Substance abuse treatment centers face many challenges from the location of the treatment center to medical billing errors. Here are 5 major areas impacting substance abuse treatment centers’ bottom line and how decision-makers can improve their facility.
1. Location of treatment center
The location of your substance abuse treatment center can impact your bottom line drastically. Building or renting a facility within a major metropolitan area will be significantly more expensive than doing so in a rural area. But wherever you open, you must ensure the demand is there and conduct a market analysis across several areas before you commit to one city.
When choosing the location of your facility, there are a wide range of additional factors to consider. Are you an outpatient facility? If so you will meet to consider whether the outpatient facility density in a metropolitan area will make it difficult to stand out or vet clientele to fill up your program. If you are an inpatient facility, the rural areas can be more appealing as clients can get away from the city and focus on the healing process in an area that doesn’t have potential distractions.
There are other factors that come into selecting a major metropolitan area versus a rural area. Depending on the location of the facility, a rural area can make some potential clients feel safer, but it’s all dependent upon the environment they are in and what their needs are.
Metropolitan areas require a different type of marketing than rural areas. Always assess the pros and cons when selecting the location of your facility. It matters to your employees, to your clients, and to your bottom line dependent upon your individual program needs.
2. Quality of staff
The success of your program is dependent on the quality of the staff you maintain. Staff salaries can range anywhere from $25,000 to $250,000 depending on the location and size of the facility, as well as the quality of the candidate.
Your staffing unit will include:
- Clinical Director
- Billing Manager
- Verification of Benefits Specialist
- Administrative Staff
- Janitorial Staff
- Case Workers
3. Marketing budget
Your program can’t succeed if no one knows about it! Marketing is often left on the back burner, when in reality it should be a priority from day one.
Your marketing budget will need to cover:
- Logo design
- Website (and maintaining that website)
- Print materials like brochures or flyers
- Advertising
- Search engine optimization
- Business cards
- Branded items like water bottles, tote bags, or pens
4. Setting up a network of payers
Payers have a list of healthcare providers they contract with, like a behavioral health treatment facility. The list of providers makes up a medical provider network. Providers included in the network are “in-network” and ones that are not included in the list are “out-of-network”. To streamline medical costs, it’s important to have a balanced payor mix between in-network and out-of-network insurance payments.
Among the many benefits of being an in-network provider is that you have an agreed-upon rate that is negotiated with the payer for each level of care/services provided. When authorized and deemed medically necessary the ability to predict your payment from said insurance provider is fairly easy to gauge.
Being in-network also assists your clients in reducing costs through their insurance provider for their deductible and Out-of-Pocket (OOP) maximum. That being said, it’s important to have diversification in the types of insurance you take.
This is the most applicable when bringing in out-of-network clients. One hurdle can be that the client has no out-of-network benefits. Single case agreements can be an option albeit not always successful. There is set criteria that you must qualify for, and no in-network facilities within a certain radius of the client’s residence can have availability. If the client does in fact have out-of-network benefits, then the possibility for high reimbursement rates is possible because there is no contracted rate with the payer (Insurance Provider).
The downside is the deductible and OOP cost to the client can be substantially higher. When working with out-of-network payers it’s important to not have even half of your clients with one particular insurance company as their provider. Should the insurance provider change their rate allowance or code acceptance/criteria, it will have a much more significant negative impact if you are overloaded with that particular payer.
Knowing which insurance providers provide higher reimbursement levels is important to market to. When possible, with out-of-network providers you want to have no more than 25-35% of your clientele with one payer. This is not always possible, but marketing with the desire to do so can be highly advantageous for cash flow, which can provide more opportunities to help others who struggle with mental health and substance abuse issues.
Administrators should aim to strike the right balance between participating in some insurance networks and avoiding others, but it can be tricky. Work with a trusted partner to create a strong network of payers that benefits you and your patients.
5. Undercharging patients & Medical bill errors
Studies show that roughly 80% of medical bills have errors, with a quarter of those mistakes caused by typos. But it’s not just typos, 44% of medical billing errors are related to the quality and accuracy of clinical documentation. Clinicians need to prioritize documentation just as much as patient care.
Not charging the correct amount for services is an obvious administrative cost-suck, but it can easily happen. It’s crucial to always double, or even triple-check your clinical documentation to ensure that you’re charging patients correctly.
Streamlining your medical billing processes requires extensive organization and a high attention to detail. Even the smallest mistake can impact your bottom line. To learn more about how Mosaic Medical Billing can optimize your medical billing processes and help drive revenue, get in touch with our team.
