Revenue Cycle Management for Rehabs

Ensuring Consistent Revenues and Reimbursements

As a healthcare business, it is crucial to ensure prompt payment for your services. However, in the realm of behavioral health, navigating the payment process can be more challenging.

In this context, healthcare providers are not directly paid by the individuals benefiting from the services. Instead, they must keep track of costs for third-party payers and substantiate these expenses.

When faced with an ineffective revenue cycle, financial struggles can ensue. Receiving payments that fall short of covering expenses or experiencing delays can significantly impact the bottom line.

Keep reading to better understand how revenue cycle management for rehabs plays a crucial role in their success, and how Ads Up Marketing can help you guide and enhance your existing systems to maximize profit and consistent income flow.

What are the Primary Reasons for Lost Rehab Revenues?

Client brokering has emerged as a significant concern, particularly in California’s drug rehab industry, prompting the implementation of new laws to address this issue. Client brokering involves the unethical practice of recovery advocates or intermediaries finding individuals seeking treatment and selling them, along with their insurance coverage, to treatment centers willing to offer the highest compensation on the side. These cause significant damage to the revenue cycle management process, leading to substantial losses.

Some of these centers argue that they wouldn’t receive clients otherwise, leading them to establish a fixed monthly payment to these brokers, regardless of the actual number of clients referred. While this approach may attempt to avoid the controversial pay-per-patient model, it gives rise to a new set of challenges.

A Rise in Ethical Accountability for Addiction Treatment Providers

One consequence is that individuals struggling with addiction may perceive their insurance cards as a means to demand material goods or special treatment in exchange for staying in treatment. If the treatment center fails to meet their expectations, these patients easily switch to another facility that is more accommodating.

The Bradford Bill was introduced to this as a deterrent for those agencies conducting these illegal practices. Potential jail time and stiff penalties are attached to these laws. Additionally, the bill aims to enable out-of-network providers to directly collect payment from insurance companies. However, as highlighted earlier, this approach also brings its own set of challenges and potential problems.

Additional Pitfalls for Addiction Treatment Centers

The drug and alcohol addiction treatment industry is thriving, generating approximately $35 billion annually. A huge part of revenue cycle management means getting a grip on your advertising costs. Drug and alcohol addiction treatment centers often have some of the most sizeable budgets in terms of online advertising.

The following list acts as a reminder for alcohol addiction treatment centers when it’s time to review their budgets.

Search Engine Optimization

Implementing search engine optimization techniques to improve online visibility and organic rankings in search engine results is a large portion of where any behavioral health treatment or substance abuse treatment centers obtain their revenue.

Although this is typically done through written content, most substance abuse treatment centers don’t handle it in-house.

PPC or Search Advertising

Running targeted paid advertisements on Google and utilizing pay-per-click campaigns to drive traffic to their websites. PPC drug rehab marketing forms a pivotal resource for many facility owners, though the cost can be substantial.

Social Networking and Advertising for Substance Abuse Treatment

This could go along with PPC advertising since, technically, Facebook and the likes are PPC. However, completely separate costs go with substance abuse treatment centers and their social media management.

While some major substance abuse treatment centers reserve significant budgets of around $500,000 per month for marketing and advertising, smaller to medium-sized treatment centers often face budget constraints that limit their ability to compete in areas that can get extremely costly. And remember – this is just the advertising phase – we haven’t gotten into insurance claims, unpaid claims, or the medical billing process in general. So what’s the solution when such a significant amount is needed for ad spend?

With smaller marketing budgets, these centers typically have two alternatives: focusing on a more hands-on outreach and networking approach or investing in drug rehab SEO. Regardless of the chosen path, acquiring new clients can be a costly endeavor, with estimates suggesting that treatment centers spend between $3,000 and $8,000 to secure a single client.

Making Your Marketing Budget a Buffer for Consistency

At Ads Up Marketing, one of our specialties is substance abuse and mental health SEO. We have a significant amount of experience in both fields and can not only keep your budget within the perfect range but drive more significant results.

In addition to marketing efforts, to remain profitable drug rehab owners must prioritize their medical billing revenue cycle management in regard to medical billing and submitting claims. At the end of the day, patient payments are what keep the doors open.

