Colorado offers to pay hospitals to close autonomous ERs

Colorado health officials are abhorring the high costs associated with autonomous emergency rooms that offer to pay hospitals to close facilities.

The state wants hospitals to convert them to other purposes, such as providing primary or mental health services.

At least 500 autonomous ERs have been installed in more than 20 states in the last decade. Colorado has 44, 34 hospital properties.

The trend began a decade ago with hopes that these autonomous structures would meet a need for ER care when there was no nearby hospital and reduce congestion in the hospital’s ER.

But this rarely happens.

However, these emergency rooms – not physically connected to hospitals – are generally installed in affluent suburban communities, often near hospitals that compete with the owners of autonomous ERs. And they have widely treated patients who did not need emergency care, but have also billed them and their insurers at costly ER rates, several studies have found.

“We don’t want hospitals to have independent ERs, so we are willing to pay to close them,” said Kim Bimestefer, executive director of the Colorado Department of Health Policy and Finance, which oversees the state’s Medicaid program. She said the use of these facilities to treat common injuries and illnesses leads to higher costs for Medicaid, which the state finances in part, and other insurance.

The Colorado move is part of a new initiative that requires hospitals to improve their quality of care by qualifying for millions of dollars in Medicaid payments. Hospitals can choose from state-provided goals such as lowering readmission rates or examining patients for social needs such as housing. Converting autonomous ER to meet other needs is one of these goals.

“Talk about money,” Bimestefer said, explaining why the state offers financial incentives.

Money has been a major driver of the boom in autonomous emergency centers. Hospitals have used it to attract patients who could be referred to the main hospital for inpatient care. They are also seen as a way to compete with rivals. For example, in Palm Beach County, Florida, the for-profit hospital chain HCA Healthcare has opened independent ERs near competing hospitals in Palm Beach Gardens and Boynton Beach.

In addition, the massive amounts of private equity funds flowing into health care have further fueled the growth of independently owned ERs.

The Denver-based Center for Improving Value in Health Care has found that most of the conditions treated in these facilities are more suitable for urgent care centers with low acuity and lower costs. The organization’s studies show that patients can pay 10 times more in an autonomous ER than in an urgent care center for the treatment of the same situation.

Adam Fox, deputy director of the Colorado Consumer Health Initiative, said self-employed ERs have not been placed where health services are scarce. Instead, they are open in middle- and higher-income neighborhoods where most people have health insurance and access to care. “This push by the state will help” hospitals reconsider whether these facilities still make financial sense, he said.

In recent years, Colorado has moved to make these structures less attractive with laws preventing them from attacking patients with surprise bills for high fees because the ER was outside their insurance networks. He also demanded that patients without real emergencies be told that they can receive treatment for a lower price at an urgent care center.

The law requires an autonomous ER to send a sign informing patients that it is an emergency room that treats emergency conditions. It must also specify the prices of the 25 most common services it provides.

Even before the new policy began rolling out later this year, some Colorado hospitals have begun converting these structures. UCHealth has transformed nine in the last two years into primary or emergency care centers and one into a specialty center. It also has nine others in operation across the state.

According to Dan Weaver, spokesman for UCHealth, part of the University of Colorado, the conversions were not caused by state actions. “Neither surprise billing legislation nor price transparency played a role in these decisions – we converted them because we felt that patients in these communities needed urgent care, primary care and / or specialty services. near the house, ”Weaver said.

He added that the hospital system has always stressed that people should use services at lower costs, including urgent care, primary care or virtual urgent care, in non-emergencies.

Ryan Westrom, senior director of finance at the Colorado Hospital Association, said hospitals have converted some of these centers into services such as urgent care in response to changes in insurance reimbursement and other factors. He said he was not sure if many hospitals would accept state payments to close their autonomous ERs.

HealthONE, which has eight free-standing ERs in the Denver area, said it did not plan to close any despite the payment of the state incentive.

Vivian Ho, a health economist at Rice University in Houston who tracked the growth of these stand-alone emergency rooms, applauded Colorado’s effort.

But she worries that hospitals might decide it’s not worth closing an autonomous emergency department and losing profits: “You have to attack ED autonomously from more angles to get people to stop going to them and to get hospitals to use them as a way to generate more revenue for care that can be sent to lower-income sites. ”

He said the covetous pandemic, which has decreased demand for emergency care, and recent federal billing legislation to surprise can damage the growth of autonomous ERs.

They are already facing headwinds. Adeptus Health, the Texas-based company that has led the trend here and started dozens of autonomous emergency rooms, often in conjunction with hospitals, has filed for bankruptcy this year. And many autonomous structures closed at least temporarily during the pandemic as demand for care dropped dramatically.

Medicare counselors are also pushing back growth. A recent proposal by the Medicare Payment Board Commission, which reports to Congress, will cut Medicare payment rates by 30% on certain services in independent facilities 6 miles from an emergency room in a hospital.

According to a MedPAC analysis of five markets – Charlotte, North Carolina; Cincinnati; Dallas; Denver; and Jacksonville, Florida – 75% of autonomous facilities were within 6 miles of a hospital with an emergency department. The average journey time to the nearest hospital was 10 minutes.

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