Surprise! Freestanding ERs Aren't Always What They Seem

Freestanding ERs have been around for years. But only recently have they become profit-focused, deceptive places of care.
by | July 12, 2016

Going to the hospital is rarely a pleasant experience. In the last few years, though, it's gotten a lot easier to visit an emergency room without ever setting foot in or near a hospital. Easier for some, at least.

Freestanding ERs have become a more popular alternative for some to hospital ERs. But while they're more convenient, they often leave patients with surprise medical bills and rarely improve health-care access for the people who need it most.

There are currently 360 freestanding ERs in the U.S. -- 60 percent of which are in Colorado, Ohio and Texas. Unlike most urgent care clinics, they're usually open 24/7 and have "emergency" in their titles. The first of them opened in the 1970s as a way to provide emergency care for areas that didn't have a hospital. But in the past decade, entrepreneurs have increasingly established freestanding ERs with a more profit-focused, free-market model of health care. In other words, while most older freestanding ERs accept insurance, many newer ones don't or aren't covered by popular networks.

A new study in the Annals of Emergency Medicine also found that most freestanding ERs are located in areas with more privately insured individuals -- people who, even if they were surprised by a bill, would be more likely to pay in full. 

“They are an extremely innovative model of care,” said Jeremiah Schuur, an emergency doctor and lead researcher on the study. “They’ve provided the components of emergency care, but without the big, complicated hospital system.  But the thing is, our health-care system isn’t really a free market. People think of emergency care as a public service. It is the one guaranteed health-care right given to us by law. But that’s simply not the case [with most] freestanding ERs."

This has been especially apparent in Texas, where 73 percent of all freestanding ERs are private, for-profit entities and the majority of out-of-network claims are filed from a freestanding ER, according to the Texas Association of Health Plans.

“They can be tricky. Many of them will tell a patient when they’re getting treatment that they accept insurance, but the patient gets a surprise bill down the line because they are out-of-network,” said Jamie Dudensing, executive director of Texas Association of Health Plans. “They are also typically nicer than your average ER, and it’s easier to get the care you want. They tend to cater to the consumer."

But that added convenience and luxury comes at a price. For example, getting treated at an urgent care clinic for an ear infection will generally run about $100. But at a freestanding ER, that same treatment could cost patients $760. 

SOURCE: Texas Association of Health Plans

State regulations surrounding freestanding ERs vary wildly.

California, for instance, has so many regulations that “when you add it all up, it basically requires them to just be a hospital,” said Schuur.

On the other hand, Colorado and Texas -- which hold most of the country's freestanding ERs -- essentially require just three things: an application, a fee and a transfer agreement with a local hospital. Ohio is a bit more stringent, requiring all freestanding ERs to be hospital-affiliated.

Texas, however, is cracking down on the increasingly for-profit industry. The state passed a law last year that requires freestanding ERs to make patients aware that physicians might not be in their health insurance network. And according to Dudensing, the state legislature is expected to take up more patient protection measures in its next session. The aim of future legislation, said Dudensing, is to increase transparency. She's confident that will happen.

“Consumers want easier access, and they want to be seen that day. It just so happens that the people who can do that are also the most expensive right now. It’s all very confusing for consumers, but with time and more laws, it’ll work itself out."

*This story has been updated.