American Hospital Association balks at proposal to slash Medicare payments to standalone emergency departments

A lighted emergency room sign outside of a hospital
A draft recommendation from the Medicare Payment Advisory Committee, or MedPAC, would reduce payments for standalone emergency departments. (Getty/MJFelt)

Access to emergency services in vulnerable urban communities could be threatened if recommendations by the Medicare Payment Advisory Committee gain traction, the American Hospital Association said this week.

At issue is a draft recommendation made during MedPAC's meeting in March to reduce payments for standalone emergency departments located within six miles of an on-campus emergency department.

RELATED: Standalone ERs may have grown too fast in Texas, but other states continue to embrace them

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MedPAC is a nonpartisan agency in the legislative branch which provides the U.S. Congress with policy advice on the Medicare program. MedPAC officials said they want to discourage the creation of additional off-campus emergency departments that are close to already existing hospital emergency departments.

But in a letter (PDF) to the committee, AHA's Senior Vice President of Public Policy Analysis and Development Ashley Thompson called the rules "unfounded and arbitrary," saying they were not based on a proper analysis of Medicare beneficiaries or costs. She added the payment cuts would bring Medicare reimbursement to record lows for outpatient departments and hospitals.

It's an issue of growing concern as the creation of standalone emergency departments has exploded the last several years. But while providers say standalone facilities increase access, critics have raised concerns that they ultimately drive up the cost of care in states that have embraced them.

During the MedPAC meeting (PDF) earlier his month, officials said the overall growth of emergency department visits in Medicare is growing rapidly, increasing emergency department facility fees per beneficiary by 72% between 2010 and 2016.

According to a MedPAC report, the vast majority of the 566 standalone emergency departments in 2016 were located in metropolitan areas with existing capacity in more affluent areas with higher rates of privately insured patients. The growth of standalone emergency departments, they said, has been driven by "payment systems that reward treating lower severity cases in the higher paying ED setting" as well as competition for patient market share.

RELATED: Emergency care: Urgent care, freestanding ERs on the rise

In its comments, the AHA pushed for MedPAC to further study Medicare claims data specific to standalone emergency departments.  AHA said it also supported MedPAC draft recommendations to allow isolated rural hospitals to convert to standalone emergency departments, saying they believe the recommendation should be extended to vulnerable urban communities.

MedPAC commissioners are expected to vote their April meeting on the draft recommendations.