State of the Nation: Policy for Owning and Operating a Freestanding Emergency Department

posted in: Issue #2 | 1

By Kate Walker, GLS (Grad Student at Large)    

Henry Higgins, MD

 

Two factors determine who may own and operate Free-Standing Emergency Departments. Both of these factors are determined by the State in which the Free-Standing ED is located. The States determine

  1. If they require a Certificate Of Need (CON). States with CON laws make it impossible for anyone other than a very well connected & wealthy health system to surpass the hurdles of CON in order to build any type of health facility. This entitles the large health systems to continue to monopolize all care in the State and greatly reduces patient’s access to care (as well as patient’s choices)

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  1. The other State determined factor is what type of legal entity may own and operate a Free-Standing ED. Different States have different rules regarding who may own and operate a Free-Standing ED. Some States like Colorado and Texas specify that a physician or hospital must be the owner. Other States specify that only a hospital may own and operate a Free-Standing ED. Many States have not yet specified who may own and operate a Free-Standing ED.

The purpose of this article is to show the current requirements of Free-Standing ED ownership for every State in the US. Since much of this information is not readily available from public records we chose to contact each States Health Department and ask what these requirements were.

State Governments use their local authority to determine the ownership qualifications of Free Standing (FSED, FEC) or Standalone emergency centers (SEC). Different states have a variety of different primary influencers of their health care policy. As a result of these different influencers different ownership qualifications for FSEDS exist in many states. This difference in ownership qualifications has profoundly impacted the development and lack of development of FSEDs in different parts of the country.

 

Methods

Our research team contacted every state healthcare regulatory and licensing agency in the United States. Many of our researchers became surprised to find that a many of these state agencies did not know what their own rules were for ownership and licensure for FSEDs. The simple question regarding ownership of FSEDs was frequently met with ambiguity and our research team was required to play “phone tag” with message machines to reach someone who knew what they were talking about. This persistence by our researchers did yield some more answers. After exhaustive efforts in calling and emailing, a total of 17 state healthcare regulatory and licensing agencies still did not respond to our inquiries.

The states healthcare regulatory and licensing agencies were asked to respond to the following two questions:

  • “Who can own and operate a Freestanding Emergency Department?”
  • “Must the Freestanding Emergency Department remain open 24/7?”

The information collected is found below in two formats. The first is in map form that depicts the information graphically. This allows for examination of any spatial patterns as well as allowing a visual representation of the data. The second is a table that includes the responses received from the states as well as the corresponding category that serves as the classes in the map layout.

 

Discussion of Results

As shown in the images, Colorado, Delaware, Hawaii, and Texas are the only States that do not restrict the ownership of FSEDs. In cross checking the states responses with known Certificate of Need (CON) laws that exist in these states it appears that both Delaware and Hawaii may require a Certificate of Need to be established for FSED development. The author of this article is not aware of any FSED development that has yet occurred in either Delaware or Hawaii and therefore if a Certificate of Need will be required is not yet known.

One must note that there are other hurtles that may result in restrictions that deter the construction of FSEDs. Many hospital monopoly systems feel a greatly threatened by FSEDs because individually owned FSEDs make it harder for the monopoly systems to control where patients become admitted to the hospital. These large hospital systems have significant power and can afford to have many lobbyists working to further their interests. An example of this is the recent political battles in Colorado Sponsored by Democratic Senator Irene Aguilar of Colorado focusing on the disallowing the physician ownership of FSEDs and if they should continue to exist within the State. The State of Colorado chose to vote against Senator Aguilar’s proposed bill and continue to allow FSEDs to be owned and operated by physicians. Even though there are extenuating circumstances one must take into account, the reality that 4 States out of 50 allow FSEDs to exist without restricting who can own and operate one is a very low ratio and, as a result, the construction of individually owned FSEDs has been severely hampered. The political hurtles have greatly reduced the construction of FSEDs outside of Texas and Colorado. This has subsequently reduced the access to emergency care for many patients in states other than Colorado or Texas.

As it was for physician owned ambulatory surgical centers the physician owned FSEDs have been shown to offer extremely high value for patients and physicians alike. As it was with ambulatory care centers the monopoly stake holders have been attacking the physician owned FSEDs trying to keep them from developing. As it was with physician owned ambulatory care centers the physician owned FSED appears to be winning this war. The consumer will be the biggest winners as physician owned FSEDs slowly win these battles because consumers will then be able to choose where they seek emergency care. These choices will drive competition and quality up. These free market principles will ultimately greatly heighten the practice of emergency care while driving the cost down.

A majority of the responding States do allow for satellite emergency departments that are owned by hospitals; usually this type of ED comes with the stipulation that it is within 35 miles of it’s “Parent Hospital” (this can vary if the State regulations stipulate a smaller range). These 35 mile stipulations have hindered the growth of FSEDs in rural areas where they are likely needed the most. The only feasible reason that the 35 mile rule exists is as a result of a hospital system attempting to keep some other competitor off their “turf”. The unfortunate side effect of hospitals attempting to protect their turf is a severe lack of access to emergency care for rural americans.

