Aetna sues freestanding ERs over facility fees

Freestanding emergency rooms, which are quickly becoming a popular option for consumers to receive medical care, may also soon become the bane of insurers' attempts to reign in costs.

By offering perks such as 24-hour service, short waiting times and board-certified emergency specialists, consumers are drawn to these freestanding ERs as an alternative to traditional ERs or hospitals, reported Bloomberg.

FierceHealthcare previously reported that there are now more than 240 freestanding ERs in at least 16 states.

But this relatively new type of care delivery comes with hefty price tags. Treatments for a chest cold and breathing problems, for example, can cost $2,000, including about $1,500 in "facility fees."

Insurers, including Aetna and Humana, are concerned that freestanding ERs aren't justified in charging such facility fees and claim they aren't being transparent about the reasons behind the fees. Humana has said they're concerned patients don't understand the differences in costs between freestanding ERs and urgent care centers.

Aetna has sued three freestanding ERs and a hospital last August in Houston federal court. It alleged in the lawsuit that these new ERs have "wrongfully submitted facility fees" and have "masqueraded as hospital emergency rooms, without a license or any of the associated overhead," Bloomberg noted.

In particular, Aetna claimed that Rayford ER Management Co. LLC, which owns freestanding ERs, entered into a "sham" management contract with Cleveland Imaging and Surgical Hospital LLC, allowing the ERs to using the hospital's tax identification number as a "front" for high facility fees.

Some doctors agree with Aenta. Many freestanding ERs "are glorified urgent-care centers, but they still bill ER charges," John Milne, chairman of emergency medicine at Swedish Medical Center, a nonprofit healthcare system not involved in Aetna's lawsuit, told Bloomberg.

But Larry Thompson, a lawyer at Lorance & Thompson, P.C. in Houston, TX who represents the stand-alone ERs, said Aetna's lawsuit is off base. "They are emergency departments, they bill as emergency departments, but because they're not on a hospital campus, Aetna says they want their money back," he told Bloomberg. "They're picking on the little guys."

To learn more:
- read the Bloomberg article

Suggested Articles

A judge has dismissed the ongoing case between Oscar Health and Blue Cross Blue Shield of Florida over broker arrangements.

Expanding options for dental care in Medicare is a popular idea, but policymakers could take several avenues toward this goal, a new analysis shows.

Tennessee's proposal for a block grant brings a host of questions