A recent study published in the Annals of Emergency Medicine, which was conducted by Rice University and funded by Blue Cross Blue Shield, finds that freestanding emergency centers (FECs) are cheaper alternatives for emergency medical care than hospital-based emergency centers.

Outside of that critical finding, the study diverges on a less academic path to intentionally criticize the FEC model, misattributing or mischaracterizing data along the way.

The study wrongly compares FECs to urgent care facilities despite differing levels of service, even as the study’s own data shows that FECs are comparable to hospital-based ERs in every category. The study raises serious questions about the methodology and underlying biases that are evident in the findings and recommendations. The Texas Association of Freestanding Emergency Centers (TAFEC) seeks to address some of the flaws with the study’s methodology and conclusions.

Concerns with the Data

The most glaring problem with the study is that it relies on a data set from a single commercial insurer. This proprietary data from one single insurance company is not available to the public, and therefore cannot be substantiated by external review.

It is important to note that many insurance companies, including Blue Cross Blue Shield, own stake in urgent cares facilities, and thus would be further incentivized financially to discourage patients from seeking care in an emergency setting.

The study also raises questions about how the data was collected. Did the study adjust for patients who presented at an urgent care because they were instructed to by their insurance provider, and then transferred to an ER because they needed a higher level of care? This would certainly skew the data to make it appear as though urgent care facilities can handle higher acuity patients than what their capabilities allow.

The data shows there was evident overlap in “final diagnosis,” not just for FECs, rather all emergency department, when compared to urgent care facilities. But a physician can only determine a final diagnosis after examining the patient and ordering what is judged to medically necessary, often at a much different cost than urgent care facilities because of higher acuity (or severity of an injury or illness) and medical complexity of the patients.

The medical care required to get to that diagnosis is often not available at urgent cares for more complex patients. TAFEC data shows that 90 percent of visits to FECs are acuity Level 3 or higher, while urgent care is primarily Level 1 or 2 visits. The amount of actual overlap in presenting symptoms between emergency departments and urgent care facilities was not the actual outcome of the study, and thus cannot be answered solely by the data referenced in this study.

What seems to indicate the most bias against the FEC model is the authors’ recommendations that share no correlation to the data collected, and are based on context unrelated to the study findings. The authors recommend that only FECs post minimum and maximum physician and facility charges a patient would experience per visit. Posting fees in an emergency setting is a direct violation of state and federal law that prohibits emergency care providers from discussing the price of emergency care before offering a medical screening to patients. It is also impossible to do without diagnosing the injury or illness. Which begs the question, why would the authors not apply that same standard to hospital-based ERs?

The simple fact that BCBS provided significant funding for a study authored by historically vocal opponents of the FEC industry, calls into question the academic integrity of the entire process.

Acuity Rates

Acuity levels between FECs and hospital-based ERs were found to be very comparable. The average acuity in 2015 for FECs is actually higher than hospital-based ERs for facility bills.

According to the article, 17 of the 20 most common diagnosis treated at hospital-based ERs were also in the top 20 for FECs. With only a small percent difference between FECs and hospital-based ERs, it is difficult to justify accusations that FECs are taking advantage of confused patients.

Billed Charges

The data from this study indicates that FEC billed charges – the lone factor that emergency care providers actually control – are less than that of a hospital-based ER. This alone is a glaring contradiction to the narrative that the health plans have tried so desperately to share: FECs are remaining out-of-network so they can bill higher rates and collect more money from patients. Now that the health plans have proven this argument to be patently false, let’s move on to other intentional misrepresentations applied to the FEC industry by health insurers.

For instance, why do the authors of this study compare FECs prices to urgent care prices in their summary, despite vastly different levels of service and capabilities? Based on the acuity rates listed in the study, the only real comparison is to hospital-based ERs – and the authors of the study certainly know this to be true.

