Urgent Care Answers From Stern's Inbox

My e-mail inbox receives frequent e-mail questions about the business of urgent care. I thought that readers might benefit from a few of my recent replies.

Q: A consultant recently told us that since our urgent care center is owned and operated by a hospital, we must bill as a Type B Hospital emergency department. What do you think about this idea?

A: Stop! For some reason this false information has been spread among the healthcare consultant community, and since then the misinformation has gained a life of its own. Urgent care centers almost never meet the criteria set for Type B emergency departments. The criteria are as follows:

Licensing: The clinic is licensed by the state in which it is located under applicable state law as an emergency room or emergency department. Is your center actually licensed as an emergency department? If so, then you may be operating a Type B emergency department. If not, then your center is not a Type B emergency department.

Self Designation: The clinic is held out to the public by name, posted signs, advertising, or other means as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment. Do you advertise your center as a place to treat emergency conditions? If so, is it wise for your center to incur this liability? If not, then your center is not a Type B emergency department.

Patient Visits: During the calendar year immediately preceding the calendar year in which a determination under this section is being made based on a representative sample of patient visits that occurred, at least one-third of all outpatient visits to the urgent care center are for the treatment of emergency medical conditions on an urgent basis without requiring a previously scheduled appointment.

Do more than one-third of the visits to your center involve the treatment of emergency conditions? If so, congratulations—many hospital EDs do not treat patients at this acuity rate. If not (and the chance that this is true seems very low), then your center is not a Type B emergency department.

If your center does not meet all three of the above criteria (and it is very unlikely that the center does meet all three criteria), then it is not compliant for your center to bill as a Type B Emergency department.

In the past few years, a handful of scattered health systems have opened Type B emergency departments in the hope of delivering their services out in the community where they can be readily and conveniently accessed by the public. Invariably (to my knowledge), these ventures have met with multiple difficulties.

First, the public does not perceive (and rightfully so) a freestanding building as a place to go with a true emergency, such as a heart attack.

Second, the public has become educated to the convenience and service levels of urgent care centers for minor to moderate problems, so they do not tend to view (again rightfully so) an emergency department as appropriate for non-emergency problems.

Third, state regulators have determined that these freestanding emergency departments do not meet state regulations for hours of service (as the state may require being open 24 hours per day) or proximity to a hospital (as the state may require an ED to be on the same campus as the hospital).

Fourth, a freestanding ED incurs the expense of emergency medicine physicians, emergency medicine nurses, imaging services and many other expenses not incurred by urgent care centers, so the freestanding ED may incur very significant financial losses on an ongoing basis.

Even worse, a healthcare system in Missouri was recently hit with a class-action suit for following this practice. The class involved “all Missourians who have been billed for an emergency room visit after receiving treatment at one of St. Luke’s urgent care centers.” Excluding any potential refunds that may be required from the hospital system, one has to suspect that the legal costs for defending this case will exceed any financial benefit that had accrued to the hospital from following this billing practice.

Q: In order to improve the revenues of our urgent care facility, we are considering operating the center as part of the hospital and billing professional services on a CMS-1500 and facility services on a UB-04. Is this a good idea?

A: This is a similar question to the previous question, but the answer is a little different. In this case, it may be compliant for many hospital-owned urgent care centers to bill for professional and facility services separately. Before your center bills in this way, I would recommend that you receive formal, written legal opinion from a lawyer with specific expertise in this area of healthcare.

When this billing method has been tried, however, it has met with serious patient complaints, significant legal expenses and has generally proved an impediment to the success of the urgent care center. 

One new urgent care center opened last year in Illinois. The center was staffed with emergency medicine physicians and nurses, and the center billed the physician and facility claims separately. Shortly after opening, the center received unwanted exposure by the local news media for the “hefty price tag[s]” and “for invoices coded like [sic] an emergency room visit.”

A local television station went on to interview the mother of a 13-year-old girl who was suffering from “food poisoning” and ended up with an immediate care bill of $4,500, which was three-times what the family had been billed for a recent two-night hospital admission. The hospital’s responded by “handing out fliers to patients” that explained their billing process, but this approach probably did little to counteract the story’s negative impact on the public perception of their center. Later, the hospital applied (but then withdrew its application) to the state to become a freestanding emergency center. 

The examples in this column point to the importance of planning your urgent care center from the start with:

1. an economically tenable model, which rarely includes ED physicians and ED nurses

2. a billing model that meets public expectations, which rarely includes separate physician and facility invoicing, and

3. urgent care professionals who truly understand the urgent care model, as these professionals will not tack like a sailboat from impractical to unpopular to noncompliant models.
David Stern, MD, CPC, is a partner in Physicians Immediate Care, operating 12 urgent care centers in Oklahoma and Illinois. Stern serves on the Board of Directors of the Urgent Care Association of America and speaks frequently at urgent care conferences. A certified professional coder, he is CEO of Practice Velocity (www.practicevelocity.com), providing urgent care software solutions to more than 570 urgent care centers. He welcomes your questions and invites you to schedule a full-day tour of the Physicians Immediate Care operations in Illinois.

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