$traight Talk Hot Topics. Free Standing EDs. Free Standing EDs 11/6/2017. David A. McKenzie, CAE ACEP Reimbursement Director

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1 Free Standing EDs $traight Talk Hot Topics Free Standing EDs David A. McKenzie, CAE ACEP Reimbursement Director CPT Definition for the use of : Organized hospital-based facility for the provision of unscheduled episodic services to patients who present for immediate attention. The facility must be available 24 hours a day. If the facility fails this definition typically then defined as an Urgent Care Impact revenue dramatically Typically no facility E/M New vs Established patient issue FEDERAL REGULATIONS 42 CFR (b) Definition of an ED Dedicated Emergency Department Any department or facility of the hospital, regardless of whether it is located on or off the main hospital campus, that meets at least one of the following requirements: Licensed by the state as an emergency department Held out to the public (by name, posted signs, etc.), as providing care for emergency medical conditions without requiring a scheduled appointment During the prior calendar year, 1/3 of the visits were for the treatment of emergency medical conditions without requiring a previously scheduled appointment. Free Standing EDs FSED: can perform essential functions of a hospital based ED except admit patients: Accepts EMS Blue hospital signs CT/MRI/US and Labs Plain X Rays State licensing issues Certificate of Need (CON) issues state by state Texas, Arizona good Michigan, Maryland, Virginia- Not so good Location, location, location.determines payer mix 1

First Issue: CON (Certificate of Need) Michigan Specific FSEDs States with a CON process require you to

objections Non Con states- land, build out, equipment lease bill both a professional and facility fee

all regulated services regardless of cost, while others such as South Carolina do not require CON approval

Can not simply build an ED in Michigan See Educational Appendix for more citations Free Standing

No Medicare or Medicaid participation Typically seek out Cadillac Insurance mix Facility Collections 2.

start up Large ED group or investor partnering Lots and Lots of FTEs and issues to manage Breakeven as low

2 First Issue: CON (Certificate of Need) Michigan Specific FSEDs States with a CON process require you to prove a community need for your proposed ED Extremely hard to overcome the local hospital system s objections Non Con states- land, build out, equipment lease bill both a professional and facility fee Roughly 12 patients per day to break even Michigan, requires providers to document the community need for all regulated services regardless of cost, while others such as South Carolina do not require CON approval for any project under certain cost thresholds. Can not simply build an ED in Michigan See Educational Appendix for more citations Free Standing Independently Owned Free Standing EDs Imperatives Bill both a pro and facility fee Frequently no EMTALA and No Medicare or Medicaid participation Typically seek out Cadillac Insurance mix Facility Collections times the pro side Single patient potentially generates $800 - $2000 Multimillion dollar build out and start up Large ED group or investor partnering Lots and Lots of FTEs and issues to manage Breakeven as low as 12 patients per day Healthcare reform, state reform, and insurance industry reform uncertainty Full Service 24/7 Operates as an ED Transfer agreements Referrals Market potential Volume and payer mix? 2

3 Independent Free Standing EDs: The Future Increased State regulation Texas (150 FSEDs) evolving legislations Equipment and service minimums Must stabilize and transfer emergencies 16 states have laws for FSEDs with varying requirements Delaware- 24 hours a day physician ownership OK Rhode Island open < 24 hours Idaho- must be owned by a hospital Might consider joining an established entity State specific research before taking the plunge! Hospital Owned FSED Hospital Owned Free Standing EDs Economics If hospital owned and fee for service possible to be profitable Need volume or a hospital stipend Typically 16k visits Sweet spot is 21k- single coverage plus PA Be aware of lower acuity If throughput focused can be a winner Type B Emergency Department Meets the definition of an Emergency Department Not open 24/7 Has EMTALA Obligations Professional codes and revenue similar Facility Revenue significant decrease Still falls under CON and conditions of participation 3

