Business Consulting for Substance Abuse Treatment Facilities

There aren’t many businesses that are more complicated to operate than a substance abuse treatment center.  Administrators running these companies have the most volatile clientele, the most dysfunctional employees and the most unreliable payers (insurance companies) to deal with on a regular basis.  As if all that wasn’t difficult enough, the medical field is the most highly regulated industry in the United States.  Dealing with the bureaucracies of the licensing divisions and regulatory commissions can be more than taxing at times.

Many individuals who have accomplished the monolithic feat of recovery feel compelled to reenter the field as professionals in an effort to give something back and help others overcome their struggle with addiction.  Some become alcoholism and substance abuse counselors while others with the wherewithal to launch their own treatment facility find themselves in an ocean of question marks.  Even after amassing a vast erudition pertaining to the clinical process of treating addiction, there’s an entire business aspect required to properly run this type of facility.

Even a degree in business won’t prepare you for the many challenges you’ll face as the owner of an addiction treatment center.  Certain industrial nuances are subjects not found in typical college textbooks. However, don’t ever let a lack of knowledge hinder your entrepreneurial spirit.  There are always consultants with the knowledge and experience you lack who can assist you in either starting up a treatment center or help you to manage an existing treatment center more efficiently.

Most consultants who are skilled in this area are former CEOs of treatment facilities themselves and have already made all of the mistakes you’re about to make in your startup.  Even if you’ve been operating a treatment center for years, there may be certain aspects of your business that need improvement or perhaps you want to expand your business in an area of the industry that you are less versed in.  Consultants are in the business of selling information that could help you and your company generate revenue or operate more efficiently, thus reducing expenses.

The field of addiction treatment is a $35 billion per year industry boasting enormous opportunities in almost every region of the country.  It’s not only a recession-proof industry, it’s an industry that has historically done better during difficult financial times.  It’s not the easiest business to start and certainly not the easiest business to run.  However, under the tutelage of a business consultant, your experience will be far less tumultuous. 

For more information or to speak with a business consultant that specializes in the field of substance abuse treatment, call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.

10 Ways to Increase Revenue at a Substance Abuse Treatment Facility

Running any kind of medical office can be challenging.  Taking care of people’s lives, juggling regulatory compliance issues, getting insurance companies to pay, dealing with staff, etc. can all be far more complicated than the problems most other business owners deal with on a day-to-day basis.  Having recovering addicts as your clientele further compounds the stressors associated with your operation as they tend to be more unreliable, unstable and unmotivated than most other types of patients.

For as much as your patients and staff would like to think that you are running the facility to earn your place in heaven, we all know that it’s a business and it has to make money in order for it to remain operational and continue to help people.  The following strategies may or may not be practical in your operation.  Some you might have already implemented.  Hopefully I can suggest some other ideas that you haven’t thought of yet that may help.

1.    Dual Focus Programs

Very often, patients suffering from addiction have ancillary diagnoses that need to be addressed and also require treatment.  In some cases, one diagnosis can either cause or exacerbate the other diagnosis.  For example, if a patient is suffering from a mental health disorder, they may be inclined to self-medicate and become addicted to alcohol and/or other drugs.  Not only is treating both diagnoses together clinically sound, having such programs can position your facility to receive referrals from certain agencies specifically because they meet the needs of certain patients.

Conditions that can be appropriately packaged together with substance abuse treatment are as follows: 

•  Mental health disorders
• Neurological impairment
• Hearing impairment
• Eating disorders
• Offenders of domestic violence
• Victims of domestic violence
• Sex offenders
• Post-traumatic stress disorder 

2.    Special Interest Programs

As with the dual focus programs, other special programs can be designed to accommodate a particular type of patient.  Instead of addressing a primary or secondary diagnosis, the special interest could just be a certain classification, distinction or circumstance that differentiates one patient from the general population.  The following are examples of some possible special interest groups: 

• Language other than English
• Medical professionals 
• High-profile individuals
• Law enforcement professionals
•  Adolescents
• Gay/Lesbian
• DWI/DUI 

Unlike the dual focus programs, there’s no difference between treating these types of individuals and general population patients.  However, their classification or circumstance may warrant them to be segregated into different treatment groups as a more effective means of therapy.  For example, if a patient can’t speak English, placing them in a general substance abuse treatment program is pointless.  Medical professionals may have lost their license due to their addiction.  Undergoing treatment may be a prerequisite to reobtaining their licensure and certain reporting may be necessary.  High profile individuals may feel more comfortable if they are with similarly situated individuals, making their treatment more effective and their recovery more probable.  Law enforcement professionals may have a conflict of interest being integrated into the same programs with other individuals who they may have come in contact with during the course of their duties.  Adolescents may have an easier time relating to other patients their own age, rather than adult patients.  Gay or lesbian patients may feel more comfortable with other like-minded patients, making sobriety easier for them to achieve.

