Billing for Direct Services

Health Departments as Providers: Billing for Direct Services Produced by Health Resources in Action of Boston for the Maricopa County Department of Public Health Care Shifting to Medical Homes, Need to Protect Scarce Discretionary Funds The implementation of the federal Patient Protection and Affordable Care Act (ACA) will require local and state health departments to reconsider their roles in the provision of direct services. As significant numbers of previously uninsured individuals become insured, safety net care will shift towards clinical settings. In particular, the expectation and funding for preventive services, traditionally provided by the public health sector, is shifting largely to primary care settings. This trend, combined with layers of cuts to public health- especially to programs seen as now covered by insurance, requires health departments to consider what adjustments they might make to their portfolio of services. Among the options are to: 1) continue to provide direct services, but seek reimbursement; 2) assume a lead role in assuring access to clinical preventive services without being the primary provider; and/or 3) leverage public health practice to guide the development of patient-centered medical homes (1). Embedded through each of these options is a strong recommendation to establish formal relationships with health plans. Public health departments need to continue to make the case to insurers that public health interventions can reduce health care costs. Public health providers are particularly poised to provide preventive services to vulnerable populations, like those that will remain uninsured or underinsured after the ACA is adopted. And, reimbursement for preventive services will ultimately save insurance companies money. In Akron, Ohio, the Accountable Care Community demonstrated that its diabetes selfmanagement program and programs that augmented medical care and provided secondary and tertiary prevention reduced average monthly costs of care for individuals with diabetes by more than 10%. Understanding the cost-saving and cost-effective interventions will help to build relationships with insurers. The first step to establishing a formal provider relationship with health plans is sending a letter of intent, including a list of all billable providers (M.D., N.P.). After the insurer accepts the letter of intent, they will likely issue a contract for review and approval by counsel. There may be a need for negotiation about non-standard contract language (2). As part of becoming a reimbursed provider, the health department should look more into the various financing options described in HRiA s recommendation report. The Massachusetts Experience: Plan for Change Since the Commonwealth of Massachusetts passed comprehensive health reform in 2006, the MA Department of Public Health (MDPH) experienced major budget funding cuts as the economy crashed and the overall state budget was squeezed to increase spending on health insurance for low-income residents. This forced changes and hard decisions for the health department, at the same time as it was absorbing increased work to explain new health insurance options to staff and clients. MDPH s experience showed that there is continued need for public health to provide services for the remaining uninsured and importantly underinsured residents (3). In order to promote the medical home

as the center of care and strategically target reduced discretionary funds, MDPH scaled back funds to STD clinics. It has adopted a hybrid approach to providing direct services by ending its role providing operating support for STD clinics and seeking reimbursement for its role in other direct services. Their primary foci for the future of preventive and clinical services are assuring access to preventive services and integration of disease-specific treatment into primary care settings. Leaders and staff from MDPH emphasized the importance of planning as quickly as possible for the changed role of public health. They report that negotiations with health plans and hospitals can be timely and in Massachusetts, often required the Commissioner s direct involvement to move forward. MDPH found that planning for and educating staff about the changes and how to work with insurers and clients regarding billing was essential. Many staff had fears and concerns about what the change would mean for their programs and clients. To date, health outcomes in the relevant diseases are stable or improved, so the program shifts did not have the negative impact on the public health department that was anticipated (4). Recommendations for Becoming a Provider/Billing for Services There is a spectrum of approaches that health departments can take to begin billing insurers and supporting subcontractors - like clinics - to bill for services they previously provided for free or a modest fee. A combination of these approaches is recommended: 1. Central Planning and Coordination. The health department might consider designating staff and a central billing office to coordinate and support the establishment of billing and relationships with health plans across departments. This office should also support the creation of an electronic billing platform a system through which a health care provider can electronically submit for payment from a health insurance company for the rendering of services - and offering education and training of staff. 