When it comes to behavioral health, one of the most misunderstood areas in the revenue cycle is contracting. I’ve seen countless facilities run into unnecessary delays, lost revenue, and even patient access issues—all because they didn’t know they needed more than one commercial contract or how their services are defined differently by payers.

Let’s break this down.

The Unique Complexity of Behavioral Health Services

Behavioral health is unlike traditional medical care. While we often reference “inpatient” levels like detox or residential treatment, these services are frequently provided outside of hospitals—in 24/7 community-based settings. This misalignment in terminology causes confusion when negotiating with commercial payers and even when setting up contracts with Medicaid or Medicare.

A detox or residential program may sound inpatient in intensity—but if it’s not hospital-based, many payers will place it under facility-level community mental health care, not inpatient hospitalization. That difference matters.

Why One Contract Isn’t Enough

Most commercial payers require two distinct contracts for behavioral health:

1. Facility Contract: Covers services like:
• Residential Treatment
• Detox
• Partial Hospitalization Program (PHP)
• Intensive Outpatient Program (IOP)

1. Professional Contract: Covers the clinicians providing:
• Medication Management
• Diagnostic Assessments
• Psychotherapy
• Psychological/Neuropsychological Testing
  (which brings added layers of billing and scope-of-practice complexity)

If your organization delivers services across both facility and professional levels of care, you will not be fully reimbursed unless both contracts (or the appropriate rider on your professional contract allowing facility level care) are in place and properly linked to your billing structure.

Medicare, Medicaid, and OTPs Add Even More Layers

Contracting isn't just about commercial payers. Facilities must also align with government payers—each with its own enrollment and billing rules:

• Medicare Part B: For providers delivering psychotherapy, med management, and assessments
• Medicare facility level enrollment: Required for programs like IOP and PHP
• Medicaid: Often involves both state enrollment and contracts with managed care plans

If you're an OTP (Opioid Treatment Program) you’ll face even more requirements. Medicare requires OTP-specific certification and billing protocols. State Medicaid plans may require bundled payment models, service frequency rules, and specialized taxonomy setup.

These layers aren’t just red tape; they directly impact whether your claims get paid or denied.

Where We Come In

We’ve worked with countless behavioral health organizations that thought their credentialing or contracting was complete—until denials and inconsistent reimbursement started to pile up. That’s where our expertise comes in.

We help:

• Identify gaps between service delivery and payer setup
• Validate whether your contracts match your programs and scope
• Uncover why specific services aren’t being reimbursed even when documentation and billing seem correct on the surface

Getting paid starts with getting your contracts right. Don’t wait until the claims backlog reveals the problem.

Let’s review your setup and make sure your contracting decisions are supporting—not sabotaging—your reimbursement.
Understanding the rules is step one. We’ll help you connect the dots.