Timing of Clinical Billing Reimbursement for a Local Health Department

Objectives

A major responsibility of a local health department (LHD) is to assure public health service availability throughout its jurisdiction. Many LHDs face expanded service needs and declining budgets, making billing for services an increasingly important strategy for sustaining public health service provision. Yet, little practice-based data exist to guide practitioners on what to expect financially, especially regarding timing of reimbursement receipt. This study provides results from one LHD on the lag from service delivery to reimbursement receipt.

Methods

Reimbursement records for all transactions at Maricopa County Department of Public Health immunization clinics from January 2013 through June 2014 were compiled and analyzed to determine the duration between service and reimbursement. Outcomes included daily and cumulative revenues received. Time to reimbursement for Medicaid and private payers was also compared.

Results

Reimbursement for immunization services was received a median of 68 days after service. Payments were sometimes taken back by payers through credit transactions that occurred a median of 333 days from service. No differences in time to reimbursement between Medicaid and private payers were found.

Conclusions

Billing represents an important financial opportunity for LHDs to continue to sustainably assure population health. Yet, the lag from service provision to reimbursement may complicate budgeting, especially in initial years of new billing activities. Special consideration may be necessary to establish flexibility in the budget-setting processes for services with clinical billing revenues, because funds for services delivered in one budget period may not be received in the same period. LHDs may also benefit from exploring strategies used by other delivery organizations to streamline billing processes.Among the 10 essential public health services that all public health departments are expected to perform is the responsibility to “link people to needed personal health services and assure the provision of health care when otherwise unavailable.”¹ As such, health departments are often involved in directly providing public health services within their jurisdiction.^2,3 These direct services are costly to provide, but many health departments provide direct clinical services because of their sizable impact on population health⁴ and a health department''s role in assuring the provision of health care when otherwise unavailable.^5,6 Immunizations provide an example of financial pressures facing many health departments.Vaccinations prevent more than 14 million incident cases of disease and 33,000 deaths per year,⁷ and LHDs play a critical role in assuring access to vaccinations within their jurisdiction. Approximately 85% of all local health departments (LHDs) provide immunization services⁸ and deliver one of every seven vaccinations in the United States.⁹ Since 2000, the number of recommended vaccines has more than doubled and the cost to purchase these vaccines has more than tripled.^9,10 At the same time, half of all LHDs have seen their core budgets cut because of the 2008–2010 recession.¹¹ These trends mean that health departments can no longer provide all services with government funding and increasingly rely on billing Medicaid or private insurance to backfill some of these cuts.^10,12 Thus, billing for services such as vaccinations has become a widely practiced method of recouping revenue to support the provision of public health services by LHDs.¹² An emerging consensus suggests that billing for services provided to individuals with health insurance ensures equitable and efficient allocation of program resources toward individuals truly unable to afford it (i.e., those without health insurance).¹³Partly because of these factors, more than 80% of LHDs report plans to begin new billing activities or expand billing activities.¹⁴ Widespread adoption of billing by LHDs is at least partially supported by the considerable technical assistance devoted to creating resources to facilitate billing for clinical services.¹⁵ Brief case reports from several successful LHD and state health department clinical billing efforts have been reported.¹⁶However, multiple challenges confront many LHDs that are beginning or expanding clinical billing: licensing or credentialing staff members, receiving Medicare or Medicaid qualifications, contracting with private insurance payers, establishing billing systems and protocols, and training staff members in completing and submitting claims.¹⁷ Furthermore, in some states, health departments face complex statutory requirements that may preclude billing some patients'' insurance providers for certain services.¹⁸ Some health departments are required to receive certification as essential community providers to contract with private health insurance plans.¹³ After navigating these issues, health departments vary in their statutory ability to set prices for services (vs. authority to set reimbursement amounts determined by state statute) and retain billing reimbursements within the department (vs. having to remit these funds to a county or state treasury).¹⁸ Insofar as health departments engage in billing to recoup some or all of the costs of providing services, how much reimbursement a department receives and when it receives it are critical issues, given the regimented nature of the annual budgetary processes at most LHDs. To date, the scholarly literature lacks empirical evidence in both of these areas. This study explored reporting results from one health department on the lag from date of service to receipt of reimbursement.