Freestanding ERs Ask HHS for Recognition as Medicare/Medicaid-Eligible Healthcare Facilities 

Mar 28, 2020 at 07:04 pm by pj




To Serve Vulnerable Patients and Relieve Hospital Bed Shortage



In a letter to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, the National Association of Freestanding Emergency Centers  (NAFEC) offered the full resources its 200 FECs have to assist with the COVID crisis and also requested that the Centers for Medicare and Medicaid Services (CMS) utilize its authority to provide Medicare and Medicaid reimbursement to freestanding emergency centers (FECs) for Medicare and Medicaid patients during the Covid-19 pandemic. 


FECs’ recognition as Medicare and Medicaid-approved healthcare facilities would alleviate  hospital overflow during the expected surge of COVID patients, provide rural and underserved patients with more and easier access to care and help leverage untapped resources, including hundreds of ER physicians and more than 1,500 hospital beds, in the nation’s response to the pandemic. 


Currently, the more than 200 FECs across the nation are not eligible for Medicare or Medicaid reimbursement because the Medicare statute has lagged the relatively new form of health care delivery and only recognizes centers owned by hospitals. This cuts off many vulnerable and older patients dependent on Medicare and Medicaid who are at greatest risk during this healthcare crisis from critical medical resources. In order to facilitate recognition of FECs by CMS, HHS must modify its current CMS regulatory interpretation. 


“The COVID-19 outbreak demands that health resources across America be fully available to treat a patient population that could overwhelm hospital-based emergency rooms,” said Brad Shields, Executive Director of the National Association of Freestanding Emergency Centers. “During this healthcare crisis, patients’ needs should take precedence over facility ownership in determining where they can seek medical care. The nation’s freestanding ER’s are ready, willing and able to serve Medicare and Medicaid patients and relieve the pressure on the hospital system as soon as the federal government is able to give them the green light.”  


The nation’s more than 200 FECs are fully equipped emergency rooms staffed by emergency physicians, nurses and support staff and are required to provide 24/7 access to emergency health care under the same quality standards that apply to hospital emergency rooms. FECs possess key healthcare resources such as ventilators and isolation rooms that are badly needed during the pandemic.  Across the state of Texas alone there are more than 1,550 patient beds in freestanding emergency centers ready to relieve the burden on hospitals.


In its letter, NAFEC further offered a range of suggested services FECs could perform, if authorized, that would relieve the strain on hospitals, including

  • Serving as Covid-19 testing sites
  • Offering inpatient or ICU services
  • Providing outpatient services
  • Caring for patients longer than 23 hours
  • Serving as a dedicated facility for hospital ERs
  • Offering post-op treatment for emergency surgery patients




March 26th, 2020


The Honorable Alex M. Azar II

Secretary of Health and Human Services

200 Independence Avenue, S.W.

Washington, D.C. 20201


Secretary Azar,


As the COVID crisis has deepened in Texas and across the country, it has become

clear that no resources should be left on the sidelines and all providers must do

what they can to assist hospitals as they prepare for the expected surge of patients.

On behalf of the more than 200 freestanding emergency centers (FECs) in the

country, we wanted to reach out to let you know that we stand ready to work with

you and the providers in our communities to assist in this fight to ensure that

patients in our communities get the care they need. Like many others, these FECs

are on the frontline of this fight and have seen thousands of COVID-19 symptomatic

patients with a growing number of positive cases.


We are, therefore, writing to request that the Centers for Medicare and Medicaid

Services (CMS) utilize its authority under the recent 1135 waiver to provide

Medicare and Medicaid reimbursement to FECs that are able to serve Medicare

and Medicaid patients during this pandemic.


While FECs have the capabilities of an off-campus emergency department of a

hospital, because they are not owned by a hospital, they are not recognized by CMS

as facilities eligible for payment under Medicare or Medicaid. FECs have only been

in existence for 10 years and have been working with Congress and the American

College of Emergency Physicians (ACEP) and Emergency Department Practice

Management Association (EDPMA) to obtain Medicare and Medicaid recognition1,

but the statute has, unfortunately, lagged behind our delivery model.


