Submitted on Tue, 2013-12-03
By RADM Craig Vanderwagen, M.D.

The lessons from Indian Health are many. A local health department can im­plement a robust revenue generation pro­gram to enhance its ability to meet its health mission. The process is quite efficient in generating revenue without significant expansion of cost to generate that revenue.

indian health system billing program

Dr. Craig Vanderwagen, the Founding Assistant Secretary for Preparedness and Response, served at the Indian Health Service for 25 years where he held a number of positions including the agency’s Chief Medical Officer. He provided leadership in the uses of electronic health records, implementation of the use of best practices to combat chronic diseases, and was an early supporter of, and the agency’s lead negotiator for a majority of the early Self Governance Compacts. Read Bio


The recessionary forces at play in the US (and globally) since 2008 have had a significant effect on the viability of public sector health programs. Although the medical sector has continued to show real growth in both services and revenue, public health programs have been in severe decline. To address this dilemma it has been proposed that public health departments develop and utilize systems of reimbursement for their services by capitalizing on insurance programs. Public Health has been hesitant to enter into the billing and claims arena for both philosophical and more technical reasons, but it’s becoming necessary for their long-term health. Using the Indian Health Service (IHS) as a real-life example, I’ll walk through the importance of revenue generation in the public health programs.

The Revenue Challenge

Indian Health Service is a federal program of comprehensive health services authorized under the Indian Health Care Improvement Act, but originating under the Snyder Act. It is predicated on treaty relationships with federally recognized tribal nations wherein the federal govern­ment agreed to provide health services in lieu of lands ceded by those tribal nations.

The agency is funded by the U.S. Con­gress and although Congress has shown great commitment to the health of Ameri­can Indians and Alaskan Native, through­out the 1980’s and 1990’s appropriations were unable to keep up with rising health costs. Although health care costs overall inflated at a double digit rate, the appro­priations for Indian Health rose only by 2-3% per year, and the available per cap­ita funding was at approximately 50% of that spent in the US throughout that pe­riod. This has left many health needs unmet and tribal leaders, Indian communities, and providers extremely disheartened at their inability to meet those health needs. Advocacy for these needs was strong and included compelling documentation of the excess morbidity and mortality affecting the communities. Nevertheless, appropriations remained relatively level. The Office of Management and Budget strongly encouraged the Indian Health Service to utilize its authority to bill for services through identification of individuals who were eligible for insur­ance coverage, whether through public programs (Medicare and Medicaid) or private insurance.

Starting a Billing Program

The agency began the effort with con­cerns over the challenge of learning new processes and recruiting and train­ing the staff needed to implement the billing program. The accountability and oversight responsibilities were significant. There were providers who felt quite negatively about it, since, in their view it would add to the bureaucracy, take the organi­zational focus from services to revenue generation, and generally change the philosophical tone from doing good work to generating cash. These factors led to leadership challenges in clarifying the mission and in nurturing support and commitment to a different way of functioning. Clarifying and con­sistently pushing the revenue generation program to enhance the ability of the IHS to provide more needed services led to most of these challenges being overcome.

To meet the challenge, outcome goals were established for the program. The goals focused on revenue generation with tight cost controls for the implementation of the program itself. There were audit goals established and oversight expecta­tions articulated. But the outcome goals of the organization in achieving better health status for the population served were consistently the highest priority. Specific outcome measures for programs funded by the increased revenue were established. Thus for example, decreases in amputation rates for diabetic patients were established as targets for program activities. So, while management of the revenue generation process had internal targets for cost per bill generated, even the billing clerks were included in team efforts to improve the health of the popu­lation served. The primary mission of the organization remained the benchmark for performance while implementing this activity.

The activity was successful in achiev­ing the goal of increasing the revenue stream. In the period 1990-2000, billed receipts increased from under $100 million in 1990 to approximately $400 million in 2000 and in 2008 the revenue approached $800 million (the appropri­ated budget for IHS services and facilities construction for 2008 was $3.5 billion). This clearly allows for additional services that would otherwise be unavailable since this is a 22% increase over appro­priations. The health outcomes have also risen in that timeframe with significant declines in morbidity and mortality that are well documented. The cost of gener­ating that revenue has remained a small fraction of the accounts receivable and the program has become more efficient through the use of electronic means for bill generation and recovery.

The Lesson

As public health departments are being degraded in the current fiscal climate, the lessons from Indian Health are many. With a clear mission to improve health, a local health department can im­plement a robust revenue generation pro­gram to enhance its ability to meet its health mission. The act of focusing on revenue generation through billing is no more distracting than chasing grant funds. Indeed, if electronic systems are used that link to a patient health record, the process is quite efficient in generating revenue without significant expansion of cost to generate that revenue

With budget cuts an ever-looming threat, maximizing the revenue you are able to collect will allow your health department to flourish. You can rely on Upp Technology’s knowledge and experience to help you set up a billing program quickly and with minimal effort on your part. Give our public health consultants a call today so you can get your billing program started today.