Owning a Drug Rehab: The Business Side

Owners are often not shown the appreciation they deserve for owning a drug rehab. These individuals are at the frontline of the opioid epidemic. They have dedicated their lives to saving lives and helping others achieve long-term sobriety. The general public does not realize how difficult it is to own and operate a drug and alcohol addiction treatment center.

Complex Process of Starting a Drug Rehab

Most substance abuse rehabilitation center owners and operators are in recovery themselves. They know firsthand how drug and alcohol addiction can destroy lives. Many strive to help as many people as possible, and this is not an easy task. As an owner of a substance abuse disorder treatment rehabilitation facility, many things must be taken care of daily and monthly to keep the doors open. There are very high costs associated with owning and operating a drug rehab. If these individuals cannot pay their monthly bills to keep the doors open, they cannot continue to help individuals into long-term recovery.

Starting an addiction treatment center is challenging, especially managing the licenses required by the state and local governing bodies such as the Department of Children and Families (DCF). Also, local zoning ordinances are necessary for the city’s approval. The cost of attorneys is required in every aspect of owning and operating a drug rehab.

Owning a Drug Rehab Requires Licensing and Accreditation

Many drug and alcohol addiction treatment centers are Joint Commission accredited, and this is a costly accreditation; however, it demonstrates that they adhere to the strictest standards. Therefore, many of the treatment centers get this certification. To receive this certification, many treatment centers hire outside consultants and spend large sums of money. Proper documentation and having a “policies and procedure manual” detailing all internal processes at a drug rehab facility is a requirement. These are typically lengthy manuals that require an educated and experienced individual to construct.

In addition, there is a business plan that business owners must put together which outlines all the requirements for a business to stay operational. In combination with this, individuals will need a Pro Forma which outlines all the costs associated with operating the business. On a monthly or yearly basis, a projection of earnings of up to five years is required.

To compile a Pro Forma, you must know how much the insurance companies pay for each care level. This information is generally available from a medical billing company based on an accumulation of data from a specific geographical area. The medical billing company will have information on how much the insurance companies are paying for all the different types of payers.

Drug Rehab Marketing

Even with the medical component in place and the location up and approved, there is still the most challenging obstacle owners face daily. They need clients to be able to pay their bills and keep the doors open. This is one of the most challenging aspects of owning and operating a drug and alcohol addiction treatment center.

The competition is highly competitive. A handful of big players spend in excess of $500,000 a month in marketing to generate clients. This makes it extremely difficult for small and medium size substance abuse rehabilitation providers to survive. What are their options to generate clients?

The are only a few different ways for drug rehabs to generate clients. A thriving addiction treatment center will use a combination of these to sustain itself.

Google Ad Words and PPC
Drug rehab SEO (ranking organically on page one of Google for keywords)
Google Maps 3 pack – Ranking in the top 3 Google Maps (This is one of the best ways for small centers to beat the big ones.
“Boots on the Ground” – Referrals from other centers, private clinicians, the courts, hospitals, and more.

As you can see above, generating leads and new clients is difficult. Each one of the above requires financial investment and time. Even with all this in place and working correctly, there are still a few areas of concern left: admissions process and medical billing. We will cover both of these critical areas.

Admissions: Where Countless Dollars Are Lost Every Year – Get It Back with instantvob®

Admissions are one of the areas that drug rehab owners must pay careful attention to every day. Drug rehabs allocate a tremendous amount of time, money, and energy to generate leads. A lead usually costs about $4,000, so rehab owners must capitalize on every phone call generated.

People are not looking for help only during business hours. A call for help can come, and usually does, on nights and weekends. Many drug and alcohol addiction treatment centers could not verify health insurance benefits then. The only thing they know for sure is the potential patient’s insurance.

We recommend the instantvob® health insurance verification app for all drug and alcohol addiction treatment centers. This app will help save lives and help drug rehabs generate more admissions. The key factors needed to make the best decision possible by the admission staff have been outlined below. Learn more about why centers need to verify health insurance benefits here.

Insurance type
What is the deductible amount?
How much of the deductible is met?
What is the maximum out-of-pocket expense?
Is there any co-insurance?
Are there any co-pay factors?

These answers eliminate the risk of the addiction treatment center admitting this patient and also allow the admissions professionals to keep the individual seeking help on the line while they check this critical information. The process only takes about 10 seconds to get up-to-date and correct answers. If they find out they cannot help the patient due to financial concerns, they can advise them on other ways to obtain help with their current insurance benefit coverage. They could even have a conference call with the best potential addiction treatment center that offers coverage based on the patient’s insurance policy. This enables those with limited insurance benefit coverage to obtain their needed help.

Medical Billing Concerns – Providers Are Leaving over 20% on the Table!

Medical billing procedure improvements are one of the least scrutinized areas of operating a drug and alcohol addiction treatment center. Specifically smaller centers and some medium-sized facilities think they’re saving by doing their medical billing in-house, however, these facilities are losing and writing off more than 20% of their annual billing.

Hiring a well-staffed, experienced medical billing company in the substance abuse industry is a wise choice. They have the experience and human resources to negotiate with insurance companies. The insurance companies often stall and audit to delay payment long enough for the addiction treatment centers to write it off. Additionally, experienced medical billing company will also know the best ways to process claims and services, which is why we always recommend addiction treatment centers have a medical billing company audit their receivables every year. This evaluation could recoup countless dollars left on the table.

We Help Drug Rehab Owners Everyday

If you are in the business of owning a drug rehab facility, we can help you in two key areas; generate more admissions with our instantvob® software and get advice on your revenue cycle management processes. On average, our clients get over 20% more reimbursements from overdue receivables and claims that untrained medical billers may have submitted incorrectly.

We appreciate drug and alcohol addiction treatment centers for what they do every day. They are saving lives and making a difference at this difficult time. The next time you think the owners of addiction treatment centers have an easy job, think about some of the things we covered in the article. There are many more reasons to admire substance use disorder treatment facility owners. We can only cover a little in a blog article.

We know running a drug and alcohol addiction treatment center is difficult. There are many different things owners must take care of every day. Call us at 561-530-5755, and let us help you save and generate more revenue.