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July/August 2008 |
Making Insurance Relationships Work
A California center finds it can maintain
the integrity of its mission under changing payment realities |
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by Mark Willison |
 My reflections in this article are not meant to criticize
or pass judgment on any insurance company or health maintenance
organization (HMO). They merely offer my perspective on the current
insurance issues within the addiction treatment field and how we at
Beacon House in California have managed to maneuver through the maze of
changing policies and procedures presented to us by third-party
payers—and why we continue to do so.
Simply put, we work through the maze of managed care by offering a
number of different programs that our community needs and that insurance
companies are willing to cover. In doing so, we purposefully opened the
door for cooperation.
In today's world of addiction treatment, insurance companies have varied
limits on what type of treatment will be covered within each client's
plan. Typically, clients will see higher copayments for treatment of
substance use disorders than for other types of medical care, such as
the care one would receive for a broken bone. Often there will be a
limit on how many times a person can be treated for addiction-related
issues, which would not be the case for other medical ailments. An
insurance company's managed care division or a subsidiary controls this
authorization process and the delivery of health services to its
members.
Considering all of these stipulations, the onus falls on treatment
centers to “manage” an insured client's care. At times, depending on
one's coverage, admittance to treatment requires only a phone call
verifying coverage. Yet more often than not, as part of the initial
authorization process, a patient's illness must first meet the test of
an insurance company's medical necessity criteria. These criteria often
are based on the severity of the disease (i.e., the amount of substance
use, length of time using, the individual's current mental and emotional
state, psychosocial influences, and family support).
Follow-up authorizations are frequently required in defense of continued
treatment for the patient. Quite often these authorizations reach the
level of a “doc-to-doc” review, involving physicians who represent the
insurance company and those representing the treatment center.
To complicate matters, this practice varies from insurance company to
insurance company, policy to policy, patient to patient, and case
manager to case manager. Over the years, many treatment centers have
found this situation too time-consuming, tedious, and costly to endure.
Rather than abide by managed care's requirements, many centers have
chosen not to accept insurance at all, leaving clients with no choice
but to pay out of pocket for services. To their credit, many of these
treatment centers have succeeded in developing business plans that help
people in the recovery process and help the organization maintain a
healthy bottom line.
Yet with the cost of a customary residential treatment program today
ranging anywhere from $6,000 to $50,000 or more, paying cash is out of
the question for many, including those who have been paying high
insurance premiums and have naïvely expected coverage to be there when
they need it.
History
 Our story at Beacon House is different. To understand, we have to go
back more than 50 years to the organization's origins.
At its inception in 1957, Beacon House was a traditional social model
program offering residential treatment only. If an adult was interested
in getting sober, he/she could show up at the front door and ask if a
bed was available. Fees were based on one's ability to pay, and in
exchange for the stay the “guest” would be asked to help maintain the
home and gardens. (At a recent Beacon House reunion, a 1959 graduate
reported paying $5 a day for a 30-day stay.) Virtually all residents
were male, and only a few stayed 30 days or more.
In the late 1960s, Beacon House began offering a more formalized program
that included both individual and group counseling, often facilitated by
professional counselors. These changes were to some degree a response to
Beacon House seeking and receiving licensure from the California
Department of Alcohol and Drug Programs. More women were being treated
too, yet the treatment philosophy remained a social model into the early
1990s, albeit with more professionalized programs and staff and, as the
need presented itself, higher fees.
Until the mid-1980s, insurance companies were reimbursing Beacon House
and other treatment centers for services at rates reasonable enough for
a program to remain open. But the world was beginning to change. By
1986, “managed health care” had become a feared buzzword, and soon
thereafter the practice became prevalent throughout the industry.
Obtaining authorization from insurance companies to treat those seeking
help for alcohol and drug dependency became increasingly difficult, and
consequently it became more challenging for Beacon House to remain open.
To the credit of a very dedicated board and staff, it did.
By the summer of 1993, however, Beacon House was at a crossroads. In its
attempt to continue providing services while battling managed care, it
found itself strapped with accounts receivable in excess of $300,000 on
an annual budget of $450,000. The board of directors was faced with
borrowing money to make an August payroll. It wasn't until then, at
Beacon House's breaking point, that a re-evaluation of its mission,
goals, and purpose in the community occurred.
I was hired by the board to help with this evaluation process. Our first
discussion pertained to the most important question: Do we remain open?
And if that were to be the case, how would we go forward as a business?
The next question after that was: Do we continue to accept insurance
payments or do we move toward accepting only cash payments?
Our mission statement says, “Beacon House will provide comprehensive and
effective treatment to individuals experiencing the disease of chemical
dependency at an affordable fee.” For years, Beacon House had been
providing comprehensive and effective treatment—that much we knew would
not change. But we kept coming back to “at an affordable fee.” A
decision was made there and then: We would provide affordable, as well
as effective, treatment. But how?
Negotiating the maze
How does any program deal with the ever-changing requirements put forth
by managed care? How can one remain treatment-focused while dealing with
matters such as application of the American Society of Addiction
Medicine's (ASAM's) Patient Placement Criteria, “doc-to-doc” reviews,
and “step-downs”? To fulfill our mission, we chose to accept, if not
embrace, these challenges.
