Our new IOP and PHP location in Gaithersburg, Maryland is open! It took months longer than expected but we got through the bureaucracy and the hurdles, and we are finally open. We are focusing on treating adults (for now) with complex co-occurring eating disorders, substance use disorders, mood disorders and related trauma using the same integrated transdiagnostic treatment model we’ve been using in Illinois for the past 8 years. Eleanor Annan, MD, Medical Director of this new addition, has put together an incredible clinical team consisting of multiple specialties, just as we are known for in all our Chicago- based sites. We are thrilled to finally be open, and we are looking forward to providing comprehensive care to patients, their families and their communities.
I must confess, we found the process of opening this new site was not only more challenging than we expected, but also quite concerning. The process is not designed to make anything “easy”, even if you know what you are doing. Some of this is to be expected and some just does not feel right. For a state where people are 10 x more likely to be forced out of network for mental health care than for primary health care (NAMI), one might think payors and regulators would be thrilled to welcome a new trustworthy provider…
Here is how it works: (get ready for your head to spin!)
Running the numbers before even deciding to move forward (a pro forma): Probably the most critical numbers in the analysis of whether to make such an important decision (opening a new location in another state) are the rates one can expect to receive from payors for services provided (our projected revenue)! There are a lot of fancy/expensive reports one can buy with research on rates in every neighborhood in America. However, there is no way to know what rates might be offered to you until you get into contract discussions with each individual insurance company. Moreover, you cannot get in to contract negotiations until you have a license and have passed their credentialing process. Further, you cannot get a license until you can show the state you have a lease on a location (paying rent and general liability insurance!). So… you can guess at the numbers in the pro forma analysis, but be prepared to be off, and maybe way off!
Finding a location: This part of the process appears to be easy as long as it has the proper safety features needed for behavioral health. The space needs to meet your price range, which of course is based on your financial model (which has an ESTIMATED revenue number and could be way off). Thus, a little harder than it seems….
Getting a state license: This too is straight forward if you know what you are doing except beware of getting caught in a loop with some states who require Joint Commission Accreditation as a condition of getting a license. The problem with this is TJC does not like to grant accreditation to a new location until you have at least a few patients in that location, which you can’t do until you are licensed. This seemingly endless loop can be tricky, but TJC gets it and will support as appropriate. Most license applications require having a medical director on staff as a condition for application. This means we have a doctor on staff before we are even licensed, which is months before we can see a patient based on how time-consuming this process is. Once you have a doctor on staff you need professional liability insurance, also a cost. We were fortunate to be able to afford all of this. Many are not. There are apparently companies that exist for this very purpose- they “loan” a doctor’s license just so a facility can say they have a doctor on staff for licensing even though that doctor’s license is only being used to send in the application. Shady, but true.
Getting TJC accreditation typically requires having patients prior to receiving accreditation. However, this isn’t possible until licensed and as I said above, licensing usually wants TJC accreditation as a condition of licensing. The hamster wheel can spin endlessly in some states but trust in TJC’s guidance and support.
Insurance contracts: Say there is a national payer for whom you provide tens of millions of dollars of care in your home state and with whom you have a good relationship. No issues, no claw backs, you think they value you, understand you and the rates are fair……They happen to provide coverage to people in the new state you are going in to. Is it a huge stretch to think they might offer to add the new location on to your existing contract to provide an additional valuable resource to their members in the new state? Sounds too easy. It apparently is. It turns out that within these HUGE insurance companies, each state or region apparently has a different department, and with some of them these departments don’t talk with one another. When seeking an in-network agreement with one of these payers, it is as if you are starting over from scratch. Go to their website, find the link for the new provider application, send it in and wait months if not longer for a response. All the while you are doing ongoing business in your home state. Strange.
So…. By the time you are in any sort of meaningful conversation with the payer on rates:
- You have a lease on a location.
- You have a license from the state.
- You have at the very least a doctor on staff and sometimes more if the state requires it.
- You have TJC accreditation.
- Your business is committed to entering this new location.
Imagine wanting to open an ice cream shop but the ice cream distributor won’t give you the price of a gallon of ice cream until you have a shop location, hired employees, sanitation license and are ready to open. That would be dumb! But this is the process with the insurance companies in mental health and addiction treatment. By the time you enter into any sort of meaningful conversation with them on rates, they know you are locked in and therefore have far less leverage than you would have had months earlier.
The alternative as a provider is to play the “out of network” game, either because you think you can be successful long term as an out of network provider or because you think with time you will develop enough of a reputation and following that payers will either want to partner or they will be pressured to do so by their members. This is a strategy of many, and the game apparently works for some. For those interested in providing maximum access to people, and who do not like to play games, this strategy is anything but ideal.
Intentional or not, this process is convoluted and when it’s all said and done, it’s the patients and their families who ultimately suffer because of fewer choices and higher costs. And this will continue to be the case until something changes. If value was a driver in the system and we were not stuck in a race to the bottom fee for service model, things would be very different- I pray one day it will.
Meantime, we are thrilled to finally be here. Thank you to all who helped us get through this so the real work can begin!