Colorado offers to pay hospitals to close stand-alone emergencies

Colorado health officials hate the high costs associated with stand-alone emergency rooms so much that they are offering to pay hospitals to shut down facilities.

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

At least 500 stand-alone REs have been implemented in more than 20 states over the past decade. Colorado has 44, 34 owned by hospitals.

The trend started ten years ago with the hope that these stand-alone facilities would meet a need for emergency care when there was no hospital nearby and reduce congestion at hospital emergency rooms.

But this has rarely happened.

Instead, these emergency rooms – which are not physically connected to hospitals – are typically set up in affluent suburban communities, often near hospitals that compete with the owners of stand-alone ERs. And they largely treated patients who didn’t need emergency care, but still charged them and their insurers high rates for emergencies, according to several studies.

“We don’t want hospitals to have stand-alone emergencies, so we’re willing to pay to shut them down,” said Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Funding, which oversees the program. State Medicaid. She said using the facilities to treat common illnesses and injuries results in higher costs for Medicaid, which the state partially funds, and other insurers.

Colorado’s decision is part of a new initiative that requires hospitals to improve the quality of their care to qualify for millions of dollars in Medicaid payments. Hospitals can choose from goals provided by the state, such as reducing readmission rates or screening patients for social needs such as housing. Converting stand-alone REs to meet other needs is one of those goals.

“Money talks,” Bimestefer said, explaining why the state offers financial incentives.

Money has been one of the main drivers of the rise of autonomous emergency centers. Hospitals used them 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 opened free-standing emergency rooms near competing hospitals in Palm Beach Gardens and Boynton Beach.

In addition, the massive amounts of private equity funds flowing into healthcare has further fueled the growth of stand-alone ROEs.

The Denver-based Center for Improving Value in Health Care has found that many of the conditions treated at these facilities are more appropriate for low-acuity, lower-cost emergency care facilities. Patients can pay 10 times more in an independent emergency room than in an emergency care center for treatment of the same disease, according to studies from the organization.

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

In recent years, Colorado has taken steps to make owning these facilities less attractive with laws preventing them from sticking patients with surprise bills for high fees because the emergency was out of their networks. insurers. He also demanded that patients without a real emergency know they can get treatment for less at an emergency care facility.

The law requires stand-alone emergencies to post a sign advising patients that this is an emergency room that deals with emergency conditions. It must also specify the prices of the 25 most common services it offers.

Even before the new policy starts rolling out later this year, some Colorado hospitals have started converting these facilities. UCHealth has transformed nine over the past two years into primary or urgent care centers and one into a specialized center. It still has nine more in operation statewide.

The conversions were not prompted by state actions, according to Dan Weaver, a spokesperson for UCHealth, which is part of the University of Colorado. “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 specialist care services near them, ”Weaver said.

He added that the hospital system always insisted that people should use lower-cost services, including emergency care, primary care or virtual emergency care, outside of emergencies.

Ryan Westrom, chief financial officer for the Colorado Hospital Association, said hospitals have converted some of these centers to services such as emergency care in response to changes in insurance reimbursement and other factors. He said he was not sure many hospitals would accept payments from the state to shut down their stand-alone emergencies.

HealthONE, which has eight stand-alone ERs in the Denver area, said it has no plans to close any despite the state incentive payment.

Vivian Ho, a health economist at Rice University in Houston who has tracked the growth of these self-contained emergency rooms, applauded Colorado’s efforts.

But she fears hospitals will decide it’s not worth shutting down a stand-alone emergency department and losing profits: “You have to attack autonomous emergency services from multiple angles to get people to shut down. ‘get there and that hospitals do not use them as a means of generating additional income for care that can be delivered at low cost sites. “

Ho said the covid pandemic, which has dampened the demand for emergency care, and recent federal surprise billing legislation could hamper the growth of stand-alone emergencies.

They are already facing headwinds. Adeptus Health, the Texan company that led the trend there and launched dozens of stand-alone emergency rooms, often in conjunction with hospitals, filed for bankruptcy this year. And many free-standing facilities have closed at least temporarily during the pandemic, as demand for care has dropped dramatically.

Medicare advisers are also pushing back growth. A recent proposal from the Medicare Payment Advisory Board, which reports to Congress, would reduce Medicare payment rates by 30% on certain services at free-standing facilities located within 6 miles of an emergency room in an emergency room. hospital.

Based on a MedPAC analysis of five markets – Charlotte, North Carolina; Cincinnati; Dallas; Denver; and Jacksonville, Fla. – 75% of stand-alone facilities were within 10 km of a hospital with an emergency department. The average travel time to the nearest hospital was 10 minutes.


Markian Hawryluk, senior correspondent for KHN in Colorado, contributed to this article.

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Myra R.

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