2. Establish relationships with health plans. Meet with private health plans and market relevant MCDPH services (e.g. home visiting, community health workers and chronic disease selfmanagement), demonstrating ROI and costeffectiveness, emphasizing relevant Essential Health Benefit services and unique needs that make health departments an essential provider. For example, adults are not getting cost-effective immunizations and screenings at rates they should within primary care settings, so additional strategies and sites are needed to increase uptake rates that may be provided (and billed) by health departments. Massachusetts used this strategy successfully with payers. Furthermore, because isolated, rural communities in Alaska s frontier areas that have long relied on community health workers to provide health education and care, the State of Alaska has recognized community health aides/ practitioners (CHA/P) as billable providers for Medicaid reimbursement. CHA/P services are billed similarly to other medical professional services (5). 3. Become a Public Agency Community Health Center. Health departments may be eligible to become Public Agency Community Health Centers and qualify for federal Section 330 funding if they meet a range of requirements, including a consumer-directed board, providing case management services, and a continuum of services to patients-- either directly or through formally established arrangements (6). For instance, MCDPH could build off of the Federally Qualified Health Center (FQHC) status of its Homeless Clinic to grow the services it provides that are eligible for reimbursement (7). Among the advantages of becoming a Public Health Center are: eligibility for federal grants to support the costs of uncompensated care; enhanced reimbursement from Medicaid; reimbursements from Medicare and the Children s Health Insurance Program (CHIP); access to funding opportunities for the operation, expansion, and construction of health centers through the Community Health Center Fund, and the ability to participate in the 340B Drug Pricing Program (7)(8). Health departments as providers: Billing for Direct Services 2

4. Referral Arrangement. Health departments could develop referral arrangements with local health centers or other providers. In this cooperative arrangement, both organizations retain their own scope of service and agree to use the other as the referral site for specific services. MCDPH should review their own portfolio of services and plan for referrals based on local information. For example, MCDPH s Health Care for the Homeless Clinic (HCH) staff might make referrals to and provide education about the Recovery Through Whole Health medical home model in order to help ensure that no SMI patients are lost during the transition process. Other MCDPH programs might be positioned to make referrals based on their role in immunization clinics or dental services. 5. Contracting to provide specific services. Health departments could offer specialized services such as community health workers, nurse home visiting, outreach and enrollment and Chronic Disease Self Management (CDSM) services. These services will likely be in demand by hospitals or community health centers, which may contract with MCDPH via a purchase of service agreement. The provider would reimburse the health department for services and bill third party payers directly. 6. Becoming a Network Provider/Essential Provider. Health departments could become an in-network provider for as many health plans as possible so that there are no deductibles and co-pays for clients - and they can be reimbursed for whatever billable services are provided. One efficient mechanism to assure that health plans establish contracts with health departments is if health departments are considered essential community providers. The ACA requires that certified plans sold through the Marketplace/ Exchange include in their network essential community providers (ECP), where available, that serve predominantly low income, medically underserved individuals. These include, but are not limited to, safety net providers who are eligible to participate in the 340B drug purchase program in these categories: Federally Qualified Health Centers (FQHCs), Ryan White providers, family planning providers, Indian providers, specified hospitals, and others. In some states, such as Minnesota, the state health department has a role in accepting applications and determining essential community providers (9). Other than STD and TB clinics, health departments per se are not among the already specified essential community providers in the ACA, but there is still the possibility and opportunity to be included in that list. The Secretary of the U.S. Department of Health and Human Services (DHHS) will provide more guidance on the ECP provisions of the ACA, and thus there is still a window to educate federal policy makers about why health departments are indeed essential community providers. Without essential provider status, it is more challenging but still recommended to go through the process of becoming an in-network provider. The ECP designation is a Centers for Medicare and Medicaid Services (CMS) determination. The National Association of County and City Health Officers (NACCHO) and the Association of State and Territorial Health Officers (ASTHO) are currently in discussions with CMS administrators about including health departments on the ECP list. Local and state health departments might contact NAACHO and ASTHO colleagues to offer their interest in and support for this issue. 