Part of the reasoning behind the incentive is the high cost of care linked to freestanding ERs. A 2019 brief from UnitedHealth Group found freestanding EDs can charge up to 22 times more than physician offices.
Colorado is home to 44 freestanding ERs, 34 of which are hospital-owned. While the facilities were pitched as a way to fill gaps in care, a report from the Colorado Health Institute cited by KHN found the freestanding ERs more often set up in wealthier neighborhoods and competed with other hospitals.
Kim Bimestefer, executive director of Colorado’s Department of Health Care Policy and Financing, told KHN, “We don’t want hospitals to have stand-alone ERs, so we are willing to pay to shut them down.” The department oversees Colorado’s Medicaid program, which has seen higher costs related to beneficiaries seeking care for common illnesses at the freestanding facilities.
State health officials would prefer the facilities be turned into ones that offer primary care or mental health services. It’s part of a hospital transformation plan in the state that requires hospitals to improve quality metrics to receive millions in Medicaid payments, according to the report.
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