CHARLESTON — A bill backed by the Department of Health and Human Resources would allow local health departments to bill insurance companies at the maximum allowable rate, which could generate as much as $7.7 million, according to a state official.
It may be good timing for the bill, as lawmakers are practically searching under couch cushions for spare change to use as revenue to fill a $354 million budget gap in this fiscal year. The deficit was mostly created by the slide in the energy sector that has negatively impacted severance taxes.
DHHR Secretary Karen Bowling said the move is enhanced by the Affordable Care Act, which expanded Medicaid.
“More people are insured than have been before,” Bowling said. That allows health departments to bill an insurance company for services that were previously done for free. She said health departments will not eliminate charity care for those who cannot afford services.
Dr. Rahul Gupta, State Health Officer and Commissioner for the Bureau of Public Health said the bill will provide flexibility for health departments to diversify their revenue streams.
“For many years, the state has had to subsidize local programs and services,” Gupta said. “As more residents than ever before are insured, we must shift this financial burden from the backs of West Virginia taxpayers to insurance companies.”
Gupta said health departments anticipated significant budget cuts in light of the state’s current revenue situation.
John Deskins, director of the West Virginia University Bureau of Business and Economic Research, said his study found that $3.8 million in clinical services could be generated if all local health departments billed at the same capacity as the Kanawha-Charleston Health Department, and at least $7.7 million if they billed at the same capacity as Monongalia Health Department.
Gupta, who was the executive director of the Kanawha-Charleston Health Department, said the billing efficiencies he implemented there have become a model for the state. He said when the Putnam County Health Department was in financial crisis, he implemented the same practices there, “paramount to restoring their financial solvency.”
The bill will also ensure that evidence-based programs are available to state communities and allows the Bureau of Public Health to assist local departments.
Gupta visited numerous local health departments around the state, and held 10 meetings of the Public Health Impact Task Force last year to prepare the legislation.
The bill has not yet been assigned a number. Neither Gupta nor Bowling said in which chamber the bill will be introduced.
Deskins has recommended combining health departments across county borders. That is not addressed in this legislation.
His report says West Virginia could save $12.5 million or more by consolidating dozens of county health departments into nine multi-county districts.
In the report, Mid-Ohio Valley Health Department Executive Director Drema Mace estimated the savings would be realized by consolidating redundant positions. The report suggests additional research on the idea.
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