Freestanding ERs Challenge Regulation, Accusations Of Price Gouging

May 10, 2017

Legislation making its way through the Texas Legislature could impose new regulations on freestanding emergency rooms in the state.

These ERs, which are not located inside hospitals, are often confused with urgent care centers. The latter are meant to provide care to people who don’t appear to have life-threatening medical issues, while freestanding ERs are meant to care for patients who would normally show up at an ER in a hospital (though not trauma cases).

Consumer advocates say freestanding ERs are expensive and care is often not covered by insurance plans. They're backing legislation that would require these ERs to be more transparent about patient costs and insurance coverage. They also support legislation that would expand mediation requirements to the ERs.

Representatives for freestanding ERs say they are improving access to emergency care. At a press conference at the Texas Capitol on Tuesday, a group of doctors went up against health insurance companies.

“Insurance companies are trying to pull off a giant scam, to confuse and mislead Texans, the media, our patients and our politicians,” said Dr. Gillian Schmitz, a physician at Full Spectrum Emergency Room, which sits outside a Bass Pro Shop in San Antonio. “They are trying to push their own political agenda and disguise it as legislation, and we think this is egregious.”

A study from Rice University, however, found that these ERs are confusing people who think they are going to an urgent care center, and patients often end up getting charged a lot of money.

Blake Hutson with Texas AARP keeps an eye on surprise medical billing. He said this comes up a lot in Texas.

“One guy we talked to, he went in for a tennis ball to the eye and they actually couldn’t help him in the freestanding ER,” he said. “He had to go to get follow-up care from an ophthalmologist but [the ER] billed him for about $6,000. The insurance company paid $4,000, and they still balanced billed him for the other $2,000.”

The insurance company did pitch in in this case, Hutson said, but a lot of times they don’t.

Freestanding ER folks said that’s because insurance companies only care about profits.

Jamie Dundensing with the Texas Association of Health Plans piped-in during the press conference to say insurance companies are worried freestanding ERs are “price-gouging Texans and driving up health care costs.”

“I think there's plenty of blame to go around on this issue,” Hutson said. “Insurers want to pay one thing; providers want to pay another. And that’s a fight, which is why we have a mediation system in Texas that will help resolve that.”

One bill before lawmakers would bring freestanding ERs under this mediation process. Dr. Mike Magoon, who partially owns two freestanding ERs in Texas, said he’s not opposed to billing mediation.

“But this may be a delay tactic,” he said. “Those mediation requests take months to resolve.”

Like regular hospitals, freestanding ERs charge facility fees, which also drive up costs. And when it comes to improving access to emergency care in Texas, Hutson said, so far these freestanding ERs have opened mostly where there are already hospitals — not in underserved rural areas.

Correction: This story initially implied hospitals do not charge facility fees. They do.