Most small sustainable mental health practices require the therapist to wear many hats. Often all at the same time. This includes things like being your own administrative assistant, a medical billing specialist, marketing maven, and perhaps even the office janitor. This can be a real challenge, as these other tasks can end up taking your focus off your chosen specialty which is providing your patients with the highest levels of care.
Ultimately, the better you understand the business aspect of your practice, the more time and energy you will have to serve your client. Of course, this includes ensuring that you are reimbursed for the services you provide in a timely, and consistent manner. By developing a rich and consistent revenue stream, you can potentially start to hire additional administrative tasks, attract new patients, and even expand the scope of your practice.
Medical Billing & Coding Errors Can Interrupt A Consistent Revenue Stream
Maintaining a consistent revenue stream sounds great on paper. Though it can be a challenge to implement in the real world. Especially if you are a solo practitioner. One of the major challenges in this arena is that medical professionals are rarely paid directly by their patients.
Most of the time a claim is filed with the patient’s insurance provider, and if everything is perfect, you will likely receive the payment promptly. Though if there is a problem at any step along the way, you could see inconvenient delays, have to field additional questions, or experience a claim rejection. Any one of these things can make it difficult to maintain a consistent revenue stream.
This could come from any one of several sources including
- Medical billing code errors
- Missing information on the claim
- A patent with insufficient coverage
- Failing to file the claim within the insurance provider’s deadline
Factors Affecting Reimbursement Rates Not Related To Medical Billing Errors
There are several factors that can influence how the insurance carrier calculates the rate for mental health services rendered. Though four key factors rise to the top and need to be addressed to help maximize your reimbursement rate.
Four primary factors go into an insurer’s calculations for what they will reimburse for mental health services.
Your License & Education
Your degree of education and the license you hold will both play a major role in your reimbursement rate. There is a significant difference in rates between a Psychiatrist, a Psychologist, a Licensed Professional Counselor, and a Licensed Marriage & Family Therapist. At the same time, the level of education you have received will also be factored in. For example, a mental health physician with a Ph.D. will typically be reimbursed at a higher rate than a practitioner with just a Master’s or a Bachelor’s degree.
Your Area Or Degree Of Specialization In The Mental Health Industry
The National Provider Identifier Registry will hold your specialization information, which will also factor into your reimbursement rate. As an example, someone who specializes in Addiction Psychiatry will generally be reimbursed at a higher rate than a Cognitive & Behavioral Therapy specialist. This is just one of the ways that insurance providers incentivize specializations throughout their approved network.
Your Location & Coverage Area
Insurance providers are constantly looking for ways to build out a full collection of physicians and mental health providers throughout their network and in the communities, they serve most. In this way, your location, and the demographic areas you cover can factor into your reimbursement rate. Let’s say that the city or county you practice in has a shortage of mental health providers or specialists of your type. This can increase your reimbursement rate compared to an area that might already be saturated with mental health providers with the same area of experience or experience level.
The Demand For Your Specialization
In the same vein as your location, the general demand or need for your type of specialization can also factor heavily into your reimbursement rate. Let’s say that the county you practice in has a statistically high rate of addiction and crimes related to substance abuse. In this example, the demand for an addiction specialist will be higher, and there is a greater likelihood of programs that need to be established to help the patients in that community. This could significantly increase your reimbursement rate compared to say a marriage and family therapist in the same demographic area. From the insurance provider’s perspective, being an in-demand specialist increases the number of patients you might see, which further improves overall profitability.
Be Prepared For Rate Fluctuations
Rate fluctuations can occur due to a wide range of factors. This can include things like an increase or decrease in demand for your particular area of specialization. As you can imagine, insurance providers are always keen to update their rates in direct response to changes in the market and community demographics. Unfortunately, insurance providers rarely publish their rates for a specific area or demand. So, don’t be surprised if you find yourself seeing a reduced reimbursement rate as the demographic details change in the community you serve.
Negotiating A Reimbursement Rate That is Customized To Your Practice
It’s important to remember that your reimbursement rate is truly unique to you. Once you are accepted into a payer’s network, you will start the process of negotiating your reimbursement rate. It’s very important to present all of your credentials accurately, as well as noting your areas of specialization. Some networks allow for a fair amount of wiggle room in this negotiation process, while others simply have their own in-house flat equation. Regardless of the model you are dealing with, being thorough and accurate will go a long way toward getting the best possible reimbursement rate from that insurance provider’s network.
You also need to remember that every year, you will be allowed to renegotiate your rate. This is especially handy if you are continuing your education or you are expanding your area of expertise. It might also help to present an argument for demographic needs in the region you serve.