Why are more players coming to the behavioral health space and what do practitioners need to know?
While the current coronavirus pandemic is creating an increased need for behavioral health services for those in isolation, other trends in healthcare show an overall increased interest in the behavioral health space with more players entering the market, according to presenters from Hooper, Lundy & Bookman, PC during a Wolters Kluwer Legal and Regulatory webinar titled "Regulatory Pitfalls and Business Opportunities in Behavioral Health." Alicia Macklin, Senior Counsel, and Robert Miller, Senior Counsel, focused on trends, behavioral health transactions, due diligence and business best practices, while also discussing how the current coronavirus pandemic is impacting healthcare.
Trends. The trends include consolidation, data-driven transactions, transition to value-based care, and new opportunities in mental health services. In consolidation, providers are looking to inorganic growth opportunities, and payors are focused on continuing with vertical integration strategies. Large payers in the health care industry are merging with others and are better able to push for better deals with providers. "We are seeing a lot of providers asking how they can grow so that they can push back," Macklin said.
In data-driven transactions, providers are making strategic relationships with health care IT companies a priority so that those companies provide data analytic services. Using that data, providers are accelerating their shift to value-based care. Another trend is in the mental health space. For mental health, historically, fewer health services were covered, and costs were higher. Now that federal parity laws have been created, requiring equal coverage for behavioral and other health issues, there is a renewed focus.
The opioid crisis, and now the coronavirus crisis as well, have led to more access and support. For example, in 2018, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (P.L. 115-271) was enacted, and it included an anti kickback provision.
Growing transactions. In the behavioral health space, the players are growing and changing. The five main groups that are most interested are:
- Private equity
- Technology companies
- Health systems
- Medical groups
Traditionally, many of the groups have not been interested in the behavioral health field. Now, private equity firms are looking to get into the field where they could potentially profit. Entrepreneurs are coming into the behavioral health field with their extensive business background but lack regulatory knowledge. Technology companies have seen Google successfully come into the space through Verily (formerly Google Life Sciences), especially during the current coronavirus crisis, and want to join as well. The more traditional groups on the list, health systems and medical groups, are simply looking to grow their business.
Best practices. In dealing with the growing and changing nature of transactions, Macklin and Miller shared a number of best practices to keep in mind. First, ask for everything that the provider has as far as licensing and contracts. Also, the government agency where the license came from must be known. Remember too that key privacy issues are also unique for behavioral health providers, and states can enact stronger privacy laws above HIPPA prevention. In addition, ask if the companies, as a result of the transaction, will keep working the same way. If the transaction amounts to a change in ownership, a completely new application may be needed before closing the deal. And, very importantly, if there is a change in ownership, find out if there will be a change in Medicare or Medicaid payments.
"Ask how the business will carry out its mission post-closing. What is it about the integration plan that will allow the company to go forward? The transferability of contracts in the behavioral health space is critical. How will they be able to bill and see reimbursement before going forward?" Miller said.
Looking ahead. Telehealth is likely to continue and grow, with e-prescribing likely to expand. States are easing restrictions on e-prescribing, but odds are that visits will be required after an e-prescription. "Figuring out how to deliver behavioral health for people who cannot come in, there will be continued focus on this access," Macklin said.
Attorneys: Alicia Macklin and Robert Miller (Hooper, Lundy & Bookman PC).
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