Resolution 11(16) CMS Recognition of Independently Licensed FECs
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Resolution 11(16) CMS Recognition of Independently Licensed FECs
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RESOLUTION: 11(16)
SUBMITTED BY: Texas College of Emergency Physicians
SUBJECT: CMS Recognition of Independently Licensed Freestanding Emergency Centers
PURPOSE: Engage in a campaign to lobby the AMA, MedPAC, and CMS to recommend or change rules to include FSECs in Medicare rules.
FISCAL IMPACT: Budgeted committee and staff resources and travel to attend meetings.
Resolution 11(16) CMS Recognition of Independently Licensed FECs
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WHEREAS, Independently owned and operated Freestanding Emergency Centers exist in Texas, Colorado, and soon in Rhode Island that are licensed by their respective states to provide emergency care that is similar in quality to hospital based ER care; and
WHEREAS, The ACEP report card has shown that many states have poor access to emergency medical care; and
WHEREAS, One of the criticisms of such facilities is often “refusing to take Medicare and Medicaid” and news articles, and even most recently a published article in Annals of Emergency Medicine, fault such facilities for not being in “areas of high concentrations of Medicaid” when those patients offer zero reimbursement and, therefore, it is fiscally impossible for such a facility to survive in areas of high concentration of CMS dollars; and
WHEREAS, Their growth likely would shift to the rural markets, where sometimes ER care is the most limited, but currently is very hindered since there are demographics largely of CMS reimbursement; therefore be it
RESOLVED, That ACEP lobby to MedPAC and CMS that all licensed emergency centers, regardless of being hospital based or independent, be subject to the same regulations and payment for the technical component of care provided; and be it further
RESOLVED, That ACEP suggest the AMA lobby MedPAC and CMS that all licensed emergency centers, regardless of being hospital based or independent, be subject to the same regulations and payment for the technical component of care provided.
Resolution 11(16) CMS Recognition of Independently Licensed FECs
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Background
This resolution directs ACEP to lobby MedPAC and CMS to expand Medicare and Medicaid coverage and payment rules to freestanding emergency departments (FSEDs), particularly as they pertain to the technical (facility) component of Medicare payment and urge the AMA to do the same.
MedPAC maintains a research staff that conducts fairly rigorous analyses of Medicare payment issues, which the Commissioners debate in public forums, vote, and make recommendations to Congress at least once per year. The Commission does not have authority to change statutory language, but can and does recommend that Congress do so. Likewise, CMS may declare that it has no authority to change what it determines to require a change in the statute, so it is not clear what would need to change to include FSEDs that currently do not meet certain provisions included in the Medicare law.
Under current rules, the only FSEDs that are Medicare providers for the purposes of coverage and payment are those that are “provider-based.” A series of criteria must be met to be provider-based including: having the same governing body, a fully integrated finance system, and holds itself out to the public as a department of the main provider. Often, the provider-based entity bills Medicare using the same provider number as well (42 CFR 413.65).
The situation of non-provider-based FSEDs is analogous to the history of ambulatory surgical centers (ASCs), some of which were operated by hospitals, i.e. provider-based, and many more that were owned by groups of physicians. Because there was no regulatory authority to pay them through the Medicare program, like today’s FSEDs, a legislative fix was required. This occurred through the Omnibus Reconciliation Act of 1980 (P.L. 96-499; 42 U.S.C. 13951(i). The story on how ASCs were included in this law included a political quid pro quo. ASCs would be eligible providers in the Medicare program, but paid significantly less then hospital outpatient departments. This precedent continues today. It took two years after the statute passed before CMS (then known as HCFA) was able to develop regulations for provider enrollment and payment which involved creation of a dedicated fee schedule and payment began in 1982. ASC physician services are billed under the Medicare Physician Fee Schedule and the group that owns the ASC generally shares the facility revenue. While ASCs have continued to grow – there were 5,400 by 2014 – the payment continues to lag behind the Hospital Outpatient Prospective Payment System (OPPS). The ASC conversion factor for 2016 is $44.18, while the OPPS conversion factor is $73.73, reflecting the legacy of the original political deal struck in 1980 and various studies (GAO, health services researchers) showing lower costs of ASCs compared to hospitals. Further, ASC payment updates are tied to changes in the Consumer Price Index (Urban) while OPPS is based on hospital cost report data. ASCs have been resistant to providing cost data to CMS, so the program has no other data to use. This could be a factor in independent FSEDs as well.
In its annual report to Congress for 2016, MedPAC recommended that ASCs receive a 0% update for 2017, citing adequate supply and no problems with beneficiary access. MedPAC also noted that only 13% of patients who use ASCs are enrolled in Medicaid and that 87% of ASC patients are white. Likewise, since MedPAC always has beneficiary access as one of its major issues, Commissioners made note during the discussion of FSEDs in September 2015 (using maps and graphs shared publically), that FSEDs are not improving beneficiary access to date given their predominant locations in affluent suburban areas.
Regardless of the current environment, any organized group of FSEDs, through ACEP or the FSED Association, or individual FSED companies can take their case to: 1) CMS to better understand the regulators’ position on whether they believe they have the authority to make such a change; 2) to MedPAC, which is interested in FSEDs; and 3) to their Congressional delegations if it is determined that a change in the law would be required.
ACEP Strategic Plan Reference
Reform and Improve the Delivery System for Acute Care
Fiscal Impact
Budgeted committee and staff resources and travel expenses.
Prior Council Action
Substitute Resolution 23(12) Free-Standing Emergency Departments adopted. Directed ACEP to study the emergence and proliferation of free-standing EDs and facilities including: applicable federal and state regulatory and accreditation issues; the potential impact on the emergency medicine workforce; the potential fiscal impact on hospital-based EDs; and provide informational resources to the membership.
Substitute Resolution 51(84) Advertising and Public Education of Free-standing Facilities adopted. Called for ACEP to encourage physicians and health care providers and facilities to emphasize in advertising their own positive attributes rather than to denigrate the capabilities of other providers or facilities.
Substitute Resolution 40(79) Hospital and Freestanding Emergency Care Facilities adopted. Called for ACEP to set standards of care for facilities that present themselves to be sources of emergency care.
Prior Board Action
June 2014, approved the policy statement, “Freestanding Emergency Departments.”
Substitute Resolution 23(12) Free-Standing Emergency Departments adopted.
August 2009, reviewed the information paper “Freestanding Emergency Departments.”
Substitute Resolution 51(84) Advertising and Public Education of Free-standing Facilities adopted.
Substitute Resolution 40(79) Hospital and Freestanding Emergency Care Facilities adopted.
Background Information Prepared by: Barbara Tomar
Federal Affairs Director
Reviewed by: James Cusick, MD, FACEP, Speaker
John McManus, MD, FACEP, Vice Speaker
Dean Wilkerson, JD, MBA, CAE, Council Secretary and Executive Director