STATEMENT OF MARCIE H. ZAKHEIM, ESQ.

GENERAL COUNSEL

NATIONAL ASSOCIATION OF COMMUNITY HEALTH CENTERS

TO THE

HOUSE HEALTH COMMITTEE

MAY 16, 2007

Good afternoon, Mr. Chairman and Members of the Committee. My name is Marcie Zakheim and I am a partner at the firm Feldesman Tucker Leifer Fidell LLP, which serves as general counsel to the National Association of Community Health Centers. I appreciate the opportunity to talk with you this afternoon about the benefits of establishing a Federally Qualified Health Center (FQHC) – Emergency Room (ER) Diversion Pilot Program under which community health centers located within or adjacent to hospital emergency departmentswill be able to provide alternatives to furnishing costly non-emergentoutpatient care in the hospital emergency room by offering patients more appropriate settings in which to receive primary care services. I am privileged to join with such a stellar group of presenters at this hearing.

ER diversion programs are cost-effectiveby reducing the number of “avoidable” (i.e., non-urgent or ambulatory care sensitive)ER visits. Nationally, one-third of hospitals report that they have had to divert ambulances from their ERs at some time during the year due to overcrowded conditions. However, recent studies have shown that:

  • At least one-third of all ER visits are “avoidable” and therefore treatable in primary care settings;
  • The presence of a health center has been associated with a reduction in unnecessary emergency room use, together with improved health outcomes and better access to a usual source of primary care; and
  • Health center Medicaid patients had 19% fewer avoidable emergency room visits.

In fact, NACHC recently estimated that if avoidable visits to emergency rooms were redirected to a primary care source like a health center, over $18 billion in annual health care costs could be saved nationally, with a savings of as much as $932 million annually in Ohio alone.

ER diversion programs also produce significant savings in the long term. In addition to furnishing an appropriate level of care on a timely basis, health centers serve as the “medical homes” for millions of uninsured and underinsured patients nationwide. Because patients with medical homes receive appropriate levels of long-term continuous medical care on a timely basis, they are less likely to suffer costly illnesses, thus reducing the need for more expensive in-patient and specialty care, saving billions for taxpayers and society. A recent study found that health center Medicaid patients had 11% fewer avoidable hospitalizations than Medicaid patients seen by other providers.

Further, once patients have established a medical home with an ambulatory care provider, they are less likely to seek out futureprimary and preventive care furnished in the ER. Having a health care home is associated with improved access to and use of primary care, better management of chronic diseases, a reduction in the risk of new health problems, more cancer screenings for women, and even fewer lawsuits against emergency rooms. Studies have consistently shown that having a regular provider is a better predictor of seeking care than having insurance alone, and having both make the greatest impact on health care outcomes. Finally, utilizing a medical home rather than the ER to treat non-urgent conditions results in savings for the patient – ER charges for minor, non-urgent problems may be two to five times higher than charges for a typical private physician office visit.

Clearly, there are numerous financial and medical benefits in establishing FQHC – ER Diversion Programs. However, questions have arisen as to whether diverting patients who present to the hospital ER with non-urgent conditions to a health center located within or adjacent to the ER would result in additional liabilities for either the ER or the health center, in particular with regard to compliance with the Emergency Medical Treatment and Active Labor Act (EMTALA) [Section 1867 of the Social Security Act; 42 U.S.C. § 1395dd], its implementing regulations [42 C.F.R. §§ 489.20(l), (m), (q), and (r) and § 489.24], and relevant case law and guidance.

EMTALA is a Federal statute that was enacted to prevent medical providers from refusing to serve, or inappropriately referring (“dumping”) patients with emergent conditions based on their lack of insurance or their inability to pay for medical services. To accomplish this goal, EMTALA requires Medicare-participating hospitals that have emergency departments to provide all individuals who seek hospital emergency services with an “appropriate medical screening.” If an emergency condition is detected, the hospital must treat and stabilize the individual or, if certain requirements are met, may transfer the individual to another facility. So long as the EMTALA screening, stabilization and transfer requirements are satisfied in an appropriate manner, the hospital ER would not be subject to liability for diverting non-urgent patients to an ambulatory care center, such as a health center, to receive clinically appropriate medical care.

While EMTALA applies to all hospitals that participate in the Medicare program and have ERs dedicated to the treatment of patients with emergent conditions, regulations and guidance issued by the Centers for Medicare and Medicaid (CMS) are clear that EMTALA requirements do not apply to Medicare-participating “free-standing facilities” - entities that furnish health care services to Medicare beneficiaries and that are not integrated with the hospital in any manner, i.e., as a department of the hospital, a remote location of a hospital, a satellite facility or a provider-based entity – regardless of whether the facility is located in the hospital or on the hospital campus. Final regulations issued by CMS in September 2003 further clarify that EMTALA obligations do not apply to:

  • Off-campus provider-based hospital departments that do not routinely provide emergency services;
  • Any provider-based entities, whether located on or off campus, that are not under the certification and provider number of the main hospital; and
  • Other “freestanding” facilities, such as health centers, that are operationally independent from, and not integrated into, a hospital that is subject to EMTALA (whether located on or off campus), but that may have arrangements with the hospital.

In February 2005, Congress added its support to the establishment of ER Diversion Programs while acknowledging and addressing potential EMTALA-related issues. The Deficit Reduction Act of 2005 (DRA) includes two new sections of Medicaid law addressing (and apparently, encouraging) diversion arrangements between hospital ERs and “alternate non-emergency services providers,” under which patients are offered a choice as to whether to receive non-urgent outpatient care in the hospital emergency room or in a more appropriate ambulatory care setting. Alternate non-emergency service providers are explicitly defined to include community health centers, as well as health care clinics, physicians’ offices, hospital outpatient departments, and similar types of providers, who can furnish clinically appropriate services contemporaneous with the provision of non-emergency services which would have been provided by the emergency room.

