UCHealth announces partnership with for-profit First Choice ERs in Colorado

April 22--University of Colorado Health, the nonprofit statewide hospital system operating Memorial Hospital, announced a partnership Tuesday with a chain running a dozen for-profit freestanding emergency rooms across Colorado.

The hospital system "will hold a majority stake" in freestanding emergency rooms operated by publicly traded Adeptus Health, based in Lewisville, Texas, according to a news release from UCHealth.

Under the partnership, Adeptus-owned First Choice Emergency Room locations in Colorado will be renamed UCHealth ER, the release said. The partnership includes all 12 First Choice locations, as well as two more under construction and "possible hospital locations planned for Colorado Springs and Denver," the release said.

The company has plans for a hospital with 24 beds near Interstate 25 and North Nevada Avenue, which is in the final stages of the building permitting process.

The goal is to offer patients better access to care and more convenience, said Dr. Richard Zane, UCHealth's executive director of emergency services.

"It's really about putting patients in the center and getting closer to our patients," Zane said.

Details of the financial arrangement were not announced, except that the facilities will operate under a "joint venture," Zane said.

An Adeptus representative did not return a call to The Gazette on Tuesday.

The move pairs a rapidly expanding nonprofit, research-focused hospital system with a for-profit company that has garnered criticism for catering to lucrative, well-insured patients using questionable billing tactics.

Since leasing Memorial Hospital on Oct. 1, 2012, UCHealth has begun managing a hospital in Wyoming and purchased the Longmont Clinic, where the system plans to build a $100 million to $125 million hospital.

Meanwhile, Adeptus has built dozens of freestanding emergency rooms in Texas and Colorado and recently began building small hospitals -- similar to the one planned for Colorado Springs.

But the company has proved controversial.

Insurance companies claim for-profit freestanding emergency rooms drive up insurance rates by billing ER prices for conditions that could better be treated by a family doctor or at less-expensive urgent care facilities.

Many of those concerns center around "facility charges" that often accompany emergency room bills. The facilities do not accept Medicaid, Medicare or Tricare.

Mike Ware, chief executive of the El Paso County Medical Society, said local hospital officials and physicians have complained to him about First Choice siphoning off the best-insured (and thus more profitable) patients. As a result, hospitals are left to care for a greater share of patients covered by Medicaid and Medicare, which reimburse hospitals less than private insurance plans, he said.

"That puts a financial burden on hospitals and the community facilities," Ware said. He had not received any immediate comments regarding Tuesday's announcement.

Advocates for First Choice say the facilities offer a convenient alternative to crowded hospital emergency rooms, which can have burdensome wait times.

They are open 24/7, offering more convenience than urgent care clinics, which often close about 8 p.m.

They also have all the amenities of traditional emergency rooms, including X-ray screenings, lab work and a room for child births. Meanwhile, urgent care clinics largely specialize in minor and moderate aliments, such as cuts, sinus and digestive problems.

If people need more advanced, lifesaving care at freestanding emergency rooms, including on-call specialists or surgery, they must be taken to a full-service hospital.

Coverage options may change under the partnership, Zane said.

Medicaid, Medicare and Tricare will be accepted, likely by 2016, he said. Also, patient co-pays will eventually be the same at the Adeptus facilities as at current UCHealth hospitals, he added.

Under the new partnership, UCHealth will oversee operations at each facility, and all Adeptus locations will be outfitted with UCHealth's electronic medical records system.

No layoffs -- either for physicians or staff members -- are expected due to the partnership, Zane said, though doctors must be credentialed by UCHealth.

"There will be a total review of all of the emergency departments," Zane said. "But right now, the emergency departments are providing remarkably high quality care, and their physicians are all high-caliber physicians."

The move appears to be a way to increase market share in an area where it's hard to build infrastructure, said Dylan Roby, assistant professor and researcher at the UCLA Center for Health Policy Research in California. Meanwhile, Adeptus may also be seeking a new funding source -- namely Medicaid, Medicare and Tricare reimbursements -- should their emergency rooms not be fully used.

"It may just be their way of expanding their reach without too much investment," Roby said.

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