Submitted on Wed, 2014-11-12
By Bonnie Lu

Uninsured patients are now able to gain private insurance coverage with the Affordable Care Act (ACA), allowing local health departments to generate revenue from a new group of patients.

How to Maximize Revenue with Your Fee Schedule

Whether a health department decides to compete with private practices or not, finding a new revenue source is critical as it closes the gap in budget cuts, keeping existing programs open and current staff on board.

Credentialing & Contracting

Health departments can get started by going through a process called credentialing and contracting. The process has its challenges and clinics will need to think about how getting setup with a billing program will impact areas of clinic operations such as head count and managing private vaccine stocks.

Fee schedules are an area where health departments should ensure they are generating the maximum possible revenue. Many health departments have based their fee schedules on Medicare and Medicaid rates and are billing private payers according to those terms, not realizing they could be getting more money.

Private health insurance companies work very different from Medicare and Medicaid. Payers have their own reimbursement schedules that are usually set at a higher rate than what Medicare and Medicaid charge. If a health department submits a claim to a private payer at Medicaid rates, which are typically at a lower charge, private payers will happily reimburse for the lower rate.

For example, an Illinois health department has the ability to receive $52-$77 for MMR (CPT 90707). However, if they left their fee schedules based on Medicaid rates, they would’ve submitted a claim for $18.70, missing the opportunity to charge the private payer $52-$77.

In addition to missing opportunities to bill at a higher rate, some health departments may not realize they can bill private payers for office visits (CPT 99211) and/or each immunization administered (CPT 90471).

Resources for Getting Started

So where can health departments go to get some guidance on fee schedules? If you’re already contracted with a private payer, take a look at your contract or talk to your representative.

Health departments can also start by talking to other nearby health departments, especially those who have been billing private insurance for a while. Although reimbursement rates will vary by payer and by region, talking to those nearby will give you an idea of reimbursement rate ranges in your area.

Another resource is your public health association, professional groups, and immunization coalitions. Because they work with health agencies across the state, they can identify which counties you can speak with to get more insight. Upp Technology conducts free revenue analyses and can help health departments uncover potential revenue for their health departments.

As health departments continue to operate with reduced budgets, having an updated fee schedule to maximize revenue potential with private payers can help minimize the impact of budget cuts.

 

Stay tuned next week when we review the most important things you need to think about when setting up a fee schedule and hardship policy with your new fee schedule.

Do you have any thoughts or best practices when it comes to developing your fee schedule? We would love to hear about them. Simply contact one of our public health billing experts or schedule a meeting to share your feedback and discuss what’s working and what’s not working for other local health department’s from across the nation.

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