Recovering from addiction is challenging enough.  Removing certain obstacles from the equation gives the patient a better chance at achieving their treatment goals and focusing on the underlying causes of their addiction.  Having these special programs may attract more apprehensive patients and/or referrals, thus increasing your facility’s revenue.

3.    Sober Housing

Offering room and board to the homeless population is a service for which there is an overwhelming public need.  Many individuals who are homeless also have some type of underlying mental health diagnosis and/or substance abuse addiction.  Creating a program that is designed to accommodate this special needs population opens your facility up to an influx of referrals that will come from many sources.  The amount of homeless individuals in any region is staggering and whatever services that may be available are underutilized.  These are low functioning individuals who are unable to navigate their way through the system and need their hands held through the process.

The reimbursement for this type of room and board is usually obtainable through social service programs.  Even though the remuneration may not be particularly sizable, being able to channel this population through your treatment programs can be very profitable.

4.    Child Care

As you know, mothers can be addicts too.  However, not having suitable child care options can prevent a mother from participating in a treatment program.  Having a lower paid employee made available to tend to patients’ children can open the doors for certain female patients to attend.

5.    Plan Enrollment

Some patients may not be able to be treated at your facility because they are uninsured and cannot afford to pay themselves.  Having certain staff available to assist in the enrollment of Medicaid and other affordable health insurance programs could make the difference between your facility getting that patient or not.  You may be able to subcontract this function to third parties who receive payment by the plans themselves for providing enrollment services. 

6.    Provide Transportation

If you are treating the indigent population, some may not have the means in which to get to your facility.  They may not have a car or enough money to pay for public transportation.  This could be a very real factor for some individuals.  Purchasing or leasing a van could be a minimal expense in comparison to the revenue generated by the increased treatment sessions of patients that could not have otherwise attended without it.

7.    Donate Space to Self-Help Groups

Chances are, there is available space at your facility that is unused at certain points of the day or evening.  Allowing certain groups such as Alcoholics Anonymous to utilize this space for their regularly scheduled meetings could raise awareness of your facility to the very same demographic you market to and want as patients.  Even if a potential patient is aware of your location, being there for AA meetings might encourage them enough to inquire about your facility’s treatment programs. 

8.    Develop Qualified Service Agreements

Networking with other facilities and healthcare professionals that may provide different but yet related treatment services is important.  There may be mental health providers or medical facilities in your area that are not qualified or licensed to treat patients for substance abuse.  If they are able to identify an addiction or dependency diagnosis, they have a legal obligation to make an appropriate referral if they cannot provide treatment for that particular condition.

A QSA is a non-binding agreement that basically states, we’re here and you’re there.  We’ll referral patients to you when we come across individuals who require your services.  This type of agreement doesn’t require the facility to refer such patients to your facility.  However, it merely states that if a patient is in need of the type of treatment that you provide, your facility is on their list of possible agencies that they could refer to.  In some cases, it’s required to have these agreements in place, rather than a facility not having a well-defined plan as to where they can refer patients to if they lack the licensure or capability of treating them.

Seek out any health care facility or professionals who you think could come in contact with individuals suffering from addiction.  These could be emergency rooms, private practitioners, primary care physicians, mental health facilities, crisis centers, urgent care facilities, etc.  This is a good way to formalize a referral relationship.

9.    Offer Patient Incentives

Patients respond to positive actions too.  Some of your patients might genuinely want to get better but unfortunately, a large portion of the patients at your facility might only be there because they were forced by a law enforcement agency to undergo treatment as a provision of their parole or a condition of their probation.  Many substance abuse patients are unmotivated.  Part of this may be a treatment issue.  However, there may be ways of offering incentives for them to attend treatment.

For example, if you’re running an outpatient program, offer your patients a discount on their co-payment if they attend a certain number of consecutive treatment sessions.  If they don’t have a co-payment, offer them a gift certificate for a free cup of coffee or a small amount at a local fast food establishment.

