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SUD Billing: The art of aligning with your State Regulations & Insurance/Payer Criteria

It is written somewhere that you CAN NOT serve two masters. Well, nowhere is that less true than in the Substance Use Disorder (SUD) industry. In fact, if you are not willing to serve at least two masters, you may not have a center to serve anyone.

Today’s SUD centers are faced daily with the challenge of compliance. But compliance to who and what is often a dilemma for these centers and their leaders, staff and stakeholders. I think it’s fair to say that for any treatment center to get a license to operate they must be compliant and meet all the particular state’s regulations. Many of us have probably endured and passed a state inspection or several. We have implemented procedures, processes and personnel to manage the center’s compliance to those state regulations. However, in today’s treatment landscape, if you plan on operating a center that accepts insurance you must be prepared to serve two masters.

Many years ago, I proudly held the “Corporate Compliance” position for a 150-bed facility. I dutifully memorized Florida state regulations, 65D-30.  In the regs, the state focuses much on the safety of the clients. So I faithfully held random fire drills every quarter and I instructed the staff to Stop, Drop and Roll. I organized and scheduled the required CPR and First Aid training. I made certain that the client handbook was provided to each client and that the appropriate helpline and report abuse numbers were posted.  And, yes, I made certain that the temperature in the walk-in fridge was logged daily. (mustn’t be over 32 degrees). Those were the days; the clients saw their counselors and the notes were entered sometime soon. The clients saw a psychiatrist as needed only and physicians were available for medically compromised clients. An individual note consisted of a paragraph or two… “less is more”, I heard many Clinical Directors say.  The instructions were clear, right there in 65D-30. I could call the Department of Children and Families (DCF) office and ask questions, get a copy of the regs, photocopy more if needed. It was simple:  Follow the regs, pass the inspection, get the license, help the clients.

Enter Parity. Enter Payers. Enter Profit. Enter Master #2.

Jumping for joy at the victory, we would actually be able to accept insurance for treating the clients. This is a win-win for the industry for sure.  We sure found out fast that now along with meeting our state regulations, if we wanted to bill the client’s insurance, we must meet the payer’s regulations. Scratching our heads, we searched and searched for the insurance guidelines. This was some time ago and the internet was not as populous with information as it is today.  It was quite difficult to obtain the payer criteria then, I mean now. I mean both then and now.  Twenty years later and it is still quite difficult to find up to date criteria. Why? Because we as many other centers provided services as an out-of-network (OON) provide, or in other words, a provider that the payer doesn’t want to pay (PPP) – (to the best of my knowledge, there is no designation of PPP, I made it up)

Let’s just say, we did find the insurance criteria. It’s perfect, found them!  If you haven’t noticed, please notice now. The state regs say one thing- the insurance criteria another. Even though many of the insurances insist their criteria are based upon the American Society of Addiction Medicine or (ASAM)- it always seems like perhaps they have an exclusive version of the ASAM that we were never allowed to see or maybe just that no one else knows about?  And I promise without question, it is always more stringent than the state’s regs.  What to do now? Comply, COMPLY immediately!

You must comply with both your state regs and the insurance criteria- yes, serve them both – serve two masters.  Examine the insurance criteria and provided it is the stronger, make sure your organization, ESPECIALLY your charts, comply.  If you want to bill the client’s insurance for your services then introduce, implement and coach your staff on insurance criteria while delicately balancing it with the state regs.

I suggest hiring a third-party expert in insurance criteria AND following what he or she says to do. There is no margin for error here. A third-party revenue cycle management company (RCM) should be able to coach and train clinicians. I have insurance criteria conversations with our customers, CEOs, Clinical Directors daily.  Or perhaps hire an independent consultant to audit your chart compliance.  It is absolutely critical that the charts are up to snuff, ready at any moment to withstand the scrutiny of an insurance reviewer. This reviewer or auditor has been hired to find something in the chart that will discredit the necessity of the service so the insurance company will not have to pay you OR they can recoup any monies that have been paid to your center.  Finally, invest in a staff person to oversee and monitor charts and insurance criteria. Chart audits and prepayment reviews can happen at any time and for any reason or no reason at all. Be prepared.

Insurance criteria and compliance has never been more important than it is now. Audits and prepayment reviews are prevalent and costing centers and facilities millions of dollars in recoupments. Centers are closing – not because they were not clinically sound, but because audits from the insurance payers revealed that all the hard work they were doing wasn’t being noted in the charts and poof, in a split second, the insurance company recouped every dime previously paid and sadly the center could not sustain that type of financial burden. Lost beds equal lost lives.

In order to continue serving clients and utilizing insurance benefits for their treatment, you MUST be willing to serve two masters.  And coincidentally, it will soon be three, as within the next two years it is very likely that accreditation will become mandatory and you will be serving Joint Commission, CARF or COA regulations as well. Enter Master #3.

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