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  • Writer's pictureMuhammad Sair Khan

PAYOR REIMBURSEMENT TRENDS - IN VS OUT OF NETWORK



Reimbursement rates for behavioral health services have changed dramatically in the last few years. It is reported that rates for out-of-network providers have dropped up to 50 percent since 2016.


Due to the opioid crisis and increasing population in need of mental health treatment, insurance companies are required to spend more money than ever before. To regulate their costs, they are prioritizing audits, recouping payments and sometimes withholding funds.


In the past, many treatment facilities remained out-of-network to avoid payor contracts that resulted in low reimbursement rates. But since behavioral health reimbursement rates have fallen across the board, even for out-of-network providers, many facilities are choosing to go in-network.

Reimbursement Trends - Audits


Trends show that audits for both in and out-of-network providers are up. Behavioral health is a soft target due to diversity in treatment models and payer standards, subjectivity of medical necessity and staff resistance to documentation. Although guidelines do exist, they are less objective than most medical procedures.


Whether or not you choose to go in network, it is important to ensure compliance with licensing and accrediting bodies. Some of the most common include:

  • Payor Guidelines

  • ASAM (American Society of Addiction Medicine)

  • AMA (American Medical Association)

  • SAMHSA (Substance Abuse and Mental Health Services Administration)


Before you choose whether or not to go in-network contract, there are many things to consider.


It may not be the right choice for every facility with every payor, but learning about payor contracts will help you decide the choice for your treatment center and your bottom line.

In-Network


Though reimbursement may be lower, going in-network can have other benefits that increase your revenue.

Increased Number of Patients


Patients are more likely to use in-network services because it costs them less money - they will only be financially responsible for their deductible and co-pay. Primary care physicians are also more likely to refer their patients to an in-network provider for specialty services. Being in-network could give you access to a wider pool of patients so even if you get paid less per service, the increased number of patients who use your services could lead to higher revenue.

Flexible, Negotiable Contracts


When you apply to become an in-network provider, you have the power to negotiate your rates and what services are covered. With proper insight to your practice or facility’s financials, you can negotiate a contract that will strategically improve your bottom line. For example, if you are looking to increase the volume of your outpatient program, you should consider going in-network for that service with major payors in your area. An increase in referrals from in-network payors and providers, and a thoughtfully negotiated in-network rate should help you increase your profit margin.

More Predictable Reimbursement


Your payor contract will outline which services are covered, the codes you should bill, reimbursement policies, and other information which makes it quicker and easier for you to receive payment. Going in-network will simplify your claims process - reducing the risk of claim denials due to coding updates. Many facilities enjoy dependable and consistent reimbursement, even if rates are lower.

Considerations


Even with the benefits listed above, lower reimbursement rates or a poor payor contract can make going in-network a less favorable decision.

Too Few Patients to Justify Lower Rates


If a particular insurance company isn’t popular in your area or among your current patient population, you aren’t likely to see a new rush of patients by going in-network with that payor. You should understand how much impact each payor has on your current revenue.

Datapro offers these analytics. Click here to learn more.

Increase in Expenses Impact Profit

I

f the volume of patients you see increases dramatically, so can your operating costs. More patients means more expenses but that does not always equal more profit. Before entering into a payor contract, you should make sure that the additional expenses will be covered by your new rates.

Payor Audits


As an in-network provider, you are more likely subject to payor audits. Payor audits can add to your staff’s workload. These audits are not necessarily to scrutinize your practice/facility, but rather to gather data for payor initiatives such as value-based care. These types of things can be negotiated before you sign your contract.


Having a deep understanding of your facility’s primary costs, revenue streams and overall financial situation is the key to a thriving practice and a well negotiated payor contract. If you are still unsure if going in-network is right for your facility, Datapro’s experienced team can help you make the right decision for your practice.Click here to schedule a consultation.

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