Freestanding Emergency Department Trends
A trending development within the healthcare sector in the United States is the freestanding emergency department (FSED). First conceptualized in the 1970s, FSEDs are licensed facilities designed to offer emergency care and are structurally distinct from a hospital. FSEDs differ from hospitals in that they lack inpatient or operating rooms, which means those who need that level of care must be transported to a nearby hospital.
As healthcare systems and hospitals strategize on how to provide responsive, yet cost-effective care, the FSED market is set to expand over the coming years. In 2019, the FSED market size in the US was valued at about $3 billion and is projected to increase at a compound annual growth rate (CAGR) of approximately 5 percent between 2022 and 2027. The market is primarily driven by patient overcrowding of hospital emergency departments and by general advances in the country’s healthcare infrastructure.
The increasing number of accident-related injuries and the incidence of diseases like stroke, epilepsy, and heart issues, all of which call for mmediate care, are prompting the rise of FSEDs across the US. Also driving the popularity of these facilities is the patient preference for ease of access and faster turnaround times than can typically be offered in a hospital.
There are two categories of freestanding emergency departments, depending on ownership. Off-campus emergency departments (OCEDs) are hospital-owned and typically refer patients back to the parent hospital in case they need inpatient or surgical care. On the other hand, autonomous FSEDs are owned by independent investors or physician groups, and are known as IFSEDs.
To receive Medicare reimbursement under the Outpatient Prospective Payment System (OPPS), FSEDs need a hospital affiliation. IFSEDs cannot bill Medicare for reimbursement. In addition, most private insurers don’t generally contract with non-affiliatd IFSEDs.
A freestanding emergency department is expected to provide the same level of care that can be accessed at a hospital emergency room. This includes lab services, X-ray availability, and a pharmacy. Those patients who require additional inpatient care like overnight observation, nursing, specialty diagnostics, and surgery or other medical procedures are then transferred to the affiliated hospital or, in the case of an IFSED, to the nearest hospital. The American College of Emergency Physicians recommends that all emergency departments, whether hospital-based or freestanding, provide services on a 24/7 basis. Also, FSEDs should be manned by qualified emergency physicians and registered nurses. The operations of an FSED should be in line with the Emergency Medical Treatment and Labor Act.
An FSED should not be confused with an urgent care center. The latter is normally designed along primary care models and used to access non-emergency care, often after-hours.
Regulations governing FSEDs vary by state. California, for example, prohibits such facilities altogether. Many states where FSEDs are allowed require that they be managed and owned by a healthcare system or hospital. A few states, like Texas, Rhode Island, Colorado, and Minnesota, permit both OCEDs and IFSEDs. While some states have instituted policies regulating FSEDs, others lack guidelines, leading to great variance in their operations.
