With funding increases off the table, health departments need to find ways to get more from current levels of funding. Historically, there have been discussions about the optimized size of departments to leverage economies of scale and back-and-forth discussions over whether categorical or block grants are preferred. A new approach seems especially promising: greater reliance on user fees, which is an opportunity growing in dozens of states around the country.
Public health departments should already be collecting user fees for medical care from health insurers. In 2014, the National Association of County and City Health Officials published a toolkit detailing how to bill health insurers for immunization services and communicable-disease testing.
Since then, however, the potential for health departments to collect user fees has grown tremendously, due primarily to state Medicaid agencies expanding their billable services and adding items like food delivery, housing navigation and employment support. Though opportunities vary by state, options abound: According to KFF, as of late September, 68 Medicaid demonstration waivers had been approved across 48 states and another 33 were pending across 30 states.
By fine-tuning programs, health departments from around the country can utilize these new opportunities to supplement their budgets with user fees. A leading example is the CalAIM program in California, which is a massive restructuring of the state’s Medicaid system. One of its most enticing features is the coverage of services provided by community health workers, such as health navigation, health education, health screenings that do not require a license, and individual support or advocacy. The reimbursement rates are stellar at $26.66 per 30-minute session, with typical community health worker wages around $20 per hour.
These community health worker services can be used for many traditional public health needs, including communicable-disease control, non-licensed case management, health education and community advocacy. Departments can now bill Medicaid to support these programs not only in California but also in Indiana, Minnesota, Oregon, Rhode Island and South Dakota, which have similar benefits.
There are also opportunities to expand services to address root causes of health problems. A program in Oregon, for example, sends Medicaid funding to organizations and outreach workers who work with people experiencing homelessness, with the goal of keeping them in homes. Local health departments could staff outreach workers and bill the state to support such a program. Another example is North Carolina’s Healthy Opportunities Pilot, which is reimbursing for food prescriptions. The program requires a regional food distributor to source healthy food and deliver it to individuals. Nonprofits have stepped into the role, but it could be a program of a local public health department.
User fees offer advantages over other funding options. For one thing, they are easily adaptable. When another pandemic inevitably appears, services funded through user fees can be quickly ramped up to address the challenge — provide more service, collect more in billing — rather than waiting on additional appropriations or grant funders.
They also have the potential to become more sustainable. While most of the new Medicaid services are allowed technically through temporary demonstration projects, states are trying hard to keep them. If these projects become permanent, then departments can rely on Medicaid funding, which is an entitlement, rather than needing annually to persuade policymakers for more funding or apply for additional grants — the current constant struggles.
And it looks like there will be more opportunities soon. Medicare is considering adding new billable services, such as screenings for social determinants of health, that could be conducted by health departments. Health insurers are also noticing how root-cause solutions can have a positive impact on their bottom line and may offer additional billable services soon.
Of course, increased, sustained and just funding for our state and local health departments from the federal government would be best. Moreover, addressing health-related social needs should not be confused with policies that address social determinants of health. But with prospects slim for more outright federal funding for state and local health departments, user fees through Medicaid and other new medical benefits offer immediate relief. Our public health system needs all the resources it can get to keep us all healthy.
Eric Coles is the public health officer at the Tule River Indian Health Center Inc., serving the Tule River Indian Reservation in Tulare County, Calif. He was previously a policy analyst at the National Institutes of Health. A doctor of public health, he also holds a master’s degree in public administration and has an academic background in health economics and policy analysis.
Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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