Reimbursement rates that do not increase commensurate with the cost of doing business or the increasing administrative costs associated with serving healthcare funders is a big challenge. Although the concept of cost controlling is relevant, put into context the fact that health insurance company’s profits and cash flow continue to improve and their CEOs are making millions, some in the $10+ million per year range. https://content.naic.org/sites/default/files/inline-files/2020-Annual-Health-Insurance-Industry-Analysis-Report.pdf.
Top 5 actionable steps providers can take
- Diversification across and within funder types – commercial, Medicaid, Waiver, Schools, Tricare, private pay, etc in your service region(s) is certainly important, but I would argue this is not a long term or systemic approach or resolution since it does not directly address the issue identified in the title of this article.
- Have it in your business plan to renegotiate with your funders on a regular basis. Perhaps even try to negotiate annual increases as part of the initial terms even if it comes at a small short term cost. I.e. maybe settling for slightly lower rates at the outset in exchange for annual increases. While renegotiating is an important part of the plan, the reality is funders often won’t make adequate or in some cases any changes.
- Build business models where you have it in your strategic plan to shift to alternate regions and or payers after X years in the absence of funder reimbursement increases. A difficult choice to make.
- Working with industry experts/ABA business consultants is also a good option as they work with various providers and payers across different regions and get to see broader industry trends. They also see what works and what doesn’t for other aspects of operating an ABA agency, and it positions them to generate more innovative ideas in supporting their clients.
- Supporting national and state trade associations and professional organizations with a mission or history of demonstrated effort toward this end is also important.
What do you think?
Brandon Herscovitch, Ph.D., LABA, BCBA-D
Partners Behavioral Health can help with your clinical and business standards, compliance, and outcomes. We can help you scale an ethical ABA practice you’re proud about.
