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5 ways to stop losing money on behavioral health programs

Apr 15, 2023

Legislation to ensure parity between physical and mental health benefits hasn’t been enough to keep many providers solvent. Across the country, clinics say they’re losing money on mental health.

This shouldn’t be a surprise. Mental and behavioral health departments often operate at a disadvantage. Reimbursement rates are lower for mental healthcare than other specialties (and haven’t increased in decades), and they rarely cover the cost of care. Participation among insurance networks is also lower for mental healthcare, and repayment structures are complicated.

Meanwhile, mental and behavioral health needs are increasing. Self-reported anxiety and depression symptoms increased 400% since the pandemic. For hospitals to meet growing demand — and stay in the black — they have to tighten payments and billing practices for mental health services.

Five strategies can help providers recoup more revenue from their behavioral health services:

  1. Invest in billing expertise: Reimbursement rates and cost-sharing between federal, state and county entities is hard to untangle. Providers need specialty billing teams to manage payments for mental health services. The revenue department needs to understand the nuances of inpatient and outpatient care, including levels of authorization and how payments are split between medical and mental health and professional services. Without in-depth knowledge of how behavioral healthcare billing works, it’s easy to leave money on the table.
  2. Calculate all the costs: Co-pays, deductibles, write-offs and other “it’s not worth it” expenses add up. Spend time calculating the total cost of services and the reimbursements that are available to you. Then, create a revenue target and a strategy for optimal reimbursement.
  3. Tailor your billing system: Customize your billing system to accurately reflect the patient and payments journey for mental health services, from authorization through collections. Multiple health plans (and rates of reimbursement) may be involved in a single admission. Make sure you can see and track the entire process.
  4. Educate financial counselors: It’s common for mental health patients to be uninsured or underinsured, even though access has expanded in recent years. Train financial counselors to interact with behavioral health patients and their caregivers in a positive and empowering way. Financial counselors should be aware of potential copays and deductibles and proactively set up payment plans for patients.  
  5. Establish point-of-service collections: Increase remittance by collecting copays and deductibles at the time of service or before patients leave your facility.

How Wipfli can help

Wipfli can help you achieve financial health. Our team analyzes your revenue cycle and helps you design new and improved processes. Capture more revenue so you can reinvest in your organization and patient outcomes. Contact us today to learn more, or keep reading:   


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Wipfli Editorial Team