Best Practices in Insurance Contracting

Todd A. Ward, PhD, BCBA-D (bSci21Media, LLC)

Emily Roche (ABA Billing)

The decision to start your own ABA agency comes with a mountain of front-end tasks to get your company up and running, not the least of which is insurance contracting. Recently, Rethink Behavioral Health hosted a webinar with guest speaker Emily Roche, Director of Services for ABA Billing. In the webinar, she provided a roadmap to help navigate your company through the byzantine world of insurance requirements, several of which are provided below.

1) Start a business. The first step is, of course, to start a business. The vast majority of ABA companies take the form of Limited Liability Companies (LLCs). Starting an LLC is a fairly straightforward process that typically starts with the Secretary of State or similar office in your state. An LLC is a relatively flexible business structure that also provides liability protection against your personal assets in the case of a lawsuit. After you receive your Certificate of Formation from your state, you can start the insurance contracting process. Insurance companies will need a company NPI number, physical address, phone number, and, yes, a fax number for your company. Dawn Mackey, Director of Business Solutions for Rethink recommends consulting with a tax attorney if you are not sure which business structure as it is the most important decision you will make as a business owner. The type of business structure you choose will impact not only how much taxes you pay but will determine how much personal liability you may incur and what type of funding you can raise for any future business growth plans. For more info about choosing a business structure visit the Small Business Association.

2) Seek out a behavioral health contract. When you start your search, you are specifically looking for a “behavioral health contract.” These contracts cover ABA therapy, but differ from a “medical contract.” If your company will solely provide ABA services then all you need is the behavioral health contract. If, however, your company will provide ancillary services such as Speech-Language Pathology, Physical Therapy, or Occupational Therapy, then you should also seek out a medical contract.

3) Group vs Individual Contracts. If you plan to have one person providing ABA services, then an individual contract is best. In most cases, however, a company plans to have multiple certified providers (e.g., BCBAs). In this case, a group contract will save you much time and headache. When you hire new providers, or current providers leave your company, all you have to do is add or delete the person from the group contract, rather than forming a new contract for each person under their name. Keep in mind, however, that most companies will not give you the group contract until you actually have multiple providers. The process of adding providers to a group contract is known as credentialing. The process usually takes several months and requires that your individual providers each have an NPI number and a CAQH number. When hiring, ask that individuals obtain these numbers before their first day as a requirement for employment to speed up the overall process.

4) Make friends with your provider representative. Your provider representative will be your go-to person throughout the initial contracting process and beyond. As such, you want to develop a friendly relationship with them. Doing so will make the entire process easier, especially as changes come through frequently regarding new assessment and certification requirements, timelines, fee schedules, billing codes, etc… It is always helpful to have a friendly person on the other side.

5) Read the contract and request amendments. Make sure that read your entire contract. Most will be boilerplate contracts that are not made specifically for ABA providers so make sure that you read the entire contract and ask to have inappropriate terms removed. For example, your contract may have wording for 24-hr clinician availability, which typically doesn’t apply to ABA programs. In such cases, you can ask to have an amendment in writing stating which parts do not apply to your company. Most insurance companies also have a provider manual, which might have more information specific to ABA. Make sure to read the manual and incorporate amendments as necessary into your contract before signing.

6) Negotiate your Timely Filing Deadline. Several deadlines apply to insurance contracting, most of which are negotiable with the insurance company. For example, the initial contract will likely have a default timely filing deadline of 60 days, which means you have 60 days to file a claim from the date of service. Often, you can extend the deadline to at least 90 days, while 180 days would be ideal. In many cases, the insurance company might not agree to 180 days but will negotiate and meet in the middle.

7) Negotiate your billing rates. You can always try to negotiate billing rates with commercial insurance, but do your homework first. Part of “doing your homework” involves writing your business plan. You need to know your costs for doing business. Some of your costs can be controlled but many cannot be. Know your costs associated with the staff providing the services in addition to other business costs that may be directly or indirectly related to the services you will be providing. In addition to paying your staff you will need to account for the costs of any employee benefits, payroll taxes in addition to the usual costs that a business owner incurs such as rent, business insurance, taxes, outsourcing services and investing in technology platforms such as Rethink which will allow your company to better track and manage your practice management needs. When negotiating, you need to be able to articulate what sets your company apart from the others, otherwise they have no incentive to pay you more. For example, having a company that has BCBAs with years of experience or that provides services across an entire state can give you leverage in the negotiating process. Just keep in mind that any government set rates, such as those with Medicaid or Tricare, are non negotiable.

For much more on the intricacies on insurance contracting, be sure to watch the recorded webinar, and let us know your own best practices for insurance contracting in the comments below! Also be sure to subscribe to bSci21 via email to receive the latest articles directly to your inbox!

Todd A. Ward, PhD, BCBA-D is President of bSci21 Media, LLC, which owns bSci21.org and BAQuarterly.com. His company aims to disseminate behavior analyisis to the masses through non-academic publication outlets. Todd is an editorial board member for Behavior and Social Issues and previously a Guest Associate Editor for the Journal of Organizational Behavior Management. He has worked as a behavior analyst in day centers, residential providers, homes, and schools, and served as the director of Behavior Analysis Online at the University of North Texas. Todd’s areas of expertise include writing, entrepreneurship, Acceptance & Commitment Therapy, Instructional Design, Organizational Behavior Management, and ABA therapy. Todd can be reached at [email protected]

About ABA Billing

With over 25 years of progressive accounting management and software experience, coupled with over 7 years of ABA specific back office functions, ABA Billing offers top-notch, personal touch billing services to ABA providers as affordable rates. We are a service organization built on the motto of having a “Helper’s Heart” – believing strongly in delivering exceptional customer results. For more information, visit ababilling.net

About Rethink Behavioral Health

Rethink Behavioral Health provides the tools every behavioral health provider needs to manage their practice and deliver quality ABA treatment effectively & efficiently. Rethink’s easy to use web-based software streamlines client care with sophisticated yet intuitive tools for both clinicians & administrators. For more information, visit http://www.rethinkbh.com.