Urine Test Reimbursement Shift Hits South Florida Hard

Addiction Treatment Industry Newswire
05/07/2013 -ATIN – Health insurers are moving aggressively to change the way they reimburse in South Florida for urine testing, a move that could have broad and potentially devastating consequences for some treatment players and especially sober living operations in the nation’s largest “destination” addiction treatment drug rehab alcohol rehab marketplace, where many addiction industry participants have become increasingly reliant on generous testing reimbursements to keep their operations afloat as the financial crisis deepened and even now as the region is experiencing a strong general economic recovery.

Piss Boom Ends

Sources, all of whom wished to remain anonymous given the key and extremely sensitive nature of payor relationships, tell Treatment Magazine that the heyday of generous and easy urine testing reimbursement are over as health insurers add requirements for state licensing, while changing the reimbursement codes to reflect many added, and expensive, technical requirements. This is nothing new in the medical reimbursement arena, where medical entrepreneurs – and especially among treatment entrepreneurs in the relatively tough addictions payor environment – are engaged in an endless and ever shifting game of cat-and-mouse with health insurers to pull maxim dollars out of aggressive interpretation of payor codes, matching wits with health insurers as they seek to close all-to-often what are overly aggressive and even fraudulent billing practices.

Insurers Aware

“The health insurers knew what they were doing when they made the urine testing so lucrative,” says a major 60-bed sober living operator who insisted on remaining anonymous, adding that his operation is already being impacted significantly as reimbursement rates on average seem to have been cut in half. “They saw it as a way to reimburse for some aftercare and provide some monitoring services to help avoid the endless and even more expensive treatment revolving door. By very quietly changing the codes and requirements for urine testing, they will now be seeking to weed out the marginal players and excessive billers. There are likely to be some audits and demands for repayment by the insurers.”

Cat-and-Mouse Game

As is typical with many efforts to boost regulation requirements, the big winners with the changes will be the well capitalized and entrenched testing industry players, which already easily meet the new and expensive licensing and technical requirements, which would cost hundreds of thousands and much effort to acquire from scratch. The losers will be the marginal treatment and sober living operators who have become totally reliant on extremely generous and easy to file urine testing in the region, which often reached as much as $1,200 a test recently.  Sources tell Treatment Magazine that the top urine reimbursements are falling fast, perhaps reaching to as much as half the former top rates with averages rates obviously being quite a bit lower even.

“You can expect that we are going to see some people going out of business because of the urine testing changes,” said one treatment CEO.

California Deja Vu

South Florida is now experiencing what Southern California’s treatment and sober living industries, a market much larger than South Florida’s at the high end, went thru before in a similar urine testing reimbursement boom. In a sign possibly of things to come for South Florida, urine testing reimbursements are now often less than $50 in the California marketplace.