New Mexico is one of the more confusing States due to the obscurity of their answer. There are satellite EDs within the State but those are considered to be a part of the “Parent Hospital” and not an ED in their own right. There is nothing in the policy that restricts an individual to construct and operate a FSED but they would have to be licensed as a hospital and fulfill all the requirements that lay therein. However, the definition of a hospital within New Mexico is, in part, “offering in patient services, nursing, overnight care on a 24 hour basis with services for at least 3 or more separate individuals”(this is very similar to how CMS defines hospitals and therefore recognizes them as facilities). In short, FSEDs are allowed within New Mexico…but they would be considered a hospital and not a FSED and must function as a hospital.

There are a handful of States that do not allow for FSEDs in any form they may take. If there is an ED, it is attached to a hospital. Some States did note that this was because there was no need for satellite medical centers; the hospitals are sufficient for their needs. This attitude does not assist in promoting the possibility of FSEDs in these particular States. We are very curious if the patients in these states share this opinion.

There are 3 States, Alaska, Nevada, and Wyoming who, as of July 2014, did not have a policy regarding FSEDs. It is unknown whether or not this will change in the foreseeable future. Hopefully they do not follow in the footsteps of the previously mentioned States and forbid the existence of FSEDs. Of these states Wyoming is the only state that is devoid of CON laws. So it may be far easier to build a physician owned FSED in Wyoming. Given the many rural areas within Wyoming FSED development here may greatly enhance rural patient’s access to emergency care.

Figure 1

Air Embolism2

As for the second question regarding whether an ED is required to be open 24/7, it was by and large a yes. If the State allows for satellite or individually owned EDs, then it is required to be open 24 hours a day, 7 days a week with the sole exception of New Hampshire. NH allows for shortened hours so long as the hours are posted and there are directions to the nearest receiving ED.

Figure 2

Air Embolism2

Note: The “N/A” category contains multiple circumstances within it that result in an answer being not applicable. An answer of “No Policy” or “No Licenses Given” to the first question results in a moot answer to the second. Also, if there was no response given from the Health Department request then it also was put under the “N/A” category.

The information collected shows the current state of the Nation when it comes to Freestanding Emergency Departments. While the information shows a more negative opinion, the right of the people to own and operate FSEDs has been supported in a few States. It is the author’s hope that the trend begins to allow for more States to become supportive of physician owned FSEDs and, optimistically, start a change within the US system of Health Care that will allow free market principles to improve access to emergency care and lower it’s cost.

Table: Responses from Each State

State Response
Alabama ——
Alaska  

“There are no Free-Standing EDs in our state. We currently have no jurisdiction over who can build, own or operate a Free-Standing ED in our state. Since there are no Free-Standing EDs in our state there are no current regulations or requirements.”

 

Arizona ——
 

Arkansas

 

“Arkansas does not license free standing( not part of the a hospital) emergency departments [sic]”

California  

“Stand-alone emergency departments are not permitted in California. Emergency services are provided under a General Acute Care Hospital (GACH) license as a supplemental service.”

Colorado  

“Our regulations allow for a variety of business entities to own and operate free-standing emergency departments including -sole proprietors, partnerships, limited liability companies, non-profit corporations and for-profit corporations.”

 

Connecticut

 

No available licensure for non-hospital affiliated EDs

Delaware “2.1 No person shall establish, conduct or maintain in this State any Free Standing Emergency Center without first obtaining a license from the Division of Public Health”
 

Florida

 

Q1 “Hospitals” Q2 “Yes”

 

Georgia

 

——

Hawaii  

“No restrictions but there are 12 criteria that have to be met. They can be found on the Health website”

Idaho  

“A freestanding emergency department (FSED) means a facility that provides emergency services twenty-four (24) hours per day, seven (7) days per week on an outpatient basis, is physically separate from a hospital, and meets the staffing and service requirements of Section 376 of these rules. A FSED is located within thirty-five (35) miles of the hospital that owns or controls it. An FSED is owned by a hospital with a dedicated emergency department that also meets the staffing and service requirements found in Section 376 of these rules.”

 

Illinois

 

——

 

Indiana

 

——

 

Iowa

 

——

 

Kansas

 

——

 

Kentucky

 

——

 

Louisiana

 

“Free standing EDs are not allowed in the state of Louisiana. Hospitals can open offsite campuses with EDs.”

 

Maine

 

“Maine law and regulation does not authorize the licensure of free standing emergency departments.”

Maryland  

“They are a CON program and must be affiliated with a licensed and certified hospital. They must be opened 24 hours. Our ‘regs’ are COMAR 10.07.08 [sic]”

 

Massachusetts

 

——

 

Michigan

 

——

 

Minnesota

 

——

 

Mississippi

 

“The PFED shall be a solely provider-based unit of a licensed Mississippi acute care hospital and comply with all applicable Medicare provider-based regulations.”

 

Missouri

 

“Missouri does not allow free standing Emergency Departments.”

 

Montana

 

——

Nebraska  

“We do not license or have any Free-Standing Emergency Departments in Nebraska.”

