Category Archives: Substance Abuse Billing

Drug Rehabs Marketing Focusing on education

Drug Rehabs Losing Business Focus

Drug rehabs during 2018 and for approximately the last five (5) years have been experiencing a trend which has been infecting the financial health and welfare of the addiction treatment industry. Dale Redlich, CEO of Pay2Patient and well respected past treatment center owner for over 20 years provides this article with his insight on some issues that owners are facing in our industry with this article.

A Snapshot of the business and Drug Rehabs Marketing Side

Drug rehabs have been experiencing a trend that has manifested itself in recent years with;

  • downsizing
  • bankruptcies
  • selling off of assets
  • staff firings
  • lack of staff replacement
  • lack of staff additions
  • lower staff salaries
  • changes in marketing techniques
  • development  of joint ventures with financially sound publically traded companies
  • mergers and acquisitions

In addition, there is a desperate attempt by many owners and operators of addiction treatment facilities (including the detoxification and lab segment) to develop banking, investment, and other financial relationships which might result in an infusion of new capital into an otherwise unhealthy marketplace. Basically, inexperienced owners and operators where wasting financial resources hand over foot all in an attempt to “out do “ their competitors in order  to try to offer more and more luxury within their drug rehabs as they were attempting to compete for a very limited supply of high paying clients

This trend has and will continue to affect not only full-service outpatient, PHP, inpatient, and residential addiction treatment centers West Palm Beach and across the nation, but also all of the ancillary support businesses including, sober living facilities, halfway houses, and private practice therapists as well as labs.

Drug Rehabs Pain Points

Drug Rehabs and Addiction Treatment Centers warning SignsThe signs have been evident for a substantial time period, but the problem has been and will continue to grow more severe as time continues. The reasons for this trend varies but in general, it can be seen as being attributable to a number of predictable factors such as;

  • a severely growing level of competition for the same patients,
  • changes in the number of payments made for treatment by the insurance industry
  • new and far-reaching legislation which has severely limited the ability of such facilities to engage in traditional marketing
  • a lack of sufficient capital from an operational standpoint
  • rapid and unnecessary expansion
  • an attempt to offer only the most high priced luxury

It may also be seen as a failure of the new wave of financially inexperienced and undercapitalized owners who have been unable to foresee such trends and also have miscalculated the effects of massive changes occurring in the insurance marketplace both for in network and out of network providers.

Insurance Companies Controlling the Drug Rehabs

insurance-companies-not-paying-drug-rehabsOne area which evidences this trend in the insurance industry. It is the growing direction for providers to attempt to change from out of network to full in-network providers. Most facilities these days are desperately becoming only in-network providers even though the amount per day paid by the carriers for in-network benefits has steadily been falling.

No longer do the carriers have to devise methods to try to forced drug rehabs to become in network.  It was only a few short years ago when the carriers were paying exorbitant amounts per day to out of network providers and the thought process of owners at that time was to remain out of network in order to reap the benefits of the absurd amounts of money which the carriers were paying for out of network benefits.  This could not continue forever.

In fact , there were some insurance carriers such as Federal Blue Cross Blue Shield and Empire in Florida which continued to pay large unsustainable amounts  for all of the services insurable but rather than paying the provider the carriers were ( and some continue ) issuing their reimbursement checks directly to the patient or subscriber which resulted in many cases, and still does so result, in  the insurance checks being cashed by the patient and the provider never realizing its fees for services rendered.

Understanding Drug Rehabilitation Centers Money Owed

Behavioral Health Collections for Drug RehabsObviously, this was and continues to damage the providers financially as they are rendering services in good faith but never receiving the checks from the carriers.  The reality is that many providers did not even realize that their check-in reimbursement for services rendered had not even been sent to them by the carrier. Some of the providers were losing exorbitant amounts of money in this fashion and in some cases not even realizing that this was happening.

The result of all of the above circumstances is that the drug rehabs have split into the “have’s” and “have-nots”.  If you attend industry events you will likely realize that not only have the attendance numbers plummeted but the actual exhibitors themselves are often comprised only of the larger most well funded (and often time owned by publically traded companies). Many centers are looking for smaller, focused events that also provide business and drug rehab marketing education to survive the competitive landscape. In addition, they need to implement strategies of how to properly prepare for these addiction conferences.

It is unbelievably expensive for a facility to finance large numbers of their marketing staff to attend these events where they are actually only marketing to other marketing staff from other facilities. This is financial lunacy, without getting educated on proven business and marketing strategies, unless the provider has extremely deep pockets which some of them still do.

The savviest operators now realize that the money which used to be spent on traditional marketing and attendance at events that do not provide proven business and drug rehab marketing practices is much better utilized with drug rehab SEO, social media and other types of online selling of their services. One of the biggest mistakes they make is using boots on the ground as their main marketing strategy. Without a robust, healthy and planned marketing mix, many are at great risk of closing their doors.

