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Problems facing Substance Abuse Treatment Centers in 2018

The Problem

Substance Abuse treatment facilities face a steep uphill battle when starting. The saturated nature of the industry coupled with complex licensing requirements, high clinical documentation minimums, zoning battles, billing regulations, protocols and marketing woes make starting a facility a daunting and difficult task. Treatment centers are often forced to turn to questionable and even unethical marketing practices. The State of Florida has established the Sober Homes Task Force to combat the growing & caustic menagerie designed to appear as a harmless solution to the substance abuse marketing woes.

In California

In California there are more than 1,200 substance abuse treatment centers. Specifically, in Malibu there are 47 licensed rehabs (even more if you include unlicensed IOP programs) and there are 12,861 residents, that means there is 1 treatment center for every 274 people living in Malibu (substance use disorder or otherwise). The nationally recognized percentage of people with substance use disorders is 8.1%. That means that there is about 1 facility for every 21 addicts in Malibu. Bear in mind that not all those people have high-end PPO insurance policies (the most common limiting factor) that allow them to go to treatment, and not all those people are even seeking help. Very few of those people qualify for treatment (Don’t have HMO plans, don’t have plans that exclude SA treatment, have a desire to get sober). So, that means that it is possible that there is 1 treatment center for every 1 to 2 qualified people seeking treatment in Malibu. This seems excessive because it is.

Making Matters Worse

To compound this problem, even PPO plans that cover substance abuse are often rejected by treatment centers due to low reimbursements and high incidence of authorization denials from the insurance company. Specifically problematic insurers include two of the biggest insurers in the CA marketplace: Blue Shield CA (Blue Shield of California) and Blue Cross CA (Blue Cross of California). BCBS of CA is a historically poor payer that is known to improperly deny claims. This all contributes to make mental health and substance abuse facility owner operators lives very complicated.

Issues with Marketing

This saturation results in an environment where treatment centers are forced into fierce competition. Many of these facilities are small, poorly funded 6 bed facilities. Many turn to Google, Bing and Yahoo for the answer but find that unless they are spending $15,000 per month or more on AdWords they might not get a single client.   So, what are they to do? Some hire ground marketers working exclusively for their facility. Others pony up as much cash as they can and hand it off to a “internet marketing company” in hopes that their cash will materialize into phone calls and admissions. What they don’t realize is the company they just handed their money to knows less about substance abuse than they do and care less about the results from the campaign and more about appearing like they are “working on it” so they can keep the invoices going out every month. Still, there are others and they turn finally to the “referent”.

Referent To The Rescue?

The referent is also known as a “street marketer” or “body broker”. At the most basic level, these “marketers” effectively auction clients off to the highest bidder often fetching between $3,000 and $8,000 per client. They then collect their bounty after the patient has stayed in treatment for 7-10 days.   Referents get clients from Alano clubs, personal relationships, relationships with unsuspecting facilities and most insidiously through “recycling”. Most commonly, the marketer maintains a relationship with the patient after the patient has admitted into a facility allowing them to track the progress of the client in an apparently harmless show of compassion. This behavior is done in effort to “catch” them after they relapse and leave the facility sending them somewhere else in order to auction them off again. In the worst situations, the referent will pay the client a portion of the “marketing fee” .  As you can probably imagine, this practice encourages relapse. Even if the “marketer” doesn’t pay the client, the marketer is hoping for a relapse.   Patients often cannot cover their responsibilities mandated by their policies (deductibles, coinsurances) and regularly require them to be waived. The federal government only requires facility operators/ owners to submit invoices for deductible and coinsurances (patient’s portion of the bill) and leaves the amount unpaid aside from the deductibles and coinsurance up to the discretion of the operator/owner to pursue or not. There is no type of requirement stating that the deductible or coinsurance must be paid, only that it must be billed.   The result from the perspective of the insurer is that they are paying time and time again for services that are equally as expensive as your average back surgery. This has propagated a sub industry of negligent, reckless and life endangering behavior that is ultimately funded by insurance and distributed by substance abuse treatment centers who participate.

There is a solution

The current environment is a tough place to be for treatment centers who want to provide legitimate services to those suffering with addiction. Insurance companies are also making it harder for the good facilities to get paid. Insurance providers have no way to differentiate good facilities from the abusers. Also, with such rampant abuse they may as well put up every roadblock possible. The treatment centers are faced with the dilemma of whether to pay a referent and risk their program’s integrity or to invest into potentially ineffective marketing. We believe that there is a way to avoid both, and that is by investing into great marketing and advertising specific to the substance abuse industry, while using your time to provide the best possible treatment to your patients. Therefore we suggest working with an elite substance abuse marketing agency in conjunction with a trusted biller. This will let you focus all of your energy on providing a great experience to your patients and improve the quality of your treatment center. Window To Recovery believes the only solution to the major problems facing substance abuse treatment facilities in 2017 and beyond is to provide excellent service to your patients.     

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