Nevada  

“Nevada has not defined so called “Free-Standing Emergency Departments” within the chapter 449 statutes or regulations.  However, we have recently received several inquiries regarding operation of such facilities.  Some of those inquiries were from existing hospitals and others were from independent entities desiring information.  For the former (hospitals) Nevada has entertained the possibility of off-campus hospital departments, although there are more questions than answers regarding the same;  such as how transportation to the hospital would occur whenever an inpatient admission is necessary.  For the latter (independent entities) there’s nothing within Nevada’s laws/regulations that would allow for licensure of a “free standing ED”.  Likewise CMS doesn’t have a certification category for this type of setting.
Nevada has defined Independent Center for Emergency Medical Care at NRS 449.013 (reference below).  However, this definition was intended for rural communities and in fact NAC 449.61302 indicates such a facility must be more than 30 minutes away from a facility licensed to provide a higher level of care (reference below).
NRS 449.013  “Independent center for emergency medical care” defined.  “Independent center for emergency medical care” means a facility, structurally separate and distinct from a hospital, which provides limited services for the treatment of a medical emergency.
NAC 449.61302  Limitations on issuance of license.  The Division shall not issue a license to operate an independent center for emergency medical care unless the center:
1.  Is located more than 30 minutes by ground transportation from a facility which is licensed to provide a higher level of emergency medical care; and
2.  Routinely provides limited emergency medical care or holds itself out to the general public as a facility which provides limited emergency medical care”

New Hampshire  

“(1) Each FHEF shall be owned and operated by a licensed parent general hospital, that participates in Medicare;… (i) The FHEF shall offer comprehensive emergency care at least 16 hours a day unless transportation time to a fully staffed hospital emergency center is greater than 30 minutes, in which case the FHEF shall be open 24 hours a day.”

 

New Jersey

 

——

 

New Mexico

 

“In New Mexico, we have no specific licensure category for emergency units. What we do have is licensure for hospitals. In essence, a freestanding emergency facility in NM would be required to become licensed as a hospital. Hospital, in our description, means a facility offering in patient services, nursing, overnight care on a 24 hour basis with services for at least 3 or more separate individuals.

New York  

“Off-Campus Emergency Departments are allowed in New York State provided they are integrated with a full-service hospital.

 

North Carolina

 

“There is no state licensure category for a freestanding ED in North Carolina.  Several hospitals in the state have off campus emergency departments that are owned, operated and affiliated with a licensed hospital.  The off campus EDs should operate within the same parameters of the emergency department on the main hospital campus.”

 

North Dakota

 

“North Dakota law does not permit an emergency room that is not affiliated with a licensed hospital to accept patients; as part of the State trauma program.”

 

Ohio

 

——

 

Oklahoma

 

“There is no such licensure or designation as a Free-Standing Emergency Department in Oklahoma. All emergency departments must be part of a Hospital.”

 

Oregon

 

“Oregon does not license free standing EDs. We do have many urgent care clinics, some licensed under hospitals, and others are not licensed and thus fall under the oversight of the professional boards of the licensed individual practitioners.”

 

Pennsylvania

 

——

 

Rhode Island

 

——

 

South Carolina

 

——

 

South Dakota

 

“South Dakota currently does not recognize free standing Emergency Departments as a type of licensed health care facility, therefore we currently do not have any regulations specific to this provider type and there are none operating within the state. [sic]”

 

Tennessee

 

——

 

Texas

 

“There are no restrictions on who can build, own, or operate a freestanding emergency medical care facility. Yes, effective September 1, 2013, all freestanding emergency medical care facilities were required to remain open 24 hours a day.”

 

Utah

 

“Our State does not have that licensing category so you cannot license an emergency. You can open a satellite hospital as a freestanding emergency room but it is really not freestanding room, but is really freestanding; it is just a satellite of the hospital. If it was licensed as part of the hospital and emergency room, it would be required to be open 24 hours a day.”

Vermont  

“Your question was referred to me because I am the Director of Hospital Licensing. Vermont does not have rules specific to “Freestanding Emergency Departments.” There are laws and rules regarding the licensing of hospitals, but those requirements only apply to facilities that have in-patient beds. While licensing is not required, I believe that Vermont’s Certificate of Need process might apply, depending on the circumstances. That process is described in Title 18, Chapter 221 of the Vermont Statutes Annotated. You can find the law here: http://www.leg.state.vt.us/statutes/sections.cfm?Title=18&Chapter=221 .”

 

Virginia

 

——

 

Washington

 

“Washington doesn’t have a separate license category for free-standing emergency departments, and only licensed hospitals can run a free-standing emergency department. So you couldn’t come in and get a “free standing emergency services” license. There’s no such license in Washington. Also, the law requires that general hospitals be able to perform triage and medical screening exams 24/7 hours a day.”

 

West Virginia

 

——

Wisconsin  

“A hospital that is currently approved/licensed in Wisconsin is eligible to submit an application to the Department of Health Services for a satellite emergency location also referred to as a freestanding emergency department.”   “Yes, in Wisconsin a freestanding emergency department is required to be open 24 hours a day, seven days a week.”

 

Wyoming

 

——



One Response

  1. this is a very helpful article – have you done any further research and made any updates to it recently you could share with me.

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