The shuttering of what had been Amarillo’s fifth freestanding emergency room less than four months after opening may signal market saturation, according to those in the industry locally and statewide.
Neighbors Emergency Center at 4121 S. Georgia St. closed its doors on Sept. 8 after opening on May 27 — a move caused by low patient numbers and a reassessment of the Amarillo market, according to a company spokeswoman.
“This is more of a reset for the Amarillo market for Neighbors Emergency Center,” said Denise Hahn, NEC public relations specialist. “The numbers weren’t as high as we anticipated so it was just best to consolidate the staff and pull everybody into the first location on Western.”
Hahn didn’t provide specific numbers for how many people were seen at each facility.
She estimated all but 10 employees with varying titles were able to transfer to the location at 2105 S. Western St., and “at least 30” people are now employed there.
“We don’t go into any of our markets with a set goal,” she said. “So many factors are involved —population, the existing medical services … there’s a magic formula (and) those are done about 24 months in advance.
“We go in just with the forethought of truly trying to have more access to emergency medical care in a community that needs it.”
NEC operates 28 freestanding emergency rooms throughout Texas. Their operation began with a Houston location in November 2008. They opened their first location in Amarillo Feb. 5, 2016, on Western St.
The market in Texas for freestanding emergency rooms expanded rapidly after 2009 when the Texas Legislature approved House Bill 1357, the Texas Freestanding Emergency Medical Care Facility Licensing Act, which essentially legitimized the industry.
“The freestanding industry kind of took off … word got out to patients that there was an alternative to sitting in an ER waiting hours and hours to be seen so you did have a huge saturation of the market throughout the state of Texas,” Hahn said.
Hahn said they’ve seen the most success operating in rural Texas communities such as Kerrville and Paris.
“We have a high patient satisfaction (rate) because a lot of people don’t want to wait and there’s absolutely no reason for people to wait for hours and hours on end while a hospital is backlogged and just kind of herding them through,” Hahn said.
Hahn said that, on average, patients at NEC locations have a five-minute wait before being checked into an exam room, are seeing a board-certified doctor and ER nurse within 10 minutes and discharged within about three hours.
Despite the quick service, the freestanding ER market may be depleting.
“We have seen a big compression of the freestanding market just since the first of the year. Competitors have closed centers as well so this is just what’s happening across the state in this industry as we continue to fight for recognition from the federal government and going toe-to-toe with insurance companies,” Hahn said.
Though Hahn was clear that closing of the Georgia Street location was not due to billing issues or insurance reimbursement, she said those factors have contributed to the closing of some other locations. This year they have shut the doors to three locations in Texas — Austin, Longview and Lufkin — as well as locations in Rhode Island and Colorado.
Hahn said the industry has banded together to form organizations like the Texas Association of Freestanding Emergency Centers to tackle the hurdles they face.
While Hahn does not expect the industry-wide closings to continue — NEC is set to open a new location this fall in Lake Jackson — Jack Hooper, founder and CEO of Dallas-based company Take Command Health, a licensed health insurance agency, said he thinks more freestanding rooms will close.
“I think the trend is going to reverse in the next few years as consumers get wise,” he said. “It’s not all bad. I had a director here tell me that the average freestanding ER needs to (only) see six patients a day to be profitable.”
‘One too many’
Dr. Gerad Troutman, physician and founder of ER Now said they see anywhere from 10 to 50 patients daily at either of their locations at 2101 S. Coulter St. and 5800 S. Coulter St. and are in no danger of closing.
“Amarillo is going to support local and we are the local guys,” he said. “We’re not in danger of closing. We’re all local, we’re owned by seven local physicians that are part of the Amarillo community; we’re not going anywhere.”
While Troutman said there are no current plans for expansion at ER Now, he doesn’t think the industry is shuttering.
“Overall, the industry is absolutely growing,” he said. “The vast majority of patients that seek emergency care at a freestanding emergency center say they would come back.”
In addition to NEC and the two ER Now locations, Amarillo is also home to the ER on Soncy, which is a part of the BSA provider network.
Troutman said there are 215 independent freestanding licensed ERs in Texas.
“Every market can potentially become saturated and in Amarillo, I think that’s what happened. When you look at other markets we’re probably about where we should be. I think the one extra (ER) we had probably put it over the hump.”
Hooper’s company also helps patients with their bills when they feel they’ve been overcharged.
“If (someone) has a question about their bill they can snap a photo … we have a team that will review it … and get it straightened out,” Hooper said. “Turns out a lot of medical bills are wrong and usually not in the patient’s favor.”
Hooper said there’s no standardized or regulated price list hospitals, emergency rooms and urgent care centers must charge. However, he said there is a list of Usual and Customary (UC) charges, which they use as a guide.
“It’s a list of generally accepted charges,” he said. “It’s kind of unwritten rules, as long as bills are underneath that amount the bills aren’t under scrutiny. If bills are above that … you can threaten with reporting them to the insurance board and things like that.
“We’ve found a lot of them are willing to negotiate especially when they realize they can get a cash payment out of a client and not have to go through insurance or battle back and forth.”
Hooper said patients often complain about facility fees, for which emergency rooms charge the highest amount, and also redundant charges from the freestanding ER and then the hospital if the patient is transported. Hooper said he sees billing discrepancies in all levels of medical providers but “it’s most apparent in the ER because the bill is so much larger.”
Hahn said NEC works hard to ensure patients are not overcharged.
“Our charge master is often reviewed to make sure we stay in line with local market costs and charges,” Hahn said. “Our charge master has continually been at the same level as a hospital’s cost or in many cases, cheaper because we don’t have the massive overhead that a hospital has.
“Insurance obviously helps a great deal because that’s just the world that we are in. We do offer free medical screenings to anybody that comes in and we need to — we want to make sure that there’s not an emergent situation with somebody’s health or their life is on the line. We do a fair amount of what would be called charity care in that sense of Medicare patients … we don’t get any sort of reimbursement for that because freestanding emergencies are not recognized by the federal government.”
Troutman said ER Now’s prices are comparable to what a patient will be charged at a hospital.
“We are not out there to price gouge anybody. We trying to charge what’s fair and the industry standard and we do it in a better environment,” said Troutman, who is also the president-elect of Texas College of Emergency Physicians.
“In the state of Texas, as well as under federal law, under the current ACA, anytime a patient seeks emergency care the insurance company must pay for that emergency care at — it’s called the greater of three — the in-network benefit, the Medicare rate or the Usual and Customary (rate) and they’re supposed for to pay for every emergency at the greater of any of those three numbers.
“A lot of freestanding ERs are not in-network technically with any insurance company because there really hasn’t been a need to because they have to pay us the in-network rate and the vast majority accept that as final payment.”
He added they have also negotiated prices with uninsured patients to make sure they receive the care they need.Freestanding ERs in Amarillo
ER Now, 2101 S. Coulter St. Opened Sept. 4, 2015
Neighbors Emergency Center, 2105 S. Western St. Opened Feb. 5, 2016
ER Now, 5800 S. Coulter St. Opened Oct. 13, 2016
ER on Soncy, 3530 S. Soncy Road. Opened Nov. 25, 2016
Freestanding ER vs. urgent care
Urgent care centers:
Not open usually open 24/7
Typically staffed by family practitioners, nurse practitioners and physician’s assistants
Not mandated to have x-ray equipment, don’t have CAT scan machine and have limited laboratory capabilities.
Can turn away patients with no ability to pay.
Typical bill costs $200-300
Freestanding emergency rooms:
Typically staffed by emergency physicians
Have EKG, X-ray and CAT scan equipment as well as a full laboratory
It’s against the law for an ER to turn away patients