- 1 The Critical Role of Substance Abuse Billing
- 1.1 Insurance Companies Are Bullying Behavioral Health Providers
- 1.2 Substance Abuse Collections
- 1.3 Pitfalls When the Insurance Company Pays Your Client Directly
- 1.4 Confused Behavioral Health Providers
- 1.5 Addiction Treatment Centers Can Have Millions in Receivables and Not Know It
- 1.6 Benefits of Insurance Companies to Pay the Client Directly
- 1.7 Properly Handling Empire and Federal BCBS Insurance Policies
- 1.8 Substance Abuse Billing #1 Costly Mistake Chasing the Reimbursement Check
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 accounts 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.
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 are bullying substance abuse and mental health providers. They are denying substance abuse billing claims, delaying reimbursements, questioning 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 preexisting 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 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, and one of 5 featured panelists (2 covering billing and utilization review) at BHNR’s upcoming Addiction Executive conference to investigate 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.
You can contact Mr. Redlich at 954-592-1921, or meet him in person with our 5 other Addiction Executive Thought Leader panelists at the Addiction Executive Thought Leader conference in Riviera Beach, FL on 6/27/18. Mr. Redlich will be addressing this situation head on at the conference.
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 providers 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.
In 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 in 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
Providers 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 non participating 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.
Substance Abuse Billing #1 Costly Mistake Chasing the Reimbursement Check
There are many areas of substance abuse billing that behavioral health organizations overlook. Of course , many providers in this circumstance do try to be prudent and educate the out of network patient 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 return of the insurance check. And, that is where “Pay 2 Patient, LLC “comes in. We do chase down such checks and we are very efficient at doing so. If you have any questions or concerns about a particular case simply call us as soon as possible.