7. Contracting with an intermediary administrator. Some states, like Massachusetts, have contracted with an intermediary company to set up contracts with and bill private insurers for adult flu and pneumococcal vaccine clinics. The intermediary provides training to local public health providers to understand the insurance information and billing process, in addition to taking on the role of electronic billing of the insurers for vaccine purchase and administration and electronic payment of providers. The intermediary, the University of Massachusetts Commonwealth Medicine s Center for Healthcare Financing, retains a fee of 10 % of claims received to provide this service. 8. Administrative Medicaid. CMS has established mechanisms for eligible entities to claim a portion of costs necessary for the administration Health departments as providers: Billing for Direct Services 3

of the state Medicaid plan, including: Medicaid eligibility determinations Medicaid outreach Prior authorization for Medicaid services Early and Periodic Screening, Diagnostic and Treatment (EPSDT) administration Third party liability activities Utilization review There is precedent for health departments to bill for Administrative Medicaid, but it must be through an arrangement with the state Medicaid agency and necessitates completing a time study of relevant employee activity to determine what percentage of their time might be billed to Medicaid for these administrative services (10). Setting up a system for billing (2)(11) Credentialing. Credentialing is a fundamental part of the process for medical billing and the organization and its providers must be credentialed as participating providers before claims can be filed with private insurance companies, Medicare or Medicaid. The credentialing process should include all physicians, nurse practitioners, physician assistants, health clinic/ group, community health workers, and laboratory (2). The credentialing process can vary from insurance company to another. In some companies, a Credentialing Specialist gathers information from providers to complete the credentialing process. However, many companies are part of a universal credentialing system. The Council for Affordable Quality Healthcare (CAQH) is a centralized database that collects information from providers, groups, and laboratories for credentialing purposes. Payers can access and verify credentialing information submitted by individual providers, healthcare groups, and others. Information is updated quarterly. Participating in the CAQH database eliminates the need for health plans to complete individual credentialing (12). Note: See the special subject factsheet on Community Health Workers regarding special credentialing and certification issues for this workforce. Establish fees for services. Health departments must first evaluate the cost of delivering services. Fees should be set by comparing the actual cost against the usual and customary fees to the reimbursement rates set by Medicaid and Medicare for services (2). Third party payers generally have a pre-established contract price for each Current Procedural Terminology Code, aka CPT-code used for billing purposes. MCDPH should bill all insurers using the highest reasonable fee, but anticipate that the payer will only reimburse based on their contract price. Commercial insurers and government payers often have different fee schedule set-up requirements (11). Set up a Sliding Scale Fee Schedule. Establishing a sliding scale fee schedule will allow fees for mandated services to be reduced or waived for those clients who are unable to pay. Services that are waived or provided at a reduced fee for low-income clients can be billed at the set fees for clients with an ability to pay (2). Obtain approval from governing body. In some jurisdictions, the establishment of a new fee structure requires approval from a governing body like the Board of Supervisors, and the fee must be set into the County ordinance codes. Prior to official approval by the governing body, the health department might have to provide official notice to the public. In Kern County, California the entire process took about six months (2). Legal counsel should be consulted for jurisdiction-specific requirements at the beginning of the planning process. Collect patient information needed for billing. Accurate patient profiles are essential in implementing a billing structure. The health department should