What are behavioral health carve-outs and how does it affect you?
Behavioral health and physical health traditionally have been treated differently by U.S. payers and providers. As a result, behavioral health services may face different billing situations, such as behavioral health carve-outs.
What is a carve-out?
“Carve-outs” occur when a payer separates services from their plan, essentially “carving” them out from that payer’s coverage. Carve-outs typically occur as a way to reduce costs or increase revenue.
Often an insurance company will contract out those carved-out services to another payer. The insurance company may pay those services at a reduced rate, or not at all. Behavioral health services are frequently impacted by carve-outs, which can cause confusion with providers and billing companies alike.
How behavioral health carve-outs affect your practice
Many behavioral health practices and patients are unaware of carve-outs. Insurance policies can be confusing, and policyholders may not know that behavioral health services are covered under a different company, and in turn are subjected to delayed reimbursement timelines and inconsistent reimbursements.
Possible consequences of behavioral health carve-outs
A behavioral health patient may have an insurance card from one health insurer. When verifying benefits, the behavioral health staff may find that the insurer actually contracts a separate entity for behavioral health coverage.
In that case, the provider would bill the second, contracted entity for services rendered. If the behavioral health provider is in the main insurer’s network but not in the second payer’s network, the provider is considered out-of-network for that patient.
If a patient receives both physical and behavioral health services from the same provider in the same visit, separate billing usually still applies. For example, a primary-care provider who vaccinates a patient and then counsels that patient on drug addiction in the same visit would bill the addiction counseling and vaccine to the two separate payers.
Obviously, this behavioral health carve-out can make things complicated for both the provider and the patient. When patients and practices are uninformed about carve-outs, claims may be processed incorrectly. Behavioral health practices may face unpaid balances, creating additional work for staff and unfavorable financial reporting.
Patients who are billed for out-of-network services may not be able to pay the balance, and may struggle to complete their treatment. This increases costs for the provider, limits patient outcomes, and creates complications for both.
Prevent confusion caused by behavioral health carve-outs
Avoid these unfortunate surprises by verifying the patient’s behavioral health benefits and coverage from the very beginning. Collect all relevant insurance information the minute the patient contacts you about treatment, or at the very worst, at the time of patient registration or intake. Contact the insurer to confirm that they cover your services.
Behavioral health providers should also ensure that their billing and other administrative staff understand carve-outs and their ramifications.Take time to understand that insurance benefits may differ based on policy types, service codes, provider location and credentials, and inpatient vs. outpatient status.
This knowledge will enable billing staff to better explain the situation to patients who may be affected. Being upfront with patients about coverage and payments may make the provider more trustworthy in the patient’s eyes, a necessity in behavioral health.
How to deal with behavioral health carve-outs
Most behavioral health billing software requires users to create a manual process to track multiple insurance payers, their authorization codes, and which services rendered go to each payer. This can be a frustrating process that uses up valuable staff time.
Avea Solutions offers the only software that automates this process for billing insurance companies. AveaOffice is the first cloud-based comprehensive revenue cycle management platform designed specifically for behavioral health facilities and their billers.
Contact us today to learn more about how we can help you bill more accurately and get paid faster.