FECs are fully equipped emergency departments, possess around the clock lab and

advanced imaging services and are staffed by Emergency Medicine trained

physicians who are on-site 24 hours a day, seven days a week. They are regulated

and licensed by states and subject to state EMTALA laws and a panoply of other

health and safety regulations that equal or exceed emergency departments

operated by hospitals. During this time, all resources should be available to

patients, including FECs, especially given that many of those facilities may have key

healthcare resources (e.g., respirators, isolation rooms) to assist in caring for the

patient overflow from hospital emergency departments.


Across the state of Texas alone, there are more than 1,550 beds in 200 freestanding

emergency centers that stand ready to relieve the burden on hospitals. There are

FECs in small rural towns and rural counties as well as large, urban and suburban

areas. FEC physicians and staff can provide much needed support in the large cities,

which will most likely be hit the hardest with COVID-19. As a point of context,

budgets for major hospital construction allocate between $1 million and $1.5

million per inpatient bed planned, which includes everything else that goes into a

hospital, (operating rooms, cafeteria, physical plant) most of which isn't needed

during this pandemic. As such, the cost to build three major 500 bed hospitals,

FECs can add an inpatient construction value of $1.5 billion overnight by simply

making our more than 1,500 beds accessible to Medicare and Medicaid patients. In

addition, FECs small size is strategically perfect to keep patients in smaller groups

and minimizes COVID spread to other patients.


But we cannot do that if we do not have the resources to provide care to these

patients. Due to CMS’s current regulatory interpretation of FEC eligibility for

disaster funding, the resources freestanding emergency centers can offer are not

being fully utilized.


Based on our legal analysis (attached), we believe CMS has the current waiver

authority under the Section 1135 of the Social Security Act to provide Medicare

funding for FECs that are providing care to Medicare beneficiaries during the

COVID-19 pandemic. This waiver authority under Section 1135 expressly states that

it should be construed, “to ensure, to the maximum extent feasible,” that sufficient

health care items and services are available to meet the needs of beneficiaries

during an emergency and in an emergency area. Id. 1135(a), 42 U.S.C 1230B-5(a).

Further, Section 1135 provides that the “term health care provider means any

entity that furnishes health care items or services, and includes a hospital or other

provider of services, a physician or other health care practitioner or professional, a

health care facility, or a supplier of health care items or services.” (Emphasis

added). Id.1135(g)(2), 42 U.S.C 1320b-5(g)(2).


The definition of “health care provider” is sufficiently broad to include FECs. The

waiver authority extends to conditions of participation, certification, program

participation and similar requirements, for not only individual providers but also

types of providers. Furthermore, nothing in Section 1135 suggests the waiver

authority does not extend to payment. The contrary suggestion is without merit as

it implies the Secretary could waive program participation, but not be empowered

to pay for items or services then furnished.


Section 1135 of the Social Security Act empowers the Secretary to waive

participation with respect to FECs providing care during this national disaster and

to pay dedicated Medicare emergency facility rates to those centers.


A provider’s ownership status should not determine whether they are eligible to

serve patients during this national crisis, and all resources must be marshaled and

brought to bear.


Enclosed with this letter is a matrix to help demonstrate our current capabilities

and a variety of options on how FECs can be fully utilized. We would like to discuss

these options with you and collaborate how we can assist immediately and in the

longer term based on developments on the ground and where resources are

needed. Below are the concepts you can find in our matrix.


  • Option 1. Extend CMS emergency care coverage to FECs
  • Option 2. FECs to offer outpatient services
  • Option 3. Observations of patients for over 23 hours
  • Option 4. FECs to offer inpatient or ICU services
  • Option 5. FECs to be included as COVID-19 testing centers
  • Option 6. FECs to be a dedicated facility for Hospitals EDs
  • Option 7. FECs offering Post-Op for emergency surgery patients


We look forward to working with you to ensure that Medicare and Medicaid

beneficiaries are getting the emergency care they need and require during these

dire times.



Brad Shields, Executive Director

National Association of Freestanding Emergency Centers (NAFEC)


■ Recent News