Free-standing ER business depends on patient confusion
seriously wrong with the business plan.
By that measure, free-standing emergency rooms require greater scrutiny. Because no one with the proper information would go near one of these supremely expensive walk-in clinics if they knew what it might cost them.
The core of the problem boils down to definitions and disclosures. And if you think you know what it means for an ER to “accept” your insurance, you’re probably wrong.
Free-standing ERs dot the suburbs, where census data tells physician-entrepreneurs that most residents have private insurance or Medicare. Operators also like to locate where people have a lot of money and little patience for waiting.
These for-profit ERs, which have no affiliations with hospitals, take advantage of the typical consumer’s ignorance
of the difference between an urgent care clinic, a free-standing ER and a hospital ER.
An urgent care center can and should handle most consumers’ immediate needs and charge only a little more than a doctor’s office. A hospital ER is focused on lifethreatening conditions and would really rather you go to an urgent care if possible.
Free-standing ERs don’t really want trauma cases; they want urgent care cases. Their parlor trick is equipping the clinic like an emergency room, which by law allows them to charge 20 times more than an urgent care for precisely the same treatment.
For example, an average person who cuts his or her hand while slicing his or her Sunday morning bagel has probably never thought about urgent care versus an ER. He or she is only thinking about the blood flowing out and wants to go to the nearest location with the shortest wait time.
A cut requiring stitches is the perfect example of the nearly 56 percent of emergency room visits that are not emergencies, according to the New England Health Institute. But if it’s your blood staining one of the good kitchen towels, you probably think it’s an emergency, not merely urgent.
Then the obfuscation truly begins.
Free-standing ERs love telling patients how they “accept all forms of insurance” because regulations require that insurance companies pay all ER bills. The ERs even display insurance company logos on the door.
Accepting insurance, though, is not the same as being in-network. Insurance companies are only required to pay in-network rates, which will undoubtedly be much less than what the ER bills. Too many patients do not realize they are liable for the difference until a surprise bill arrives, usually after the stitches have fallen out.
AARP Texas found that 77 percent of the state’s 215 free-standing ERs said they “take” or “accept” Blue Cross and Blue Shield insurance, but were out of network.
Free-standing ER operators promote this confusion, and they lobby lawmakers in Austin to keep you uninformed.
After thousands of complaints, the Texas Legislature passed a law in 2015 requiring facilities to post notices that they are not urgent care facilities. They must also declare whether they are in-network.
The free-standing ERs posted notices that said they accept insurance but didn’t list any networks because very few facilities are in a network.
Patients kept complaining, so lawmakers introduced a bipartisan bill last year requiring operators to post their facility fees and remove the logos of insurance companies unless they were in network. The bill would have also banned free-standing ERs from saying they “accept or participate” in a health insurer’s plan unless they were in network.
“We were able to amend those provisions out of this bill, and what is left is a simple modification to the posting notice,” industry representatives declared in a note to operators posted online.
The final bill only requires free-standing ERs to post: “The facility is not a participating provider in any health benefit plan provider network.”
When my colleague Jenny Deam checked 15 months later, she found that free-standing ERs still prominently advertise that they “accept” private insurance on websites, then bury the notice about being out of network in drop-down tabs.
Free-standing ERs have no legitimate excuse for failing to warn patients about the potential for receiving huge bills. Operators know they will balance bill because their business plan depends on it. But they also know if they were upfront about the costs, most patients would get their stitches at an urgent care instead.
Lawmakers will try to pass new disclosure laws next year, but until then patients should boycott free-standing ERs. At least until operators grow a conscience.