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Facilities must persist through inconsistencies of managed care

May 27, 2014

The task may appear daunting at times, but addiction treatment facilities must not shy away from negotiating contracts with managed care entities and pushing for appropriate residential stays for their patients, two facility leaders told a workshop audience May 19 at the National Association of Addiction Treatment Providers (NAATP) annual conference.

For the providers in the audience who may be more dependent on public funds and are relatively new to managed care, the two centers represented by the speakers could serve as role models for working with private insurers. One, Casa Palmera north of San Diego, derives about three-quarters of its revenue from insurance payment and still maintains an average length of stay of just under 40 days. The other, Seabrook House in New Jersey and Pennsylvania, made waves across the field last year when it dropped its Aetna Group contract over what it saw as onerous review practices by the payer.

Barbara Woods, Casa Palmera's CEO, introduced the session at the Charlotte, N.C., conference by saying, “Folks, there's an art to working with managed care.” She said that her center hired workshop presenter Jana Overbey to serve as its utilization reviewer because of her direct experience in the managed care industry, having worked for many years at Magellan Health Services, Inc.

“She taught our staff how to chart and how to think like managed care,” Woods said of Overbey. For her part, Overbey told the workshop audience that facilities must establish strong working ties between their utilization review team and their clinicians, all toward the goal of giving managed care reviewers the information they need to do their job quickly and effectively.

Painstaking process

Matthew Wolf, Seabrook House's vice president of business operations, outlined the basics of in-network and out-of-network arrangements for providers, and defined the key elements of forms of insurance payment such as fee-for-service, capitation and case rate. Wolf said that even with a thorough knowledge of managed care practices, treatment center leaders will experience surprises and frustrations in the process of working with insurers.

For example, he says it took Seabrook House two years to complete negotiations on its existing case rate contract.

Wolf, Overbey, Woods and some members of the audience also pointed out other inconsistencies and obstacles for which addiction treatment facilities should be prepared, such as:

  • Inconsistent policies within individual managed care companies based on geography. Wolf said, for example, that Aetna's reputation is as positive in the West as it is problematic in the East.

  • Managed care's relative lack of interest in a treatment program's holistic approach and experiential therapies. “They want to see five active hours of treatment a day,” said Woods.

  • The need to have outcome study data at the ready to demonstrate the effectiveness of one's programming, not at some distant point in the future but now.

  • For programs that treat co-occurring mental health disorders, managed care's frequent insistence that a psychiatric evaluation be conducted on the second day of detox services. One audience member said he flat out refused this type of request, adding that it is also a provider's job to educate uninitiated managed care reviewers.

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