Demand for emergency room care in California has increased by 26 percent over the last decade while capacity has remained flat or declined in most service areas. Accordingly, some health care analysts recommend that hospitals be allowed to operate freestanding emergency departments (FEDs) to help meet a growing need in the state. FED supporters also believe that the enactment of health care reform will put greater stress on existing hospital emergency departments because as many as 40 hospitals in California, most with emergency rooms, will close in the coming years.

FEDs were first used in the 1970s to fill the need for emergency care in rural areas. At that time, such areas were not able to support the construction of a hospital, and an FED was an affordable alternative. In the past 10 years, however, FEDs have become popular in suburban areas, as some health care providers seek to use them to siphon patients from local hospital emergency departments (EDs) and relieve some of the overcrowding and congestion there.

In 2004, the federal Centers for Medicare and Medicaid Services (CMS) officially recognized “dedicated emergency departments” and defined them with respect to the main hospital, regardless of their location. With this change, FEDs began to receive higher payments than they previously did as outpatient clinics. In 2008, CMS further defined the process for billing and reimbursement of these facilities with two billing categories: Type A for designated EDs that are open 24 hours a day, which generally receive higher reimbursement than Type B facilities, which are not open 24/7.

Although FEDs are federally recognized, licensing and regulation of these facilities are the responsibility of each state, which means guidelines vary across the country. California law does not explicitly allow or disallow the operation of FEDs. However, it does state that any facility using the term “emergency” and claiming to provide “emergency medical services” must comply with specific regulations for Standby, Basic or Comprehensive services of permitted hospital emergency departments. Such facilities must provide the following services onsite: intensive care service with adequate monitoring and therapeutic equipment; laboratory service; radiology service; surgical services that are immediately available for life-threatening situations; post-anesthesia recovery; and blood bank.

However, California law also provides for an exception for the operation of potential look-alike FEDs for urgent/emergency care in rural areas when the local Emergency Medical Services Agency has given approval for such operation. Four facilities in California were approved as FEDs under this exception: Western Sierra Medical Clinic in Downieville; Community Medical Center-Oakhurst; Redwood Coast Medical Services in Gualala; and Naval Hospital in Lemoore. Since the growing popularity of FEDs is a recent phenomenon, many states have not yet developed regulations.

Based on a 2009 report from the California HealthCare Foundation, 222 freestanding emergency departments were operating in 17 states at that time.

Are FEDs a good idea for California? What do you think?