4 ACEP FEC Accreditation Task Force 2016 ACEP Council Resolution 9 ACEP FEC Accreditation Task Force RESOLVED, That ACEP explore the possibility of setting ACEP-endorsed minimum accreditation standards for freestanding emergency centers; and be it further RESOLVED, That ACEP explore the feasibility of ACEP serving as an accrediting (not licensing) entity for freestanding emergency centers, where they are allowed by state law. FEC Accreditation Task Force Recommendations Areas Under Consideration We recommend that ACEP implement an accreditation for Freestanding Emergency Centers (FECs). We have created a standard that can be used throughout the United States to do the following: Standardize an obtainable gold standard for FECs aspiring to achieve ACEP Accreditation. Establish protocols for FECs obtaining ACEP Accreditation related to staffing, laboratory and imaging services, documentation, quality improvement (QI), billing practicing, EMS integration, public education, signage, and ethics. Establishing a national set of standards for FECs that could be referred to as a unified national resource for legislators, insurers, and physicians Create standards for ACEP Accreditation that will be beneficial to patients, Emergency Physicians, and ACEP. State Regulations Emergency Medical Treatment and Labor Act (EMTALA) Staffing Laboratory and Pathology Services Imaging Emergency Medical Services (EMS) Documentation Quality Improvement Procedural Sedation Billing Public Education Business Ethics and Fair Practice Standards External Standards 4

Professional Component Reimbursement Documentation must support E/M level Modifiers are important so services are not bundled Pro fee and facility levels may not always match POS is required on

5 Professional Component Reimbursement Documentation must support E/M level Modifiers are important so services are not bundled Pro fee and facility levels may not always match POS is required on physician claims May be more than one (such as a hospital) Facility Component Out of Network No different than hospital facility billing Resource based billing (must support medical necessity) Modifiers are important (carrier specific) Appeals and denials usually prompted by non-emergent diagnosis Trends - Prudent lay person definition becoming difficult to win - Plans are writing into their policies that nonemergency diagnosis are not covered - Provisions of the plan prevail Negotiable Much higher appeal rate Require more billing resources Non-emergency diagnosis much harder to get paid Most are paying percentage of Medicare (100% - 150%) Usual and customary (not defined no standard) Balance billing (choice) Patient left with higher out-of-pocket responsibility Longer revenue cycle 5

6 Patient Perceptions Additional Resources Do not understand the difference between urgent care and ER Do not understand ER bills (facility fee) Patients do not understand their benefits Co-pay is all I have to pay Deductible Charges applied against deductible Co-insurance Short visit does not warrant charges for services provided National Association of Freestanding Emergency Centers ACEP FEC Section Thanks! Questions? dmckenzie@acep.org Educational Appendix 6

7 Federal Regs: Medicare Conditions of Participation State Level Regulations Emergency Services (42 CFR ) Services Organized Under Direction of Qualified Member of Medical Staff Services Integrated with Other Hospital Departments Policies and Procedures Established by and Ongoing Responsibility of Medical Staff Supervised by Qualified Member of Medical Staff Adequate Medical Staff and Nursing Personnel to Meet Written Emergency Procedures and Needs Anticipated by the Facility Accreditation: Same as Hospital and Joint Commission The big one: CON Facility Design, Operation and Maintenance Standards Equipment Standards Number and Qualification of Emergency Medical Personnel Including Having at Least One Board Certified Emergency Physician Present at All Times Provide Comprehensive Emergency Service Report Patient Transfers Submit Mortality Reports MI Public Health Code Act 368/1978 Section Except as otherwise provided in this part, a person shall not do any of the following without first obtaining a certificate of need: Acquire an existing health facility or begin operation of a health facility at a site that is not currently licensed for that type of health facility. Make a change in the bed capacity of a health facility. Initiate, replace, or expand a covered clinical service. (iii) Provide 24-hour emergency care services at that site. 7

Urgent Care Centers and Free-Standing Emergency Rooms: A Necessary Alternative under the ACA

Urgent Care Centers and Free-Standing Emergency Rooms: A Necessary Alternative under the ACA Kim Harvey Looney, Waller Lansden Dortch and Davis Mollie K. O Brien, Epstein Becker Green Jon Sundock, CareSpot