Getting Control Over Debt Collection and Revenue Cycle Management

So, where does this leave us? The purpose of this article is not to claim that we have the one and only solution to the financial problems stated above which have grown in recent years

increasing lost revenue with debt collection for drug rehabsHowever, at the same time that are certain methods which at almost no cost can result in the infusion of additional capital into a sagging P/L statement. Debt Collection with revenue cycle management for drug rehabs is one potential partial solution to the financial problems being experienced in the healthcare industry and in particular, the addiction treatment industry.

The collection of a debt is a financial strategy which has been around since the time of the money lenders in biblical times. If a company lends money, or advanced money or fails to receive legitimate funds on component aspects of its business it should be entitled to take appropriate action steps to recover the resulting debt if such debt is attributable to the loan or advancement of funds to the potential debtor. There is nothing immoral about a company taking steps to collect its fair debt, In fact, it is business malpractice not to go after the fair debt which is owed.

What is Drug Rehab Revenue Cycle Management?

Revenue Cycle Management is a fancy way of describing the method of tracking accounts receivable and utilizing such funds at the appropriate time to pay operational internal debt on an ongoing and predictable basis.

Pay 2 Patient, LLC is not a billing company but strictly a debt collection company and also assists its clients in the RCM process so that the client is able to pay operational expenses as such becomes due. The collection of debt provides the company which is owed money to collect at least a portion of what is owed and thereby add to the pot of financial resources available to pay expenses. There are some addiction providers we know that have been owed millions of dollars in uncollected debt and ultimately had to go out of the business of course.

Reclaiming Precious Operating Capital

The problem experienced by the addiction treatment industry now in many cases is that the provider company has not taken sufficient steps to ensure that it has sufficient operating capital each week or each month to pay operational expenses when due.  The money gets spent in a variety of other ways as described above. And often times there are is no margin of error which results in layoffs and other dire consequences.

It defies our understanding of why a health care provider which is owed money would not take every reasonable and legal action to collect money which it is owed. It seems to be lunacy but at the least very bad business practice.

Reclaiming Receivables Doesn’t Cost Much

Substance Abuse Billing #1 Costly Mistake for drug rehabsThe ROI to employ debt collection methods is so low as to beg for utilization.  The process is very simple but at the same time there are Federal and State regulations which must be complied with and of course, the privacy of the patient/debtor needs to be protected. This can all be accomplished by utilization of the proper documentation.

Don’t get me wrong. It is not easy to collect the debt, especially the kind of debt when the carrier has sent the reimbursement check to the patient and the check has been cashed.  Retrieval of those checks, or the cash itself, is very difficult, but none the less doable.

Collections methods vary depending upon the type of debt, the age of the debt, the identity and location of the debtor, Federal and State Law, peculiarities of the court system, and other factors but the fact remains that the collection of debt can be “found’ money and help immensely in providing additional and needed revenue to the provider  to help with the covering of operational expenses.

Drug Rehabs Regaining Business Focus to Survive a New Industry

There is nothing dirty, or unseemly or embarrassing about a company taking every step possible to recover money which it is owed. After, all don ‘t companies which the provider owes money to try to collect such funds? And, if you’re worried about upsetting the debtor then think about the fact that your employees expect to be paid every week and in my own humble opinion those individuals are a lot more significant than the person who owes your facility money.

Whether you are after co-pays, deductibles, self-pay fees still owed,  insurance checks which were sent to the patient, client loans, or other debt your company is entitled to take all lawful means to collect this money.  To do less is to put your company at further financial risk. You can contact Dale Redlich for a free consultation at 954-592-1921 on reclaiming lost revenue.

California Addiction Executive Conference Educating on Business

Addiction Conferences Main CaliforniaBHNR has brought 14 successful addiction conferences to South Florida. These talk show host/town hall-style conferences provided proven business and marketing strategies to operators during the regulation of our industry in Florida. We are proud to bring our Addiction EMP Series conference to Costa Mesa, California on 1/22/19.  Check out the addiction conferences EMP Series event in California.

 

 

Substance Abuse Billing #1 Costly Mistake

Substance Abuse Billing #1 Costly Mistake

The Critical Role of Substance Abuse Billing

Substance abuse billing is a complicated process and mistakes can be costly. Drug and alcohol addiction treatment centers are constantly battling insurance companies for reimbursements. Billing consultants and third-party billing companies can be beneficial to maximize results and get payments quickly. Health insurance claims for substance abuse are often delayed by the health insurance provider. Many behavioral health providers account receivables get out of control very quickly. It is a constant struggle for addiction treatment centers and detox facilities. If this isn’t difficult enough, some insurance companies send payment directly to the patient.