Section 6043(a) of the DRA, which amends new Section 1916A of the Social Security Act (SSA), gives States the option to amend their State Plans to permit hospital emergency rooms to charge certain Medicaid patients co-payments as a condition to receiving care for a non-emergency condition if:

  • The emergency room provides an appropriate medical screening exam to the patient, as defined in EMTALA law, regulation, and guidance, and
  • The exam indicates that the patient does not have an “emergency medical condition,” as defined by EMTALA law, regulation and guidance, but
  • That patient decides to use the emergency room for care anyway, after being informed that: (1) the hospital may require payment of a co-payment prior to furnishing non-emergency services in the emergency room, and (2) an “alternate non-emergency services provider” is actually available and accessible and may provide the services without the imposition of cost-sharing.

Section 6043(b) of the DRA, which amends Section 1903 of the SSA, provides for the payment to States of up to $50 million in grant funds over a four-year period to assist in establishing alternate non-emergency service providers, or networks of such providers, with preference given to States that establish alternate non-emergency services providers or networks that (1) serve rural or underserved areas where beneficiaries may not have regular access to providers of primary care services, or (2) are in partnership with local community hospitals.

By enacting these two provisions, Congress recognized what health centers (and their respective State and Regional Primary Care Associations) have known for years – non-urgent care is more appropriately provided in ambulatory care settings that have the experience and expertise in furnishing primary and preventive health care, rather than in costly and overcrowded emergency rooms. Further, the new provisions establish an important legal principle that, upon determination through an appropriate EMTALA screening that a patient has presented with a non-emergent or non-urgent condition, the individual has a choice as to whether to receive care from the hospital ER or to choose an identified alternate non-emergency service provider. If the patient chooses to see the alternate provider, assuming that the hospital performed a valid screening, the hospital has fulfilled its EMTALA obligations and should not face liability based on the patient’s choice.

Chicago’s Southside Health Collaborative is one example a successful ER Diversion Program. The Collaborative links the University of Chicago Adult Emergency Room with 18 community-based providers, including 15 FQHCs, to serve non-urgent patients in ambulatory care settings. To accommodate the influx of new patients, many of whom were unaware of community-based alternative sources of care, the FQHCs instituted open access scheduling as well as blocked out appointment times, and extended their hours to include additional weekend and evening hours.

Prior to establishing the Collaborative, the University of Chicago ER’s story wascommon for ERs located in medically underserved areas: approximately 36% of the ER’s patients served annually were classified as non-urgent, while over 20% of the patients lacked a medical home and 10% of the patients accounted for 30% of the total ER visits (“frequent visitors”). Further, severely crowded conditions resulted in long waiting times (approximately 12 hours or more), performance parameters worse than regional and national counterparts, and almost 10% of ER patients leaving prior to being treated. Eighteen months after the inception of the Collaborative, the number of “frequent visitors” to the ER has been reduced, while the number of patients securing a medical home has increased.

Health centers offer medically underserved communities a regular source of cost-effective primary and preventive care that translates into, among other things, reduced hospitalizations and lower use of emergency rooms, thus reducing overall health care spending significantly and producing far better health care outcomes. As a result, pressure on local emergency rooms will be lowered, saving tax payers significantly. FQHC-ER Diversion Programs which support and enhance the ability of health centers to provide an alternative to furnishing costly non-urgent outpatient care in the hospital emergency room, thus allowing more Ohioans to experience high quality, long-term medical care while reducing ER costs,will result in substantial benefits for patients, communities, insurers, and governments – indeed, for all of Ohio and all of America.

Thank you again for this opportunity. I would be happy to answer any questions.

REFERENCES

Cunningham, P.J. (2006), “Medicaid/SCHIP Cuts and Hospital Emergency Department Use,”Health Affairs 25(1):237-247.

Falik, M., et al (2006), “Comparative Effectiveness of Health Centers asRegular Source of Care.” Journal of Ambulatory Care Management29(1):24-35.

Falik, M., et al (2001), “Ambulatory Care Sensitive Hospitalizations and Emergency Visits: Experiences of Medicaid Patients Using Federally Qualified Health Centers,”Medical Care 39 (6): 551-56.

Lambrew J. et al (1996), “The Effects of Having a Regular Doctor on Access to Primary Care,” Medical Care 34(2):138-151.

National Association of Community Health Centers (2007),The Impact of CommunityHealthCenters & Community-Affiliated Health Plans on Emergency Department Use.

Sox et al (1998), “Demographic Characteristics of Persons Without a Regular Source of Medical Care – Selected States, 1995,” JAMA (279) 17:277-279.

Sox C. et al (1998) “Insurance or Regular Physician: Which is the Most Powerful Predictor of Health Care?” American Journal of Public Health 88(3):364-370.

Starfield, B. and Shi, L. (2004), “The Medical Home, Access to Care, and Insurance: A Review ofEvidence.” Pediatrics 113(5):1493-8.

Starfield, B. (1998), “Primary Care: Balancing Health Needs, Services, and Technology.” New York: OxfordUniversity Press.

Starfield B. (1992), “Concept, Evaluation and Policy - Primary Care,” New York: OxfordUniversity Press.

Starfield B. (1991), “Primary Care and Health: A Cross-National Comparison,” JAMA 266(16):2268-71.

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