Many reasons account for local and state health departments exploring new ways of generating revenue.1 Federal and state budget cuts, the implementation of the Patient Protection and Affordable Care Act (ACA), and Medicaid expansion are driving dramatic changes in the public health system. Discretionary and programmatic funds previously appropriated for local health departments (LHDs) are being reallocated to other health care initiatives. For example, funders are making decisions about immunization programs based upon the assumption that safety net providers will need to purchase fewer vaccines. The assumption is that with greater access to clinical care, patients may choose to be vaccinated by providers within their health insurance network rather than in LHD clinics. In addition, new federal vaccine recommendations have been added to the pediatric and adult schedules and the cost to fully vaccinate children has increased more than 6-fold since the beginning of the 21st century.2,3 Federal funding has not kept pace with these increases, ultimately making public health immunization providers less able to afford the cost of vaccinations and administration.4 As a result, health departments are exploring new options to help finance these and other services.
Billing at Local Health Departments
Billing third-party payers is not a new strategy for revenue generation at LHDs. In 2001, 31% of health departments reported billing managed care organizations for immunizations.5 A survey conducted during the H1N1 influenza pandemic demonstrated that most LHDs had billing experience for seasonal influenza vaccines. LHDs most commonly billed Medicare (74%) and Medicaid (80%), but 55% billed private insurance plans.6 In 2009, the Centers for Disease Control and Prevention started the Billables Project: Health Department Immunization Services Reimbursement, a project to formally develop capacity within local and state health departments to bill third-party payers for immunization services.7 Project grantees have produced resources, lessons learned, and effective practices to assist other health departments establish billing infrastructure and ensure sustainable programs.
The Billables Project funded National Association of County & City Health Officials (NACCHO) to collect and share the tools and resources that LHDs are currently using. NACCHO developed the Billing for Clinical Services Toolkit, a centralized database of more than 290 resources to support LHDs through the billing process (available at: www.naccho.org).8 The toolkit includes billing guides, recorded webinars, LHD templates, policies, procedures, job descriptions, and implementation strategies. Other Centers for Disease Control and Prevention centers, such as the National Centers for HIV/AIDS, Viral Hepatitis, STD, and TB Prevention, want to expand LHD billing capacity to other clinical services and supported an expansion of NACCHO's toolbox to include resources related to billing in HIV, sexually transmitted infection, and tuberculosis programs.9 In addition, the Centers for Disease Control and Prevention and NACCHO developed the Billing Task Analysis Resource, which walks users with varying levels of billing experience through the billing process and links them to other resources within the toolkit. No other comprehensive resources such as these exist for LHDs that want to implement third-party billing.
NACCHO Profile Study Data on Revenue From Third-Party Billing
While billing for clinical services has been a continuing interest in the public health community, relatively little empirical evidence measuring its practice or impact exists. Using nationally representative data, NACCHO's National Profile of Local Health Departments (Profile) study provides preliminary findings on LHD revenues from clinical services and may reveal to what extent LHDs conduct billing activities. Data from 2010 and 2013 were used to assess changes in revenues from clinical services among LHDs while preparing for and implementing the ACA.10,11 In 2010, approximately 88% of LHDs had some revenue from clinical services from either Medicaid/Medicare or other sources. In 2013, nearly 90% of LHDs had clinical service revenues, roughly equal to the proportion in 2010. NACCHO's findings are consistent with anecdotal evidence indicating LHDs are at varying stages of readiness or intent for engaging in billing activities.
Determining the Need
Whether LHDs should provide billable and clinical services is a source for current debate.12 Some think LHDs should focus exclusively on population-oriented activities.13 Decisions about the types or comprehensiveness of clinical services offered by LHDs will depend upon the resources available to the LHD, community priority setting, and the availability of other clinical care providers within the jurisdiction. Some LHDs have reduced the clinical services they provide and rely more on community partners such as private sector medical providers and community health centers. Despite the current expansion of people insured resulting from the ACA, estimates show that up to 40 million Americans will remain uninsured.14 In rural or frontier areas and in urban communities of the United States, LHDs may be the only accessible provider of clinical services.15
Billing for clinical services can create a revenue stream for LHDs. For example, in 2009, the Georgia Department of Public health generated $1.9 million for immunization services across all LHDs in a centralized state billing model. In 2013, the Arizona Partnership for Immunization, Arizona's immunization coalition, collected $1 million in revenue for immunization services on behalf of Arizona's LHDs. Revenue earned through third-party reimbursement helps ensure that LHDs continue to provide essential services, conduct core public health functions, promote equity, ensure stewardship of public funds, and improve the health and well-being of their communities.7
Revenue from third-party billing may not cover the full cost of clinical services, but it can be an important strategy for LHDs that continue to provide billable services. LHDs need continued support to develop their billing programs in the form of (1) additional training and technical assistance to assess the cost-benefit of billing; (2) information about insurers' credentialing, contracting, and coding processes; (3) internal quality control processes; and, (4) peer support and networking. This support will be essential to developing a body of evidence-based methods that will sustain LHD capacity to offer needed services.15,16
1. Kilgus CD, Redmon G. Enabling reimbursement to health departments for immunization services [published online ahead of print September 10, 2013]. J Public Health Manag Pract. doi:10.1097/PHH.0b013e3182a9dc03.
2. Hannan C, Buchanan AD, Monroe J. Maintaining the vaccine safety net. Pediatrics. 2009;124(S5):S571–S572. doi:10.1542/peds.2009-1542U.
4. Lindley C, Orenstein WA, Shen A, Rodewald L, Birkhead GS. Assuring Vaccination of Children and Adolescents Without Financial Barriers: Recommendations from the National Vaccine Advisory Committee (NVAC), US Department of Health and Human Services. Washington, DC: National Vaccine Advisory Committee Vaccine Financing Workgroup; 2009. http://www.hhs.gov/nvpo/nvac/nvacfwgreport.pdf
. Accessed January 14, 2014.
5. Santoli JM, Barker JE, Lyons BH, Gandhi NB, Philips C, Rodewald LE. Health department clinics as pediatric immunization providers. Am J Prev Med. 2001;20(4):266–271.
6. Lindley MC. Billing practices of local health departments providing 2009 pandemic influenza A (H1N1) vaccine. J Public Health Manag Pract. 2013;19(3):220–223.
10. National Association of County & City Health Officials. 2013 National Profile of Local Health Departments. Washington, DC: National Association of County & City Health Officials; 2014. http://www.bit.ly/1kYwkzN
. Accessed January 24, 2014.
12. Hsuan C, Rodriguez HP. The adoption and discontinuation of clinical services by local health departments. Am J Public Health. 2014;104(1):124–133.
15. Whitmer DA, Hawley SR, Orr SA, St. Romain T, Molgaard CA. Social networks and best practices in public health: the example of regional billing groups. Public Health Nurs. 2006;23(6):541–546.
16. Quintanilla C, Duncan L, Luther L. Billing third party payers for vaccines: state and local health department perspectives. J Public Health Manag Pract. 2009;15(5):E1–E5. doi:10.1097/PHH.0b013e3181a23dd5.