Around the country, lawmakers, health insurers, and healthcare providers are attempting to address rising healthcare costs. While many factors contribute to this problem, among the most discussed are surprise billing and out-of-network healthcare. But much of what we hear about these issues is misleading, particularly when it comes from insurance companies, who attempt to blame rising healthcare costs on freestanding emergency centers (FECs).
In Texas, there are more than 325 FECs in operation. Their popularity is a testament to free market principles that have introduced much needed competition, resulting in increased access to care and convenience in the form of reduced wait times and a more dignified care environment compared to traditional hospital ERs.
But as the FEC industry has grown, so has the amount of misinformation from the insurance industry.
A common example is the claim that FECs choose to remain out-of-network to increase profits. FECs welcome the opportunity to contract with insurance companies. But when FECs attempt to negotiate network status, they are often denied outright. Even when they are offered in-network status, it is usually at rates considerably lower than those offered to other licensed emergency facilities.
The real issue, and what ultimately hurts consumers, is predatory underpayment by insurers to providers, along with unreasonably high deductibles that allow insurers to shift costs to consumers. According to the Kaiser Family Foundation, in the past five years, deductibles have increased more than 60 percent and insurance premiums have risen nearly 20 percent. Meanwhile, over that same span, inflation was at only six percent.
By keeping FECs out-of-network, providing predatorily low reimbursement rates, and increasing deductibles and coinsurance, insurance companies are increasing profits by limiting access to care and shifting an historic level of healthcare cost to patients.
Likewise, confusion around surprise bills can be attributed to insurance companies’ extremely misleading narrative concerning network status for emergency care. According to state and federal law, insurers in Texas are required to pay full in-network benefits for emergency care at every licensed ER in the state, regardless of whether that ER is contracted with the insurer.
Despite that requirement, insurers frequently process FEC claims at out-of-network rates. This prevents policyholders from accessing the coverage they pay for, often resulting in higher patient responsibility – in other words, a surprise bill.
While insurance companies would have us believe that the “surprise” in your bill is due to increased “billing” by providers, the reality is that it is nothing more than decreased coverage.
Insures also falsely claim that FECs try to confuse patients about what kind of services they offer. In Texas, FECs are required by law to post signage on buildings and in waiting rooms and patient rooms making it clear to patients that they are in an emergency facility. Written acknowledgement from patients must also be obtained. Since that law went into effect, the Texas Department of State Health Services has testified that patient confusion has declined and the Texas Department of Insurance has testified that insurance coverage complaints have decreased.
FECs play an important role in increasing access to emergency care, an area in which our state performs poorly, ranking fifth worst in the country in a recent report card by the American College of Emergency Physicians. By providing consumers with an additional access point for emergency care, FECs help relieve pressure on hospital ERs. FECs also admit patients at a much lower rate than hospital ERs, saving tens of thousands of dollars in downstream medical expenses for every inpatient hospital admittance avoided.
Let’s not let insurance companies derail this innovative emergency care model through misinformation and shady tactics that increase their profits while jeopardizing access to emergency care for millions of Texans. Tell your state lawmakers to support efforts to increase transparency and oversight of the insurance industry and to encourage innovations like FECs that use free market principles to drive up the quality of care while reducing cost through competition.
Dr. Andy Wilson, MD FAAEM, is Board Certified in Emergency Medicine and is Managing Partner at CapRock ER in College Station. Dr. Wilson also serves as the Associate Medical Director for the Bryan SWAT Team and Associate Medical Director for the TEEX Paramedic Academy, and is an Assistant Clinical Professor of Emergency Medicine in the Texas A&M College of Medicine.