ASAM's Patient Placement Criteria are a standardized treatment matching
tool used since the early 1990s. These criteria are used to evaluate
systematically the severity of a patient's need for treatment. ASAM uses
a fixed combination of rules to determine which of four levels of care
is best suited for the substance-using patient. The levels of care are
outpatient treatment (Level 1), intensive outpatient/partial
hospitalization (Level 2), medically monitored intensive inpatient
treatment (Level 3), and medically managed intensive inpatient treatment
(Level 4).
To work within these guidelines, one thing became crystal clear: Beacon
House could no longer function solely as a social model program. Its
services needed to be expanded and professionalized. My first move was
to hire a medical director. I chose John Bennetts, MD, a well-known
physician and addictionologist on the Monterey Peninsula. Bennetts
already had nearly 15 years of experience in the treatment field, and
had worked with me twice before at local treatment hospitals. His hiring
gave us a tool we did not have before: a treatment-experienced,
ASAM-certified physician.
More needed to be done. Understanding that managed care was designed to
reduce treatment mismatches (placing someone in outpatient care when
residential is more appropriate, for example), I conducted a
comprehensive assessment of our community's needs for new programs. It
was obvious that the community had two immediate needs: a cost-effective
non-hospital detoxification program, and outpatient treatment at a
reasonable fee. By this point, Beacon House had the staffing and
structural capacity to accomplish both, and thus we began providing
these services.
Besides adding programming and staffing to assist with managed care
requirements, we began to seek out relationships with the insurance
companies. Our belief was that the more relationships we developed, the
more individuals and families would gain access to our program. We
consciously set fees that would be manageable for our clients. We
incorporated that fact into all of our marketing efforts: on our Web
site and in print and broadcast ads. We recognize that we have to have
fees at a level that brings in enough revenue to stay in business but
also at a level that is reasonable for the demographic we serve. Our
mission is to help as many individuals and families as we can, insured
or otherwise.
Finally, I hired Elena Coyt, a billing and collections expert who
previously had established relationships with several insurance company
contract managers. By building new relationships with these companies,
we increased the potential number of insureds whom we could serve. We
also improved our own reimbursement rates for all of our services. With
Coyt's business experience, we have been able to reduce our accounts
receivable to less than 2% on a budget of $1.7 million.
Being more flexible
As providers we know that one of our responsibilities is to help reduce
clients' stress in entering treatment. Offering flexibility in program
selection at affordable rates helps accomplish this goal. In California,
most insurance companies and health maintenance organizations will cover
services for detox and outpatient treatment as well as residential
treatment. By offering all of these services, Beacon House increases the
opportunity for those with or without insurance to begin their recovery
life.
The first step in evaluating a program's suitability for the prospective
patient and his/her insurance coverage occurs during assessment. It is
only then that a patient is able to determine if treatment at a
particular facility is the correct fit and financially manageable. At
Beacon House we do this in two ways. First, the intake coordinator, a
clinically trained therapist and the first point of contact for all
potential patients, conducts a clinical assessment to set the tone and
the course of treatment. Second, our medical director at the time of
admittance assesses each client for physical capacities and
appropriateness for our facility and programs. If our program is
appropriate for this individual, a medical treatment plan is developed.
The assessment ensures that we admit the very best candidates for
recovery and that they are making the best use of their insurance
coverage.
If a potential patient is not a good candidate for recovery at your
treatment facility, for any reason, respectfully refer them to another.
Once a patient is admitted, a psychologist with advanced credentials in
clinical psychopharmacology assesses him/her to determine the most
appropriate treatment protocols. With these assessments for
appropriateness, admittance, and treatment, the clinical staff is well
positioned to help the patient and our treatment coordinator prepare for
the patient's utilization reviews.
To address insurers' use of the ASAM criteria and utilization reviews,
we found it to be the best practice to have a trained, experienced
clinician coordinate the process. At Beacon House we use treatment
coordinator Tara McKinney, a licensed marriage and family therapist. She
oversees all treatment protocols and reviews every case to be in the
best position to advocate the optimum care for our patients.
We have found that by conducting comprehensive and accurate assessments
we are better prepared to work with managed care, and managed care is
more willing to work with us. The result is that the patient receives
the most appropriate treatment and gets the best use of his/her
insurance coverage.
Conclusion
Things continue to change in treatment and insurance reimbursement.
Someday, customary reimbursement for the cost of living in a sober home
might be the case, as well as reimbursement for post-treatment case
management. Beacon House will be prepared. We currently offer a sober
living home for women, an extended transitional living program for all
participants, and a family support program, and soon we will offer a
one-year post-treatment case management program.
To some in our industry, accepting insurance payments is seen as
antagonistic to financial success, and a relationship with an HMO is
defined as sleeping with the enemy. Yet Beacon House has always been and
will remain a patient-centered program, and we see cooperation with
these companies as an opportunity to help more people in their desire to
live a life of sobriety. |
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Mark Willison is CEO
and Clinical Director of Beacon House in Pacific Grove, California.
Since 1979, when he opened the Behavioral Sciences Institute in
Bakersfield, California, he has specialized in the opening of
health-related clinics and the financial restoration of existing
programs. He can be reached via
info@beaconhouse.org. Photo
of Mark Willison by Dani Roth Photography |
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