Behavioral health providers are facing increasingly difficult billing challenges, keeping them from optimizing their bottom line. An extremely common cause for claim denials? You’ve guessed it; when a patient has a hidden carve-out plan within their mental health benefits. These plans catch providers off guard and can have a large impact on the time it take them to receive their reimbursement. So what are carve-out plans and how can the right software simplify how providers handle them?
What are Carve Outs?
A “carve-out” is when an insurance payer “carves out” specific services from a plan. This has historically been done with behavioral health services. Patients still maintain coverage for behavioral health services, just not with their medical insurance carrier. These contracts for coverage are instead sent out to third parties.
When an insurance company contracts out these services, they usually do so to improve their own bottom line. By giving third parties these responsibilities, they can pay them out at a reduced rate or simply not offer reimbursements to providers at all. This is a popular option for payers that are managing the increase of mental and behavioral health service utilization that has occurred over the last few years.
Why Carve-Outs Cause Billing Issues for Providers
One of the most common grievances that providers have with carve-outs is that they often occur under the radar. Practices are frequently unaware that a carve-out exists on a client’s insurance plan, causing them a broad variety of financial headaches. The billing landscape is already extremely complicated to navigate and requires detailed attention or else providers lose out on important revenue.
When it comes time for a patient to communicate their coverage to a provider, most individuals will hand over their medical insurance card with the assumption that that is where their mental health coverage is housed. There is no way for a provider to know otherwise if the patient doesn’t disclose that information. It isn’t until a claim is denied that a provider finds out that their patient has a behavioral health carve-out plan. Not only this, but just because a provider is in-network with a patient’s medical coverage, that does not mean they are in-network with their behavioral health coverage. Overall, carve-outs are a major headache due to the fact that they are not always noticeable and often unpredictable.
When carve-out plans show up by surprise, claims are often denied causing the provider to have to refile with the correct insurance company before they can be reimbursed. This delays their payment. Not only this but when a provider is out-of-network, patient balances rise. Patient payments are less reliable than insurance reimbursements and are not sustainable for small practices or solo practitioners to depend on.
Between delayed reimbursements and an increase in patient payments, behavioral health carve-out plans have a largely negative impact on a provider’s bottom line.
Billing Software Features that Optimize Reimbursements
Billing software is the key to navigating the complicated reality of behavioral health billing. With the right software, providers can finely remain prepared for whatever challenges come their way. From carve-out plans to tricky claims processing, providers that use quality software are more likely to optimize their revenue.
Billing software that can help providers tackle carve-out plans include these features:
- Electronic Prior Authorizations
- Financial Reporting
- Escrow Accounts
- Specialized Tools
- Flexibility and Configuration
- Automated Benefits Verification
- Configurable Admissions Module
- Electronic Clearinghouse
- Workflow Checkpoints and QA Measures
The Impact of a Quality Billing Partner
The frustrations of behavioral health billing extend far past carve-out headaches. While the software you use is critical to tackling the growing complexities of billing, the vendor of that software is equally as important. With a quality billing partner comes a team that is willing to teach you, take a hands-on approach to implementation, offer an explanation of carve-outs along with other billing challenges, and someone who is readily available to help your organization tackle its financial goals. Logik’s team of behavioral health billing specialist are here to help. Schedule a consultation now.