create a comprehensive patient demographic form to be completed prior to administration of the service (2). Verify eligibility and insurance. Though it can be timely, verification of eligibility and insurance is an important step in the billing process. Without verification, the health department might have associated costs for denied claims and loss of copayments/coinsurance and deductibles. Billing staff can work directly with the health insurance company by calling the customer service number, can verify by using a private insurers verification website or can work with a clearinghouse company (which often has an associated fee) (2). Code the service. Coding services by assigning a number to a narrative description of diseases, injuries, and healthcare procedures - is the last step needed prior to submitting for reimbursement for a service provided. Coding helps to accurately organize and submit data for claims reimbursement, evaluation of healthcare processes and outcomes, and case Health departments as providers: Billing for Direct Services 4

management and planning. There are a number of organizations and web-based tools available to help provide coding and billing resources (2). Technical Considerations Several states including California, Kansas, Ohio and New York have piloted programs through which they created systems for billing for immunization services. More information about each of the programs is included in the NACCHO Immunization Toolkit found here: (http://www.naccho.org/toolbox/index.cfm?v=4&id=243&topicname=billing) (13). NACCHO has compiled links to resources for billing and is currently developing additional tools to help health departments bill for services. 1. Increased Need for Information Technology The integration of public health and clinical services means that there is an increased need for integrated data sets to assess, survey and evaluate health information. There are growing opportunities for health departments to access, analyze and use data including census reports, vital records, reportable disease registries, electronic medical records, laboratory reporting and hospital discharge records - for planning and resource targeting. This opportunity will require state and local health departments to strengthen capacity and infrastructure for IT, as well as a trained workforce (14). Financing for more robust health departments infrastructure will come from a variety of sources. For example, health departments might tap into a portion of funds designated through the hospital health improvement planning process. Refer to HRiA recommendations report for a fuller discussion of financing options for public health functions and capacity building in the context of health care reform. Health departments could create or enhance an Electronic Patient Management System (e.g. practice management system, electronic health record, hospital-based record, etc.) to manage data and improve billing processes. Other health departments report that there are numerous steps needed in order to get their systems set up properly to bill Medicaid, Medicare, and private insurance carriers (2). 2. Need for Staff Training Training staff in the following concepts will improve the accuracy of billing and the quality of care provided: Coding Certification Although not required, certification provides staff with a strong foundation of coding concepts, rules and regulations that can be applied when billing for services. This might improve compliance within the organization and reduce the possibility of inaccurate billing that could result in a pay back to the payer (2). Medical Documentation - Complete and accurate medical documentation ensures the ability of health care professionals to evaluate and plan the patient s immediate treatment and to monitor their health care over time; enhances communication and continuity of care between physicians and other health care professionals involved in the patient s care; increases likelihood of accurate coding; helps establish medical necessity, and; ensures appropriate utilization review and quality of care evaluations. Health Information Technology (HIT) With the implementation of the ACA, HIT will play an important role in improving quality, reducing costs, and delivering patient centered care. An increased reliance on health data and information technology in our health care system means that providers will need to train, develop and retain highly skilled health information technology (IT) staff. The U.S. Bureau of Labor Statistics estimates that 51,000 health IT professionals will be needed for the nation to successfully become meaningful users of health IT systems (15). It may be useful for MCDPH to hire an HIT consultant to develop an overall HIT plan that conforms with the health department s ACA planning efforts. Health departments should look to NACCHO for future guidance in this area. www.naccho.org Summary: Given that a significant number of vulnerable Arizona residents will remain uninsured after the adoption of the provisions of the ACA, and that certain safety net services will continue to be appropriately offered by the health department, it behooves the public health agency to learn more about, and implement, billing mechanisms to help maximize revenues to direct funding for needed public health functions. Health departments as providers: Billing for Direct Services 5