This aspect holds crucial importance for any rehabilitation center as they require sufficient operating cash to sustain their operations and continue providing assistance to individuals battling addiction.

Without proper attention to medical billing and revenue cycle management for rehabs, not only does your service falter – but you run the risk of having your doors closed completely.

Revenue Cycle: Denial Management Matters

Neglecting revenue cycle denial management can have severe consequences. Once a client is admitted through outreach efforts, it is vital to address certain key questions:

• Does your facility accept the client’s health insurance?
• At what rate will the health insurance reimburse the individual’s services?
• When can you expect reimbursement from health insurance?

These fundamental business and financial considerations should not be left to guesswork. Insufficient operating capital remains one of the primary reasons for the failure of substance abuse rehabilitation centers.

Thus, it is crucial for drug rehab owners to prioritize effective revenue cycle management to ensure financial stability and continuity in their mission to help individuals on their path to recovery.

To enhance the revenue cycle for behavioral health services, there are several steps you can take. Use the next section as a guideline to provide a boost to your substance abuse treatment center by taking on the revenue cycle in a proactive way.

Taking On Revenue Cycle Management for Rehabs

Establish Concrete Policies Toward Revenue Cycle Management

Creating clear payment policies helps outline expectations, such as payment timelines for self-pay patients, accepted payment methods, consequences of nonpayment, and procedures for handling no-shows. This fosters transparency for both clients and internal team members.

By having a set of clear-cut parameters for every potential situation, predicting your revenue cycle also becomes easier when you attempt to create projections. Use the following strategies to avoid pitfalls.

Verify Client Benefits

Before providing care, check the eligibility and insurance coverage of the client receiving services. This ensures that everyone understands the out-of-pocket costs and helps minimize non-payment situations. During admissions, collect necessary information, including insurance cards, credit cards, or other payment method details.

Confirm Charges Made

Once benefits are confirmed, and care is delivered, providers should record clinical service charges in a database. Understanding factors contributing to claim denials can help optimize the charge capture process.

Medical Billing

Simultaneously with charge capture, providers should associate charges with relevant ICD codes. This step is prone to issues leading to claim rejections as billing codes and regulations continually evolve. Even the smallest mistakes or typos can lead to payment rejection.

Submitting Claims

Submit claims to insurers after conducting internal reviews to minimize the likelihood of denial. Employing software solutions, such as electronic health records (EHRs), can streamline the process by identifying missing or incorrect information.

Claims Review Process

Insurers review submitted claims to determine coverage and medical necessity. They provide Remittance Advice, which explains reasons for claim denials or approvals and outlines the reimbursement details.

Collection and Collection Services

After claim approval, providers bill the individuals served. While reimbursement constitutes a significant portion of revenue, private-pay individuals also contribute. With the Affordable Care Act, private insurance now covers many behavioral health services, necessitating direct payments to individuals and adding an extra collection step for treatment centers.

Use Reporting Software

Keep a close eye on claims results using EHR or claims processing software. Ensure that all approved payments are received promptly and swiftly address and resubmit denied claims.

Managing Denials

Behavioral health reimbursement often involves multiple claim denials, making it important to effectively appeal these decisions. When drafting an appeal letter to insurance companies, include updated and accurate information, explain why the assessment is incorrect, and provide additional treatment details to justify its necessity. Ensuring you’ve submitted all prior authorization forms in the earlier stages can help when you get to this step.

What are the Pros and Cons of Billing In-House?

When considering billing options, there are pros and cons to both outsourcing and in-house billing:

Outsourcing to third-party providers experienced in behavioral health revenue cycle management (RCM) offers several advantages. These specialists can help increase reimbursements and free up your time to focus on client care. However, it is essential to work with experts that are well-versed in the intricacies of revenue cycle management.

Reach Out Today to Increase Revenues with Our Support

At Ads Up Marketing, we’re experts in assisting clients with the revenue management process. We can help with software implementation, as well as with connecting your marketing efforts to your revenue needs, helping to ensure a steady flow of income along with proven results in attracting new clients.

For a complimentary consultation, make the call or drop us a line today, and let’s get started!