No one has ever been hurt from a little incentive.  It may cost your facility a $5 copay ever few visits or a $5 gift card but this is less than you will be receiving from the insurance company to actually treat the patient.  Undergoing substance abuse treatment is a monumental task that is difficult for even the most tenacious of souls.  A little reward goes a long way.  Even if it’s not monetary.  If you think gift cards or monetary incentives are too tacky for your operation, think of another incentive that is more appropriate.  You’ll be surprised how this will increase attendance. 

10.  Renegotiate Your Contracts

Depending on how long it’s been since you initially entered into a contractual relationship with an insurance company or managed care company, you may want to consider contacting them to renegotiate higher reimbursement rates.  Even insurance companies understand the concept of cost-of-living increases and some of them may be willing to make incremental adjustments to your fee schedule.  Some companies may fight you on this but it doesn’t hurt to ask periodically.

For more information about increasing revenue at a substance abuse treatment facility, please call Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.  

Keeping a Drug Treatment Center Profitable

The general public may think that drug rehabs are cash cows but to those of us who have run them or are currently running one, it’s more challenging that most people think.  Regarding the supply and demand issue, alcoholics and drug addicts are never in short supply.  However, finding ones that are receptive to treatment can be.  Strengthening relationships with law enforcement agencies that most likely provide the lion share of your referrals is crucial to keeping numbers up.  However, what if referrals, admissions and treatment sessions are steady but cash flow is a problem?  We may need to pop the hood and take a look inside to identify the problem and devise a solution.

The first thing to determine is whether you have negotiated high enough rates with the insurance companies you are contracted with.  Managed care companies have tried to, and have been successful at, driving the treatment fees down over the course of time.  Have they gone too far with your contracts?  Let’s find out.  It’s very easy to determine your bottom line.  Go to your financial statements and add up all of your operating expenses for a given period of time…let’s say last year.  Then divide that dollar amount by the number of treatment sessions your facility has provided for the same period of time.  That number is your breakeven point.  Therefore, your fees for service must be higher than that number. 

If your operating expenses exceed your revenue, you have a fundamental problem that must be resolved immediately to ensure the fiscal stability of your operation.  One solution is to try to cut expenses.  You may need to bring your bookkeeper and accountant into the room when doing this.  Although you may not want to sacrifice clinical care for financial profits, there may be plenty of other ways to trim your company’s fat.

If it’s been years since you first negotiated your contracts with insurance providers, it may be appropriate to revisit the possibility of renegotiating your rates.  Don’t expect this to come easy but if you push a little, you may get some of your payors to give in.

If you’ve analyzed the margins between your expenses and fees for service and they seem to check out, you could be experiencing an accounts receivables issue that is causing your cash flow problems.  In other words, your fees are fine but you’re not getting paid on time.  This can either be caused by the utilization review process that is played by most managed care companies.  If you don’t receive authorization for treatment prior to actually providing the services, you won’t get paid.  If preauthorization is not the issue, the insurance or managed care companies may be participating in stalling tactics and withholding your payments. 

Many insurance companies participate in these stalling tactics so that they can earn interest on your money.  Chances are, if they are withholding your payments, they are also withholding the payments of hundreds of other health care facilities across the country.  In some states, stalling tactics are illegal and punishable by late fees.  However, keep in mind that your relationship with HMOs can be compromised if you sick the attorney general’s office against them for violating these regulations.  A more strategic and diplomatic approach may need to be implemented.  Tread carefully when going up against the people who pay you. 

One of the hardest things about running a medical office is receiving payment on time from historically the worst payors on the planet.  Insurance companies know every trick in the book to delay your payments or avoid making them entirely.  Most insurance companies create policies intentionally complicated to specifically confused health care providers, hoping that they don’t have the staff that can decipher the convolution they’ve created.

One solution to this problem is outsourcing this function to a company that specializes in billing for behavior health services.  Most of them work on a contingency basis and their system may be more sophisticated than your internal billing department.  They also may have more manpower than your office does.  Remember that your company’s area of expertise is providing substance abuse treatment.  Their area of expertise is billing.

For more information on keeping a drug treatment center profitable, please call Ashlar Consulting Services at 305-849-9399 or visit www.AshlarConsultingCorp.com.