What Behavioral Health Facilities Need to Know About Health Insurance

Despite a strong push to make behavioral healthcare more accessible, insurance companies are fighting back, finding loopholes in coverage laws and strategic tactics to ensure behavioral health facilities aren’t getting the reimbursement they need.

When facilities are out-of-network and don’t know what their reimbursement rates are and patients aren’t always able to pay their entire portion, facilities can end up treating a patient at a loss. As a result, some behavioral health facilities are shutting down and patients are losing out on treatments that could potentially save their lives.

Aside from a total reform of the behavioral healthcare industry, there is one solution that is fully attainable to facilities: leveraging technology and aggregated data.

In this article, we’ll discuss at length how to use data to avoid financial trouble. First, though, it’s important to know how insurance works with facilities.

How Does Insurance Work for Behavioral Health Services?

Thanks to the Mental Health Parity and Addiction Equity Act of 2008, health insurance providers can no longer impose less favorable benefit limitations on mental health or substance abuse than on medical and surgical benefits — they are required by law to cover both behavioral treatments and physical ones the same way, with parallel costs and coverage limitations.

In another push to mitigate extensive healthcare costs, the Affordable Care Act, enacted in 2010, mandated commercial health insurance to offer mental health benefits. Any insurance plan that offers mental health services must cover:

• Mental and behavioral health inpatient services
• Substance abuse treatment
• Behavioral health treatment

The limitations and amounts vary according to a patient’s insurance policy – it’s important to understand those constraints before offering your services to a patient who might not be able to pay the remaining costs.

How is Insurance Different for Behavioral Health Services?

Light Insurance Coverage in the Behavioral Health Sector

Insurance works differently for certain behavioral health services than it does for physical ailments. Coverage tends to be lighter for behavioral health treatments, and most plans are less likely to cover more specialized services.

A 2015 study showed that behavioral health was four to six times more likely to be out-of-network than with surgical or other types of medical care. Unfortunately, most insurers don’t broadcast their contracts with providers or even contract with behavioral health facilities at all, leaving facilities in the dark about their compensation.

By the time a center learns that insurance won’t cover the fees and the patient can’t afford to, the facility is left to take the loss for treating them. We’ve seen these repercussions worsen over the years, as behavioral health facilities continue to shut down when they can’t collect payments and financial troubles inevitably force them out of business.

How Facilities Can Use Data to Avoid Financial Trouble

There is one effective solution to ensuring facilities get all of the compensation they’re due: aggregated data.

Zealie’s behavioral health billing solutions offer advanced technology designed specifically for behavioral health treatment facilities. Our behavioral health tech aggregates up-to-date historical data across all insurance payers and treatment providers and tracks the average reimbursement rates from each payer for all the different types of services provided.

With this type of visibility, facilities can know how much they’ll be reimbursed by insurers before they admit a patient — this also provides a great opportunity to raise a red flag to patients who can’t afford to pay out-of-pocket and recommend they look for an alternative.

Through the use of aggregated data, facilities can benefit by:

• Knowing ahead of time how much they will be reimbursed by an insurance provider
• Directing their marketing efforts towards insurance policies they know will adequately reimburse them
• Giving them the knowledge and leverage they need when negotiating in-network contracts
• Make better business decisions overall 

By offering full transparency from the start of the transaction, both patients and facilities can make well-informed decisions that won’t cause a financial setback or prevent proper treatment.

Request a demo to learn how to increase your profits and grow your business by using Zealie’s billing services.