Q&A: Getting paid in behavioral healthcare | Behavioral Healthcare Executive Skip to content Skip to navigation

Q&A: Getting paid in behavioral healthcare

April 10, 2014
by Shannon Brys, Associate Editor
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William McCormick

Parity, ICD-10 and the Affordable Care Act are hot topics that involve major changes—changes that challenge behavioral healthcare executives who must deal with the details. Among all these, getting paid continues to be a top attention-getter.

In an exclusive interview, Behavioral Healthcare talked to William McCormick, CEO of Sunrise, Fla.-based Medivance Billing Service, Inc., a company that specializes in revenue cycle management for behavioral healthcare facilities, medical practices and hospital groups, to better understand some of the biggest concerns and opportunities around billing and reimbursement.


What reimbursement and payment issues are you currently watching?

The first thing we really want to talk about is the impact of the Affordable Care Act and how it reaches the common people. There are two parts of the payment – a payment that the patient needs to pay and a payment that the carrier needs to pay the provider.

So far, there’s proof that some of the plans are cheaper for monthly premiums, however, the direct cost of care has increased to the patient. Co-pays, deductibles and co-insurance for individuals are increasing, which will in turn impact patients’ ability to get care.

The second thing is that providers are providing a service for which insurance companies are reducing what they pay them. The major issue here is, ‘What methodology is being used to determine what a doctor/provider/therapist deserves to get paid?’  It shouldn’t be a different equation in different states.

I think our system needs to build a definitive methodology on how to determine how a provider gets paid for what he or she does. Just like a lawyer—a lawyer charges you a retainer fee based on the hourly rate they feel is appropriate or something similar. We need the same thing in this arena because a lot of facilities are being hurt due to the level of reimbursement.

What role does parity play in this equation?

Parity should serve as the gatekeeper for fair treatment. Parity provides equal opportunity of care for those with mental and behavioral problems. That should be the sole purpose of why we use it. Therefore, if Bill has an existing condition of alcoholism, then parity protects him from being denied treatment. The mental health parity is our equalizer of opportunity for access to care.

But parity goes further than that, right?

Right. Parity explains the total amount of expenditure and also addresses the aggregate lifetime benefits. It makes a guarantee that the financial requirements on patients are not exorbitant, that there are caps and such. It releases the patient from having to wonder if they have to do something different than someone without a mental health issue.

If you’re someone with diabetes, they’ll tell you, ‘You’re Type 2 and you have to take insulin probably until the day you die.’ There’s no cap on how much insulin you can get. There shouldn’t be caps on the [mental health] visit.

On the topic of billing and reimbursement, what issues should providers be thinking about?

First due to a shortage of behavioral healthcare providers, they’re going to have an increased patient load. They need to prepare for that.

Second, they need to ensure that operations are running on as fine of a line as possiblem, they get paid for everything that they do and that they are being paid fairly according to the benefits identified by these plans. These plans are making denials on claims just because they know the doctor won’t challenge the denial. They need to understand that.

Third, they have to become their own advocate. They have to be outspoken and stand up for the provisions they are protected by. They can’t sit behind the medical desk and assume that healthcare reform is going to protect all aspects of what they do and not say anything or participate in anything.

Lastly, providers should think about how they can participate in setting up national standards of compliance and protocols for care. They are the experts. Why should someone else be making up the protocols for them?

What sort of issues do you think insurers are concerned with?

Their biggest concern should be protecting themselves against fraud and abuse and overutilization. In order to protect the integrity of the industry they need to protect the integrity of what they’re paying.

When someone pays a premium, that premium provides the individual a level of care. And that premium pays that provider for care. So the only thing the insurer could be concerned about is making sure the care is necessary, needed, and not excessive. Unless it’s not medically justifiable, there should be no problem.

What can you tell us about capitation?

Capitation wasn’t designed to control costs, it was designed to put the doctor at risk. The doctor has a greater risk now. So, they’re not controlling healthcare costs, they are managing their profit risks.

If you want to offer cost savings across the board, then everyone must participate including the managed care companies. So we make them nonprofit organizations and we cap what they can control for expenses and salaries. Then we will reduce costs there as well.

If a provider went to a capitated system, would they be able to manage more reimbursement issues on their own? Would that change the need for services such as yours?