number” from the parent hospital.

    Other states do not permit this game of “hide the ball.” In those states, FSEDs MUST be part of the parent hospital. Texas should look at cleaning up its laws and regulations to end this game.

    • Carrie de Moor

      Skip- you are misinformed. Texas law highly regulates independent FSERs and Texas law has a more stringent EMTALA like requirement than EMTALA itself. Independent providers actually keep the mega hospital systems in check and help keep them from driving costs through the roof. The “hide the ball” games are coming from the insurance companies who are leaving patients with massive gaps in coverage and doing so unlawfully. Freestanding ERs and Hospital Satellite Departments are regulated differently and those regulated by the FSER laws are much more highly regulated and monitored than those operating under hospital satellite licenses. Unfortunately-hard for consumers to know the difference. Independent FSERs are on average 20-30% less expensive than hospital owned facilities who have much much higher overhead.