As detailed in the technical report, HRIA recommends that MCDPH consider billing for direct services provided. Among other reasons, public health departments can no longer afford to provide all preventive services free of charge but, as the Massachusetts experience has demonstrated, there is continued need, even after near universal coverage, for wraparound and critical services for continued uninsured and underinsured residents. There are a number of related issues that require further exploration that is beyond the scope of this brief. Some public health advocates believe that health departments should move away from direct services all together and focus solely on strategies to improve population health. Exploration into the potential downsides to billing for direct services, and what the future of the safety net might be, should be explored in more depth. The Massachusetts experience indicates that health departments should build relationships with non-traditional sites of care, like pharmacies, because these partnerships have led to enhanced access to care. Additional research might explore how the ACA will impact the role of retail pharmacy/clinics in the provision of direct care, which other private sector players might become involved, and how health departments might partner with them to bill for services. MCDPH might explore how, as a provider it could tap into the hospital assessment provision of Medicaid reform. As a provider of direct services, MCDPH should form relationships with ACOs. In other states, newly formed ACOs are formally vetted by the local health department. Additional research would help to better understand which payment reform model (PMCH/ACOs) is the best fit for the health department and what the role MCDPH might have in the development of ACOs in the area. References - FinalCaliforniaBillingPlan.pdf [Internet]. Available from: http://psbweb.co.kern.ca.us/ph_internet/pdfs/hottopic/ FinalCaliforniaBillingPlan.pdf 3. Taylor T. The Role of Community-based Health Programs in Ensuring Access to Care Under Universal Coverage [Internet]. 2009. Available from: http://www.apha.org/nr/ rdonlyres/48621efe-9732-4744-83a2-1389763d65d8/0/ CommunityBasedReformupdtd.pdf 4. Cranston K. Public Health and Primary Care Integration: Some infectious disease examples from a health reform state. 2012. 5. Dower C. Advancing Ccommunity Health Worker Practice and Utilization: The Focus on Financing [Internet]. 2006. Available from: http://futurehealth.ucsf.edu/content/29/2006-12_ Advancing_Community_Health_Worker_Practice_and_ Utilization_The_Focus_on_Financing.pdf 6. National Association of County & City Health Officials. Public Agency Community Health Centers: An Opportunity for Local Health Departments. Washington, D.C.; 2010. 7. Prepared by Feldesman Tucker Leifer Fidell LLP for the National Association of Community Health Centers. Partnerships between Federally Qualified Health Centers and Local Health Departments for Engaging in the Development of a Community-Based System of Care. [Internet]. [cited 2013 Jun 5]. Available from: http://www.naccho.org/topics/hpdp/ upload/partnerships-between-fqhcs-and-lhds_final_11_03_10. pdf 8. Health Centers and the Affordable Care Act - healthcenterfactsheet.pdf [Internet]. Available from: http:// bphc.hrsa.gov/about/healthcenterfactsheet.pdf 9. Minnesota Department of Health. Essential Community Providers [Internet]. [cited 2013 May 13]. Available from: http://www.health.state.mn.us/divs/hpsc/mcs/ecpmain.html 10. Medicaid Administrative Claiming Medicaid.gov [Internet]. Available from: http://www.medicaid.gov/medicaid- CHIP-Program-Information/By-Topics/Financing-and- Reimbursement/Medicaid-Administrative-Claiming.html 11. Ohio Department of Health. Local Health Districts Frequently Asked Questions About Billing. 2012. 12. California s Innovative Immunization Billing Project Plan - FinalCaliforniaBillingPlan.pdf [Internet]. [cited 2013 Jun 27]. Available from: http://psbweb.co.kern.ca.us/ph_internet/ pdfs/hottopic/finalcaliforniabillingplan.pdf 1. Georgia Health Policy Center at Georgia State University, National Network of Public Health Institutes. Leading through Health System Change: A Public Health Opportunity - Planning Tool. 2. California s Innovative Immunization Billing Project Plan 13. National Association of County & City Health Officials. The NACCHO Immunization Billing Toolkit [Internet]. 2012. Available from: http://www.naccho.org/topics/hpdp/ immunization/upload/billing-toolkit-information-fact-sheet. pdf Health departments as providers: Billing for Direct Services 6

14. Robert Wood Johnson Foundation. Transforming Public Health [Internet]. 2012. Available from: http://www.rwjf. org/en/research-publications/find-rwjf-research/2012/06/ transforming-public-health.html 15. Health Resources Services Administration. Health Information Technology Workforce. Health departments as providers: Billing for Direct Services 7