Overstated Confusion

Vivian Ho has been a vocal opponent of FECs for years, and it’s true that when the industry was in its earliest stages there was certainly room for improvement. Patients were confused by this new model and there was a need for increased education and transparency. However, the industry has changed since it was licensed seven years ago, and the confusion today is significantly and strategically overstated by opponents.

The data presented in the study indicates the acuity levels of FECs are on this rise, with less 1, 2, and 3 acuity levels, and more 4 and 5 level patients. This indicates that transparency regulations, education efforts, and community outreach by FEC providers are working and confusion about the model has subsided.

In 2015, the Texas Legislature passed SB 425, which significantly boosted FEC transparency through increased signage and postings for patients. After passage of SB 425, the Department of State Health Services testified at a Senate interim hearing saying the following: “Last session, you all passed a bill that the facilities have to post their disclosures at the entrance, in the treatment rooms, and again at the discharge area. Once that happened, our complaint line, the complaints that we get in terms of billing at freestandings has decreased remarkably. So the patients know what’s going on, what’s happening to them, and they have not found it necessary to complain to the department anymore about the billings that they’ve been getting. I think we’ve gotten maybe two since that law was passed.”

Access to Emergency Care

We cannot increase access to care in the state of Texas without increasing utilization. That’s a simple fact. Overcrowded hospitals, many of which are failing financially and closing their doors, do not have the capacity to see and treat all patients with medical emergencies.

All emergency care providers, FECs and hospital-based ERs alike, would say that if an injury can wait until seeing a PCP or an urgent care facility, it would certainly be cheaper for patients to utilize those facilities instead of the ER.

Primary care physicians and urgent care facilities are not open 24/7/365 and often require appointments. The ER is where patients go when they have no other option. Both FECs and hospital-based ERs would agree that a majority of their patient visits occur outside of regular business hours.

Health plans do not want to increase access to care, despite Texas ranking 47th overall for timely access to care. They would rather steer you to cheaper urgent care facilities to save them money.

The reality is that many of these patients are presenting with truly emergent symptoms. Chest pain could indicate a heart attack, or it may simply be indigestion. At 2:00 AM when a child is having trouble breathing, what parent would not consider it an emergency and take their kid to the ER? Insurance companies are punishing patients and processing claims based on final diagnosis instead of presenting symptoms. This is illegal and violates the prudent layperson standard – a state law enacted to protect patients in the event of what they consider to be a medical emergency.


The problems with the Rice University study are serious and many. The limited amount of data and how it was collected, the BCBS funding source, the questionable involvement of BCBS and other opponents of FECs, the flawed processes and contradictory conclusions – all indicate an underlying bias and methodology designed to reach a predetermined result. Unfortunately, these are merely the highlights.

However, the study does reach notable findings that should be reiterated. The data shows definitively that FECs are cheaper alternatives to hospital-based emergency rooms for emergency services.

It also indicates that FEC acuity is comparable to hospital-based ER acuity, and that the acuity rate is trending toward higher acuity patients with more severe injuries and illnesses.

Lastly, the study’s primary finding is that emergency care is more expensive that non-emergent care – something we have all known for a very long time. Emergency care facilities are required to be open 24/7, 365 days a year. Emergency rooms are required to have a trained ER physician and registered nurse at all times, and must maintain state of the art equipment, which enables staff to quickly diagnose and treat a medical emergency. ERs have laboratory and radiology equipment, including CT scanners, ultrasounds, and x-ray machines. Urgent care clinics are not required to meet these same standards.

Neither hospital-based ERs nor FECs would argue to be cheaper than urgent care facilities and primary care physicians, because both emergency facility types provide real emergency medical care. FECs and hospital-based ERs have much higher capabilities and levels of service when compared to urgent care facilities, and those capabilities are reflected in the price. The study is nothing more than an intentional and misguided attempt to liken FECs to urgent care clinics by comparing apples to oranges.

There are many other issues to address with this study than what has been presented here. If you have any questions or would like more information, please reach out to our media contact listed below.

Media Contact:
Jarred Gammon
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