Cost-Benefit Tool for STD Clinics to Estimate Return on Investment of Billing Third-Party Payers

Background:  Public funding for HIV and STD clinical services has decreased over the past five years, making it more difficult for traditional safety net providers to ensure access to HIV and STD services. A 2013 Centers for Disease Control and Prevention (CDC) study showed that the uninsured population’s clinical needs exceed safety net funding and would continue to exceed funding for the 10 years that the study modeled. Provisions in the Affordable Care Act, including increased insurance coverage and ensuring essential community providers are included in qualified health plans, may make billing third-party payers an increasingly viable complement to grant funding for essential community providers, like STD clinics. To assist clinics evaluate return on investment in billing infrastructure, a cost-benefit tool was developed for STD clinics.

Methods:  A cost-benefit evaluation was developed in Excel. Equations for revenue projections include payer mix, number of annual visits, evaluation and management CPT codes, estimated reimbursement for new and established patients for Medicaid and private insurance companies, collection rates, and denial rates. Costs of billing include staff, software, hardware and direct claim costs. Billing costs are subtracted from revenue to determine net revenue. The tool was tested using payer mix, annual visits, costs, and actual net revenue from a clinic and comparing it to the tool’s net revenue projections.

Results:  The results showed the cost-benefit projections were within 10% of actual net revenue.

Conclusions:  With public funding for HIV and STD services on the decline, this tool offers STD clinics a way to calculate return on investment for initiating or expanding billing with third-party payers.