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  • Writer's pictureMuhammad Sair Khan

Why So Many Treatment Centers Are Failing




Within the last year, dozens of addiction treatment centers have gone out of business, even though the demand for treatment continues to rise. Increasing regulations and decreasing reimbursements are making it harder for centers to succeed financially. By falling short of earning a profit, many centers are operating at a deficit.

If your treatment center is experiencing financial hardship, here are some factors to take into consideration:

Reimbursement Has Changed


Insurance policies, particularly among private payors, don’t pay how they used to. This can negatively affect your financial planning, leaving you with less revenue than you had anticipated. In order to accurately determine your facility's expected revenue, contact your biller. They will be able to provide you with historical data that will improve your estimates of each policy’s payout.

The Marketing Is More Challenging


Increased certification requirements for Google and Facebook Ads can make advertising your center on those platforms not only time-consuming, but expensive. Pay attention to your return-on-investment (ROI) with any advertising you invest in by asking yourself these questions:

  • How many patients did you actually receive as a result of Google Ads?

  • How much did each of those patients generate in revenue for your center?

  • Did you earn back your initial marketing investment?


Focus on marketing techniques that are proven to have a better ROI for your specific type of center, whether that is an advertisement in a local newspaper or time spent building relationships with referring providers. Don’t cut out marketing spending entirely—it can be crucial in obtaining new patients and will continue to better your community.

Pay Attention to Open Claims


You need a plan to follow-up on open, unpaid, or denied claims. If a large percentage of your claims are in the 'over 60-day' category, you are missing out on a substantial amount of revenue that is rightfully yours. If you don't already have a system in place, it is imperative to set-up a system to appeal or reprocess claims more quickly and efficiently.



You should also focus on ensuring your clinical team charts in a way that allows you to get the maximum number of days authorized and does everything necessary to avoid denied claims. Taking the time to train your staff on proper coding and charting can save your billing team a lot of time—and speed up your claims processing.

Connect With Your Community


Having a presence within your community can help you spread the word about your services and boost your reputation. You should be connecting with referring healthcare providers, community leaders, and other addiction treatment advocates in your area. These connections will be invaluable to your business and to those you are connecting with.



You should also have an open line of communication with your payors. You need to be able to prove to them that you provide quality services through patient outcomes and other data. Demonstrating your center's quality of care may help you improve your reimbursement rates.


The experts at Datapro billing can help you with all of the aspects of your revenue cycle listed above: from training your staff to persistently following up on unpaid claims. Our team has decades of experience in the addiction treatment industry and would love to help you understand trends in payment and reimbursement.


If you'd like to learn more, please schedule a complimentary 15-minute consultation with Datapro experts by calling:


805-579-3537 or contacting us online.

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