Best Practices for Behavioral Health Organizations Contracting with Commercial Plans

Written by: Ray Dalessandro and Gary Humble

Is your behavioral health agency exploring contracting with commercial plans? Here are some critical items to consider before you do!

Over the last few years, many Community Behavioral Health Centers (CBHCs) focused on their administrative and clinical operation systems. The reason? They needed to meet the needs of their clients' Medicaid Managed Care Plans (MCPs).

At the same time, though, many agencies are noticing an increase in the number of requests for clinical services from potential clients having commercial insurance.

Commercial insurance is a whole different ballgame regarding…

• Covered services
• Billing requirements
• Client financial responsibility
• Eligible providers

Agencies that assume that a commercial insurance plan “operates” the same way as a Medicaid plan will be very disappointed. They’ll also experience a decrease in expected revenue from these commercial plans.

If your agency hasn’t contracted with commercial insurance plans to date, don’t worry. Together with G&M Consulting, we’ve created this list of commercial insurance credentialing best practices.

Best Practice #1: Clinical and Admin Requirements

We cannot stress this first point enough.

Carefully research and review commercial insurance plans’ clinical and administrative requirements on its website.

Part of the due diligence process is to explore all clinical and administrative aspects of a commercial insurance payer.

Your organization should review such areas as…

• Clinical authorization requirements
• Clinician participation criteria
• Reimbursement of your services

You’ll also want to conduct a cost/benefit analysis to confirm two things. First, you need to make sure that the “squeeze is worth the juice” in contracting with commercial payers. Second, ensure that reimbursement is more than your cost to provide services.

Best Practice #2: Understand Required Contracts

Understand what kind of contract your organization will need to have its clinical services covered under commercial plans.

Unlike Medicaid, commercial insurance plans have different kinds of contracts to pay for the clinical services of covered members.

It has one type of contract (Group) that will cover routine outpatient services such as…

• Assessment
• Individual therapy
• Physician visits

Many payers have a different agreement (Facility/Institutional). These cover higher levels of care such as…

• SUD IOP
• SUD PHP
• Residential Treatment

Those are the services that may be more complex to understand the terms around them.

Best Practice #3: Administrative Infrastructure

Does your organization have the organizational administrative infrastructure to manage commercial contracts?

Your organization will need to comply with the various commercial insurance requirements. These requirements relate to…

• Billing
• Authorization
• Client financial responsibility (deductibles/co-insurance)

Does your organization have the bandwidth to meet these various administrative and clinical requirements?

You can expect an increased workload that includes verifying eligibility and benefit levels, tracking clinical authorizations, billing the right codes (revenue and/or CPT codes) on the correct billing form (UB04), responding to denials and monitoring for expected and correct payments.

Conclusion

The commercial insurance market is a far different world than what many community behavioral health agencies experience in our Medicaid market.

Covered services, reimbursement and billing codes are just a few of the major differences you’ll encounter.

Making sure your organization does its homework on these commercial insurance Payers first before jumping headlong into the fray could save both time and money in the long term.

Always follow the carpenter's adage of measuring twice and cutting once in evaluating commercial insurance contracts.  If your team lacks the internal resources to conduct the proper considerations noted above, there are outside resources that can help.

And if you do decide to go down the path of taking on more Commercial insurance, having a good and responsive Clearinghouse will also help to ensure proper and timely payments.