Behavioral Healthcare Billing; Is Getting Paid in 14-Days with Revenue Cycle Management Possible?

Getting paid in behavioral health care is a daunting task for many providers and billing companies. Billing companies usually take the low hanging fruit from common mistakes made by recovery centers in-house billing or the previous billing companies mistakes. After this, this real work of recapturing lost revenue or getting paid quickly is the difficult task.

Substance-abuse-billing-getting-paid-in-behavioral-healthcareNot having sufficient operating cash is a common problem for many rehabilitation centers. Some rely on billing companies and trust they are doing a good job. Some do their own in-house billing. Either way, an in-depth knowledge is an absolute must to get paid quickly. So, what are the common mistakes made by addiction treatment centers? We took this question to William McCormick, CEO of Americlaims Billing, a leading substance abuse billing company. Here is what he had to say.

Many billing companies are manually handling each part of the billing process. This is time-consuming and often times the process slows down payment to the provider.

Completely understanding the insurance companies and establishing relationships is the key to getting paid. Americalims Billing has developed a proprietary program that efficiently pays quicker than the industry standard manual processes. This automated system reduces many billing tasks and helps establish relationships with third-party billers. Many of their clients are getting paid in 14 days and enjoying a healthy revenue cycle enabling them to concentrate more on client care. This automated process has improved drug and alcohol addiction treatment centers cash flow position by reducing days in account receivable and improving profitability.

Addiction-Conferences-on-drug-rehab-marketing-by-behavioral-health-network-resourcesYou can learn more about increasing your cash flow, proven business, and marketing strategies at the California Addiction Conferences EMP Series event on 1/22/19. This addiction conference features 5 national thought leaders providing strategies in substance abuse billing, drug rehab SEO, website development, ethical business and marketing and tools to thrive with the new marketing laws.

Insurance Companies Are Bullying Behavioral Health Providers

Addiction treatment centers, opiate detox’s and third-party substance abuse billing companies work hard on efficient billing, billing procedures and utilization review. One mistake could cost upwards of $30,000. Obtaining the knowledge to prevent these costly mistakes is paramount. Behavioral health organizations can generate revenue in three different ways. They must play critical attention to their billing, collections, and drug rehab marketing strategies.

Insurance companies bullying substance abuse billing and providersInsurance companies are bullying substance abuse and mental health providers. They are denying substance abuse billing claims, delaying reimbursements, questioning the medical necessity and auditing these organizations. These tactics cause severe problems for providers. The insurance companies for the treatment of behavioral health care issues are using these strategies mainly due to the Affordable Care Act. It has made health insurance available to many by providing subsidies towards the cost of health care for many individuals. It requires insurance plans to cover pre-existing health conditions and much needed mental health and substance abuse treatment. However, the addiction treatment providers are battling high deductibles and insurance company tactics that reduce what they pay out in reimbursements.

The drug and alcohol addiction treatment providers are constantly fighting Goliath to get their substance abuse billing reimbursements for services provided. Insurance providers are constantly seeking ways to cut monies they have to pay out. The insurance companies are also battling fraudulent healthcare providers submitting inflated clinical documentation, services not provided and excessive services. This has caused severe problems for ethical operators. They have to be faster and stronger to keep up with the changes occurring in behavioral healthcare.

Substance Abuse Collections

Substance abuse billing and collections past dueSubstance abuse billing is the first step in recovery centers getting paid. Outstanding receivables are generally extremely high for addiction treatment centers and detox facilities. Many times their in-house billing or third-party billing providers don’t address receivables past 90 days very well. In some of these cases, they lack the knowledge and time resources to obtain these lost funds. Addiction treatment centers and detox providers should constantly be reevaluating their providers and seeking new providers to recoup these dollars. Reevaluating all their ancillary service providers is critical due to the current state of our industry.

We recently sat down with Dale Redlich, Co-founder of Pay 2 Patient LLC, to investigate other costly billing issues that centers face. We found that some substance abuse providers have millions of dollars in uncollected claims. This situation arises due to lack of knowledge of some insurance policies and proven strategies to obtain the insurance payment. This is what he had to say.

Treatment providers often start treating clients are unaware of how much the insurance companies will pay. Even with their experience sometimes the payment for services is sent from the insurance company directly to their client. Usually by the time the treatment providers realizes this, it is too late. They have no idea on how to effectively get this payment and generally never do.

