Top 5 RCM challenges facing substance use recovery organizations (& how to overcome them)

The behavioral health field is experiencing remarkable growth, but growth often comes with growing pains. For recovery organizations, the challenges of revenue cycle management (RCM) have only become more pressing. Increased competition, shifts in billing regulations, and the evolving push toward value-based care all demand that organizations optimize their RCM strategies.

Good RCM is more than just a way to “keep the lights on.” It’s the backbone of your organization’s ability to grow, retain top talent, and provide high-quality care. If you’ve struggled with any part of the billing process, you’re not alone. Here, we explore the top RCM challenges faced by substance use recovery organizations and share solutions to help you turn these obstacles into opportunities.

1. Denied claims

Denied claims are a recurring pain point for many behavioral health organizations. Whether caused by coding errors, missing documentation, or outdated insurance data, denied claims can cause major headaches for teams. They delay payments, increase administrative workloads, and eat away at your revenue. For larger organizations handling thousands of claims a month, even a small error rate can have a big financial impact.

How to overcome it:

• Take full advantage of your EHR’s integrations. Many EHR platforms integrate with advanced tools like clearinghouses. If you haven’t explored what clearinghouses can do, it’s worth your time. For one, they offer real-time benefits checks (RTBC), which allow your team to verify client insurance details within a couple of clicks. This alone prevents many common errors, such as submitting claims with outdated or incomplete coverage information. Clearinghouses can also help clean up claims before submission, flagging missing data or code concerns so issues are caught early.
• Track denial patterns and adjust workflows. Look closely at why claims are being denied. Most EHRs allow you to run detailed reports that break this data down for you. For example, you might notice high denial rates tied to a certain payor’s pre-authorization requirements. Once identified, you can create workflows that address these issues head-on—like flagging those payors for pre-checks or implementing specific documentation checklists. Dedicate time to weekly or monthly audits on denied claims to surface these trends early.
• Build a specialized billing team. Multitasking is the enemy of accuracy, especially when it comes to billing. Consider assigning staff to specific roles, like these:
  • Coders who focus on ensuring compliance with coding rules and guidelines.
  • Claims submission specialists who ensure claims go out error-free.
  • Review and denial specialists who analyze denied claims and oversee follow-ups.

Make sure staff stay updated on regulations and payor rules, especially as they evolve. Some reliable sources for industry updates include the Centers for Medicare & Medicaid Services (CMS) website, the American Medical Association (AMA), and of course, the Therapy Brands blog. 

2. Collecting client payments

Higher copays and deductibles are shifting more responsibility onto clients, which has made collecting payments an even bigger challenge than before. Many clients are struggling to cover costs, putting organizations like yours in a difficult position—finding the balance between showing compassion and recouping funds that are critical to your financial stability.

How to overcome it:

• Start the conversation early. Transparency is a must when it comes to payment expectations. Using tools like real-time benefits check, your team can verify a client’s insurance benefits and deductible details at the time of intake. This lets you provide upfront cost information, so clients aren’t blindsided later on. A client portal connected to your EHR is another tool that can simplify this process, allowing you to display real-time balances and payment options in one place.
• Provide flexible, client-friendly payment options. Allowing clients to pay their balances online is convenient for everyone and often increases collections. However, if you already offer this option, consider expanding to newer methods gaining traction in the market. Mobile wallet payments like, Apple Pay or Google Pay, are increasingly popular and convenient for clients juggling busy schedules. You might also explore solutions that allow clients to set up auto-pay or extended installment plans.
• Keep a close eye on accounts receivable. Establish benchmarks for acceptable days in accounts receivable (A/R)—say, under 30 days for most insurance claims—and monitor them actively. Your EHR likely has a dashboard feature where your billing team can track outstanding balances and follow up systematically. Set penalties for balances nearing 90 days due to avoid letting them slip into collections.

3. Prior authorization management

Navigating prior authorization requirements is one of the most frustrating processes of RCM. To make matters worse, organizations like yours face unique hurdles, as payors often require detailed justification for treatments like residential care, medication-assisted treatment (MAT), or extended therapy sessions. 

