A company wants to build a stand-alone ER in the Boise area. Its charges? ‘Excessive’
AI-generated summary reviewed by our newsroom.
- Bill would require freestanding ERs be paid local negotiated market rates.
- Blue Cross says Nutex funnels all its dispute requests to federal arbitration.
- Committee vote split 6–3 amid hearing over costs and Nutex’s business model.
Nutex Health, a for-profit company from Houston that operates a network of micro-hospitals around the country, wants to expand into the Treasure Valley. But Idaho’s largest health insurer, the nonprofit Blue Cross of Idaho, is determined to stop it. Or at least put guardrails around it.
Mike Reynoldson, a spokesperson for Blue Cross, said Tuesday before the Senate Commerce and Human Resources Committee that “one entity” in Idaho was exploiting the federal No Surprises Act — designed to protect patients from unexpected and exorbitant medical bills when receiving out-of-network emergency care — to overcharge insurers. Reynoldson was speaking of Nutex Health.
“They’ve arrived in Idaho, and they’re expanding,” he told legislators.
The publicly traded company has just one hospital in Idaho, in Post Falls, but it wants to build another at the busy corner of Eagle and Overland roads in Meridian, according to pre-application documents filed with the city in December.
The No Surprises Act created a provision known as independent dispute resolution, which means that when a patient receives out-of-network care, and an insurer and a provider can’t agree on a reimbursement amount, the parties can bring the dispute to a federal mediator to determine what should be owed. The process is managed by the Centers for Medicare & Medicaid Services.
“There are a little over 40 emergency rooms in the state, and we contract with all but one of those emergency rooms,” Reynoldson said. “Typically, we get about 14 of these independent dispute resolution requests per month from throughout Idaho.”
But since Nutex Health opened its North Idaho hospital, Blue Cross said it gets about 280 of the requests a month from Nutex Health alone. Reynoldson said the company sends all of its claims through that federal arbitration process. He called the hospitals that Nutex Health operates “freestanding emergency rooms.”
“What the federal law did not contemplate is that in setting up this independent dispute resolution process, that a new business model, known as freestanding emergency rooms, would be created to unabashedly send 100% of their emergency care medical claims through the dispute resolution process,” he said.
What Blue Cross says Nutex charges for urinary infection
Reynoldson also accused freestanding emergency rooms of seeking reimbursement for medical services at rates sometimes 10 times as high as what Medicare would pay.
For example, he said, the market rate for a urinary tract infection at an emergency room is $521, but the freestanding emergency room price for the same visit is $3,187, more than six times higher. For a sprained knee, the market rate price is $1,700, while the freestanding emergency room price is $8,588, about five times more.
“The market rate is the rate that Blue Cross of Idaho pays emergency rooms in Idaho for that particular emergency service that’s delivered,” Reynoldson said. “The freestanding emergency room rate is the billed rate that we then receive from these freestanding, out-of-network emergency rooms, and it’s the amount that they submit as part of the independent dispute resolution process.”
Blue Cross told the Idaho Statesman late last year that it tried to negotiate an in-network contract with Nutex Health shortly after it opened the Post Falls ER & Hospital in August 2024, but several of its offers were refused. When Nutex Health did agree to an in-network rate, it soon backed out, said Drew Hobby, chief strategy officer at Blue Cross.
The health insurer accused Nutex Health, in letters to the Idaho Department of Insurance and the federal government, of routinely overcharging the insurer for treatment at its Post Falls hospital and misusing the federal process designed to help providers and insurers settle out-of-network claims.
“These entities refuse to contract with commercial insurers, they will not contract, and so they submit a bill to us for an inflated amount, we do not pay that amount, we offer what our market rate is for those services and for that overnight stay considered an emergency, and then we go to this independent dispute resolution process,” Reynoldson said.
Proposed legislation would target Nutex’s business model
A bill introduced on Feb. 18 by Republican Sen. Treg Bernt of Meridian would ensure that freestanding emergency rooms, such as the one Nutex Health operates in Post Falls, are reimbursed at the same negotiated local market rates as in-network providers. The proposed legislation would also require freestanding emergency rooms to disclose to patients if they do not participate in Medicare, Medicaid or Tricare programs.
Reynoldson said Tuesday that other Idaho hospitals, hospital systems and critical access hospitals are not targeted by the bill.
“This business model is replacing one surprise bill with another surprise bill,” he said. “Because when the price of emergency care goes up, the next year, when Idaho insurers set their insurance premiums and their insurance rates, we have to take into consideration those excessive amounts that were paid to these entities.”
But not everyone at the hearing took issue with the business model. Sen. Brian Lenney, R-Nampa, the vice chair of the committee, voted against the bill, saying he didn’t believe Nutex Health was doing anything illegal and that “patients seem to love this place,” in reference to the company’s Post Falls hospital.
Lenney said he looked at Nutex Health’s website and saw that the company says it complies with the No Surprises Act. He also said the hospital was nominated for “best ER in North Idaho.”
Nutex touts short wait times, large rooms, one-on-one care
“In comparison to the traditional hospital systems, patients will be met with the convenience of emergency care in the comfort of a relaxing environment, a short wait time, and ample one-on-one time with a board-certified physician and emergency trained staff,” Nutex Health said in a news release when it opened its Post Falls hospital.
The company did not immediately respond to a request for comment for this story.
Lenney read amenities listed on the hospital’s website, including large, private rooms with a private bath, television and catered meals.
“That’s great if that’s what they want to provide in the market, and you have consumers who are willing to pay the price for it,” Lenney said. “I don’t think they’re a bad actor. I heard on the Senate floor that we’re capitalists, but here we are trying to shut this one business down. What are we doing? If somebody wants to get a pregnancy test there, they should knock themselves out.”
Sen. Tammy Nichols, R-Middleton, also voted against the legislation, saying she would have to “look into this more.”
Sen. Jim Guthrie, R-McCannon, said he believed Nutex Health’s business model could be “problematic” for families across Idaho. He urged his colleagues on the committee to pass Senate Bill 1319 and send it to the full Senate. It passed 6-3.
“This company has figured out a loophole,” Guthrie said. “There’s movement that suggests there will be one in the Treasure Valley here, and it’s a business model that’s growing across the nation and growing in Idaho, and I think it is smart to get out in front of this and pump the brakes on this type of activity.”
This story was originally published February 25, 2026 at 2:20 PM.