Pitfalls When the Insurance Company Pays Your Client Directly

To begin with, Out of Network (OON) claims are usually more costly to the insurance carrier and to the patient. As a mechanism to encourage participation in its network (certain laws mandate this to happen) in network carriers will issue payment directly to the provider on behalf of the patient.  However, some carriers do not extend this outcome to non-participating or OON providers. Rather than pay the non-participating provider directly some carriers (Empire and Federal BCBS in Florida) issue payment directly to the patient.; the reimbursement check is made payable to the patient not to the service provider.  This can disrupt the provider’s cash flow and this creates the Pay 2 Patient circumstance. This usually occurs when the insured does not execute the assignment of benefits and attest to it.

Confused Behavioral Health Providers

Providers become understandably confused about how this could happen considering that the provider’s substance abuse billing staff and admission staff has had the patient execute all the correct authorizations and a verified assignment of benefit (AOB) at the time of admission.  Most providers think that if all such documentation is executed by the patient that regardless of whether they are in network or out of network the insurance reimbursement checks will be sent to their office. For many providers, the assignment from the patient is unlikely to be honored by the carrier and its check will be sent to the patient anyway. This comes as a surprise to many providers who expect to receive the check from the carrier so long as it has a valid attested assignment of benefits.

unknown billing receivables for substance abuse treatment providersIn many cases, both the patient and the provider’s staff are unaware that the insurance checks will be sent directly to the patient, even when the patient had already given the provider an assignment of benefits. And, even when the staff is informed mistakes and oversights are often made. Sometimes, it is only during routine claim A/R review that the billing staff realizes that the check they have been waiting for has already been sent to the patient.  The carrier generally does not routinely inform the providers billing staff of this circumstance

Addiction Treatment Centers Can Have Millions in Receivables and Not Know It

This is when the problem becomes acute and financially damages the providers anticipated cash flow because it is extremely difficult for the provider to recover such insurance payments from the patient who has already received the check, potentially has cashed it and possibly spent the money.  Obviously, the practice of issuing checks directly to patients instead of to the provider has greatly impacted the cash flow of many providers.  Providers in Florida should make sure that the insured also executes an AOB and attests to it

Florida’s controlling law in this area is Florida Statute 627.638 in which it states;

  • Section (1) that an insurance contract “may” allow the carrier to send payment directly to the provider of services if such directive is contained within the policy using appropriate language and there is an attested authorization of benefits from the insured.
  • Section (2) of this law it is clear that the duty to pay the provider exists when the insured and not just the patient has signed the AOB and attested to it

Benefits of Insurance Companies to Pay the Client Directly

shady insurance companies raking in profits from pay 2 patientProviders have to remember that issuing checks directly to the patient serves an important benefit for the insurance carrier because this entire process might become a pressure point for more providers to join the carriers’ network and eliminate the risk of not receiving the reimbursement checks. Paying patients directly provides an important impetus for nonparticipating OON providers to join the network.

It is important to note that some states like NJ, TX, CO, NV, and others have enacted laws which protect the provider whether such is in network or OON. A very few other States have also passed similar “mandatory assignment of benefits” laws which protect providers.  But, only a handful of States have passed such laws.  In such states, the law basically says that if an AOB is executed to their provider, subject to certain rules, the carrier must send payment to the provider not the patient.

Properly Handling Empire and Federal BCBS Insurance Policies

And, if a provider provides services in Florida, if a patient is admitted on an OON basis and the client has certain insurance such as Empire or BCBS Federal and the insured does not sign the AOB (assignment of benefits) there is a distinct possibility that when it comes time for payment of the providers fees the check from these carriers might go directly to the patient.

Of course, many providers in this circumstance do try to be prudent and educate them by informing them that the insured needs to sign the AOB. However, if the insurance check is sent directly to the patient their obligation is to immediately endorse the check to their provider in payment of the fees for service.  But, many clients who receive the insurance check after they are no longer in treatment keep the check and, cash it.  Some clients go to multiple treatment centers to try to play this game to the fullest extent.  This is the dangerous result of pay 2 patient.

Remember that in states like Florida when the provider has an assignment of benefits document in the file signed only by the patient there is no actual legal protection against the carrier paying the patient directly. Finally, when and if a third party reimbursement check is sent by the carrier directly to the patient most providers and billing companies lack the resources, time or expertise to “chase” the patient for a return of the insurance check.

Substance Abuse Billing #1 Costly Mistake Chasing the Reimbursement Check

chasing insurance company checks sent directly to addiction treatment clientsThere are many areas of substance abuse billing that behavioral health organizations overlook. Getting paid quickly is paramount for many providers. This is one of the main reasons we are seeing recovery centers close their doors. Re-evaluating your current sales and service providers including your substance abuse billing company or carefully looking at your in-house billing could be the difference of keeping the doors open. Behavioral healthcare billing is a complicated process that demands great attention. Many drug rehabilitation centers think that this is under control and unknowingly have left huge chunks of operating cash on the table.