Delayed authorizations can hold up care delivery, damage relationships with clients, and disrupt cash flow. And the pressure to stay ahead of these requirements is only growing, with insurers tightening their utilization management practices.

How to overcome it:

• Focus on proactive authorizations. Rather than waiting until treatment is about to begin, train your team to initiate prior authorization requests as early as the intake stage. Flag clients requiring authorization during the pre-admission phase and assign team members to handle these cases immediately.
• Streamline workflows for efficiency. Develop a checklist and standardized process for common services that require authorization—such as detox or long-term care. Each service should have a clearly defined set of documentation requirements to avoid missing critical information during submission. Your workflows should also include regular follow-ups on pending authorizations, ensuring no cases fall through the cracks. As mentioned earlier, your EHR can integrate with tools like clearinghouses, that simplify some of these processes. With features like built-in tracking, staff can monitor the status of requests in real-time and receive notifications for necessary follow-ups. 

4. Administrative overload

From submitting claims to meeting compliance standards tied to state, federal, and payor rules, it often feels like your staff has more on their plates than they can handle. This can lead to burnout and less time spent on tasks that truly matter, like client care.

How to overcome it:

• Outsource specific billing tasks. Outsourcing doesn’t mean you’re giving up control; it often means you’re protecting your team’s time for higher-priority work. For example, outsourcing RCM functions like payment posting or denial management can reduce bottlenecks and keep the workload manageable for staff. Look for partners who specialize in behavioral health billing and have a record of success. The right RCM vendor can act as an extension of your team rather than an external entity.
• Automate what you can. Your EHR likely has built-in automation capabilities for routine tasks like appointment reminders, claims submissions, and data syncing. By eliminating the manual components of day-to-day workflows, your staff can focus on higher-priority responsibilities, like client engagement and care coordination.

Does your EHR measure up? Procentive’s behavioral health EHR is designed to manage the billing complexities of larger organizations – including intuitive automations, advanced add-ons, and tailored workflow configurations. If your current platform isn’t satisfying your growing needs, connect with one of our experts to see the difference our tools could make.

5. Managing payor complexity

For many larger organizations, managing multiple payors introduces a level of complexity that’s hard to ignore. Each payor comes with unique fee schedules, submission requirements, and timelines. This disjointed system can create inconsistent cash flow and add more work for your staff.

How to overcome it:

• Keep all payor details organized and accessible. Payor contracts, fee schedules, and submission rules should be stored electronically and easy to access. Whether it’s inside your EHR or another centralized system, keeping these details in one place avoids guesswork during claim submissions or follow-ups.
• Prioritize problem-solving with data analytics. Use analytics to reveal which payors have the slowest payment timelines or highest denial rates. With this data, you can address specific challenges—whether it’s negotiating better terms on underperforming contracts or adapting workflows for specific payors. 

Bonus: finding new revenue opportunities

Every behavioral health organization encounters its own unique challenges. However, staying in reactive mode doesn’t have to be the norm. Instead, by focusing on both revenue growth and improved billing operations, you can safeguard your organization against unexpected cash flow disruptions. And this doesn’t have to be a huge undertaking.  By working smarter, not harder, you can uncover untapped revenue potential.

• Leverage EHR add-ons for growth. Your EHR isn’t just for record-keeping—it can also unlock new revenue opportunities. Add-ons like business intelligence (BI) tools offer advanced analytics to identify high-revenue service areas, staffing inefficiencies, and client trends. With these insights, you can refine strategies like optimizing provider schedules or focusing on profitable services to boost financial performance – transforming raw data into actionable growth strategies.
• Explore new services. Expand your offerings with revenue-generating options such as telehealth, which lets you reach more clients using existing staff and resources. Other opportunities include introducing group therapy sessions or self-pay programs—both of which align with behavioral health trends and meet evolving client needs.

Outsourcing – a solution to behavioral health billing challenges 

Your team is your strongest asset, but even the best can struggle when stretched too thin by administrative complexity. With Procentive by Ensora Health, you gain access to a specialized RCM team that handles your billing challenges for you – efficiently and effectively. From reducing denied claims to cleaning up your A/R, our experts work as an extension of your organization to ensure financial stability and operational success. Learn more by scheduling a demo with one of our experts today.