Stephen Odom, PhD, CEO of New Vista Behavioral Health, believes history might be repeating itself.
“When managed care began in the early 1990s, it was a response to out-of-network pricing and paying claims at high rates,” Odom tells Behavioral Healthcare Executive. “In the last few years, since the Affordable Care Act (ACA), payers were just paying claims and decided they were not going to take it anymore and started shrinking the usual-and-customary rates or changing schedules to Medicare-plus rates. There’s been a squeeze on out-of-network payments.”
New Vista’s Simple Recovery treatment program in California recently secured in-network status for Anthem Blue Cross—its 14th managed care contract. Odom says some of Simple Recovery’s payer partners are reimbursing higher rates than they would for out-of-network.
“Anybody who wants to have a sustainable model is going to have to have some in-network, some out-of-network and some self-pay,” he says.
With forthcoming new federal healthcare policy and the unknowns of future implementation, negotiating managed care contracts might be a solid strategy for providers today. One key to securing contracts for Simple Recovery was its Joint Commission accreditation, Odom says. Payers increasingly will be looking for CARF or Joint Commission as a quality standard before considering behavioral health providers for their networks.
He says the most frustrating element of working with managed care is optimizing coverage authorizations for longer lengths of stay. Even though evidence continues to point to the greater efficacy of stays that are 90 days or more, insurance doesn’t always cover that care for patients.
“In other words, they may think intensive outpatient or outpatient treatment is fine for substance use disorders, when a treatment provider may feel patients need a higher level of care for more intense services,” he says. “There’s always tension between definitions of treatment.”
The future for providers
Odom says the national conversation about addiction is changing, and as more people seek treatment, managed care organizations will likely give providers a closer look—especially the out-of-network providers that are submitting high-priced claims. The treatment programs that will sustain their businesses well in the future are those that have the capability to work with managed care.
“The writing is on the wall that they will compress payment and make us be in-network or nothing,” he says.