Freestanding ERs Target Suburbs, Rural Panel Told

Freestanding emergency departments (ED) have been proposed in Georgia as a potential solution for struggling rural hospitals, or newly closed ones, that want to remain operational in downsized form to help patients in need.

But the trend toward such standalone emergency rooms nationally is totally different from that picture, members of the Georgia Rural Hospital Stabilization Committee were told Monday.

Freestanding EDs are actually proliferating in suburban areas, targeting high-income patients who have private insurance, said Charles Horne of accounting firm Draffin & Tucker. The prevailing emphasis is on patient convenience, not need, he told committee members at a meeting in Cordele.

Earlier this year, Gov. Nathan Deal backed a change in state licensing rules that would permit a stand-alone emergency department and some other services in rural areas that have a financially ailing – or closed – hospital.

But so far, no organization has applied to create such a facility in the state.

Meanwhile, four rural hospitals have closed in the past two years in Georgia, and others are having severe financial problems.

One major drawback for freestanding EDs, as they are currently being proposed in Georgia, is that they would not be able to bill Medicare or Medicaid at the current hospital rates. They would have to bill those programs at a lower “provider’’ rate, or as a hospital outpatient clinic.

“As it is currently constituted, a freestanding ED would have great difficulty in solving the problems of rural health care because of reimbursement,’’ said Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in the state. Those freestanding EDs that are successful financially are in suburban areas and are run by large urban hospitals, Lewis added.

(Last year, a Georgia health agency denied Augusta hospitals a license to build a freestanding ER in Columbia County, an affluent area in the city’s suburbs. Now three Augusta hospital organizations are seeking to build a full-scale hospital in the county.)

Horne said that nationally, the freestanding ERs typically are located within 15 to 20 miles of a full-service hospital.

The number of such facilities has doubled to more than 400 in the past five years, thanks in part to hospital chains such as HCA.

They have been built in Southern states such as Florida, Alabama, Mississippi, Florida, North Carolina and South Carolina.

Horne said 86 percent of standalone emergency departments nationally are hospital-affiliated.

Gov. Deal told lawmakers in March that the kind of downsized hospital facility he envisioned could provide childbirth services and some kinds of elective surgery as well as the usual emergency room services.

Many rural hospitals have large numbers of uninsured patients, and have to absorb the costs of treating them.

That’s one of the reasons why such hospitals are struggling financially.

Experts say these hospitals would be helped by an expansion of Medicaid, as outlined under the Affordable Care Act. That would extend the government program’s coverage to many currently uninsured patients, which in turn would allow the hospitals to get reimbursement.

Beth Stephens, director of the Health Access Program at Georgia Watch, told GHN on Monday that rural hospitals “can’t sustain themselves financially because of all the uninsured patients coming into their ERs.”

Some rural hospital execs have said Medicaid expansion would boost their revenues.

The state’s political leaders, including the governor and top legislators, have rejected expansion, citing the costs to the state.