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Summary: Freestanding emergency medical care facilities (freestanding ERs) offer the same services as hospital-based emergency rooms, but are usually less crowded and more readily accessible. Freestanding ERs also provide a higher level of care than standard urgent care clinics. The concern is that some freestanding ERs are being advertised as urgent care clinics, but are charging emergency room rates. HB 1376 seeks to protect consumers by requiring freestanding ERs to advertise as emergency rooms.
HB 1376 requires freestanding ERs to advertise themselves as emergency rooms if they charge the usual, customary rates normally charged by a hospital emergency room in their region or a hospital emergency room with similar rates of emergency health care. HB 1376 requires the Texas Department of Health to adopt rules requiring facilities to conspicuously post notice to patients that the facility is an emergency room facility and charges rates comparable to hospital emergency rooms. HB 1376 makes a failure to adhere to these rules a “false, misleading, or deceptive act,” under the Deceptive Trade Practices Act and applies public and private remedies from the Business and Commerce Code as punishment, including restraining orders with penalties ranging from $10,000 to $250,000.
Analysis: HB 1376 imposes an onerous regulation on freestanding emergency medical care facilities that takes Texas further from a free market health care system. In a free market system, freestanding ERs would be able to determine their own prices. It should be the consumer’s responsibility to figure out whether the price of care at a freestanding facility is worth their money compared to a hospital emergency room and compared to urgent care facilities that may offer less care.
Moreover, the penalty for not complying with this law is severe, considering that a violation would include only a failure to post that a freestanding facility is an emergency room with similar service rates. The better alternative is to let consumers do their due diligence and use these facilities if they are worth their money, and if not, choose to go to a hospital emergency room.
However, it is clearly deceptive to advertise as one type of facility and then charge the rates of another type. People who choose to seek care at a particular facility, expecting to pay far less than emergency room rates based on the advertising, should not have a bait and switch pulled when they get the bill. This classic deceptive advertising is the reason there is a statute on the books in the first place. These freestanding ERs are clearly flouting the law.
While we support eliminating deceptive advertising, we oppose the excessive penalties associated with violation. We are neutral on this bill.