The Practice of Therapy

Gordon Brewer: Well, hello everyone and welcome again to the podcast and I'm so glad to have back on the podcast Jeremy Zug.
And Jeremy and I reconnected this past year. And Jeremy is a, a good friend and he is one of my go-to experts on insurance. But Jeremy. Welcome to the show.
Jeremy Zug: Yeah, thanks Gordon. It's great to be here again and it's good to talk. Yes. How are you doing?
Gordon Brewer: I'm doing okay. Doing okay. So, yeah, so as I start with everyone, so the folks that might not know you tell folks a little bit about yourself and how you've landed where you've landed.
Jeremy Zug: Yeah, that's a great question. So I started my career in community mental health in 2009, and this will date me a little bit, but I was 14 responding to an ad for a job at our local community mental health center making paper charts and doing low-level admin work. Did that all through high school.
Then went to college, met my wife, did billing for a group practice in Chicago, in downtown Chicago. And then by the time we moved out of Chicago to come to Michigan, my colleagues from the community Mental Health Days reached out and they said, Hey, we're doing claims on. The floor of our office with a pen and paper, can you help us do billing?
And that was the genesis of Practice Solutions and that's how we got started. So Katherine and I have been doing that for the last eight years, helping independent private practices. I. Do the, we do the billing for them but also we do a lot of education around how, how to do best practices around insurance billing.
It's a really complicated issue. It's really complicated workflow, and we're happy to be here to help in any way that we can.
Gordon Brewer: Awesome. Yeah. And you know, it's I had Jeremy come and did, did a presentation for my mastermind group, the practice of the Therapy Collaborative. And it was a really fascinating session and just talking about some of the changes with insurance and billing and all of that kind of thing.
But, you know, one of the things, maybe Jeremy, that we can maybe start with is just I know there's there's always kind of a, there's always been a little bit, at least in my mind, a little bit of a bias to not do insurance in your practice. Just because quite frankly, it's. It's easier accounting wise and that sort of thing, but the downside of not taking insurance is that you have to work much harder to get clients.
Mm-hmm. And that sort of thing. But in your experience, you know what, what would be the advantages to accepting insurance in your practice?
Jeremy Zug: Yeah, that's a great question. The, the way that we think about this and the way that we've seen hundreds and hundreds of practices run things is that they, they look at two.
Factors when deciding to take insurance. And I'd be curious about your practice too, Gordon, but mm-hmm. I'd love to ask you about that. But one is, is the practice financially viable? Right? Are you able to work with a private payload and an insurance load that's able to drive the economic engine of the practice?
And then the second thing that. Private practice owners ask a lot is, am I meeting clinical objectives? Am I working with populations that I love working with? And those two don't have to be mutually exclusive. And so what we ha what we see the most often is there's private pay clients and then there's the insurance side of the, the practice.
But we're starting to see the a resurgence almost of private pay practices. Starting separate entities that are insurance-based so that they can cover the, the whole array of patients that they could see. And so we're seeing a, a big push that way for accessible mental health care. And so that's been really fun to, to watch and to be involved with.
Gordon Brewer: Right, right. Yeah. And I think, I think as much as anything, you really have to look at your demographics of where you're located. I know for me, and, and people have heard this where I'm located here in East Tennessee, we're a small metropolitan area, the Tri-Cities area, and, but we're surrounded by a large rural area.
That actually covers three states. I mean, we've got, we're up, we're Kentucky, Virginia. Mm-hmm. And North Carolina, actually four states, if you count 'em all. Yeah. Where we all kind of come together up there. And so we draw clients from all, all four of those states. And just the economics of the area with it being a low, lower socioeconomic area.
People are dependent on their insurance to pay for healthcare and their counseling services and that sort of thing, and I know when I. First started private practice. I really, that was a decision I kind of had a lot of consternation on because I knew, you know, I knew it would be easier to, to do private pay.
I mean, it's just, you know, take the money. And then filing insurance claims is a whole different other thing. And but it does, and you can speak to this. Jeremy, it does. You can have a very profitable practice accepting insurance. Mm-hmm.
Jeremy Zug: Yeah. And I think you hit on something that's really important there with what you just said.
So your practice draws on a hu all these different states, right? People coming in and, and one of the pieces of the puzzle for insurance reimbursement that's starting to, to come to light that billers have known for a while is each state has. Huge variability in terms of reimbursement rate, right? Mm-hmm.
You know, Tennessee's reimbursement rate, very different from Florida's, very different from West Virginia's and all of those are wildly different from the Western states, right? Mm-hmm. And so you look at those, and I think that's where some of the. Confusion and maybe the conflict comes from across the country now that all these private practices can talk across state lines and Facebook groups and like your mastermind group, for example, or the, the event that you and I connected at.
And you know, you talk about taking insurance with a private practice in Florida versus a private practice in Wyoming and they're gonna have very different financial realities of running their practice with insurance. So I think that's an important piece of this too, that if you're in a state that your reimbursement rates are really, really bad that's a consideration for sure.
Right. And then you pile on top of that, you know, if you have a payer, I. An insurance company who's onerous to deal with, and it makes it almost impossible to want to do that. So, Gordon, how did you decide which insurance companies to get in network with, since you felt like that was something you had to work in?
Yeah. How did you make that decision? Well,
Gordon Brewer: yeah, so initially I made some bad decisions and well, yeah, but I, I, you know I, I would say look at your top. In your area, who, which, which insurance company do the majority of people use? Mm-hmm. Are their, their employers use? 'cause usually it's a employer driven as far as what sort of health plan a person has and, I would start with those to begin with. And I think two, I don't think you need to get credentialed with everyone and everything. Agreed. And that's what for sure. And that was the mistake I made, is I tried to just, okay, I'm gonna try to be credentialed with everything that is walking and walking and breathing out there, you know, that sort of thing.
Mm-hmm. But I think it's you know, it's been. Smart of us to just actually fire some insurance companies get mm-hmm. You know, get off their panels just because one, they were hard to deal with or two for sure. Just the reimbursement rates just weren't, were not fair or in line with what we needed.
Mm-hmm. So, and yeah. So, yeah. I'd love to hear your thoughts on that. I mean, that's kind of the, yeah.
Jeremy Zug: Yeah, that, that's actually, you bring up a good point, and just as we're recording this, this week that we're recording this, Medicare Advantage announced that they had a 5% reimbursement rate increase, which is you look at that and you go, wow, that's a pretty significant increase for Medicare Advantage.
But I think you have to be really careful when you see. That kind of news, right? You have to balance that kind of news against why they're able to give an increase, right? Which is that there's been something of an exodus out of Medicare Advantage because it's been very, very difficult to work with. And so the reason why Medicare Advantage plans can offer an increase is not because out, it's not a benevolent government funding issue.
It's a, we have more capital because we have fewer providers in the network. As a result of all of them leaving. Mm-hmm. And so, or all of the ones that have left, not all of them leaving. And so, you know, you get a raise in that sense, but you also don't get a raise because of the work it takes to, to work with the insurance company.
And there's a map I'll send to you, Gordon after this, but it shows the. The biggest payer in every state, and I think a lot of private practice owners would be surprised to learn that Blue Cross Blue Shield does not have a corner on the market countrywide. I mean, there are a whole bunch of insurance companies that dominate in their state, in their respective states.
Mm-hmm. And I think reimbursement and size of the insurance company matter, but how difficult are they to work with, really? Right? Mm-hmm. And I think that's where you get to, we need to fire a few of these, so,
Gordon Brewer: yeah.
Jeremy Zug: Yeah. How is that talking to patients about firing an insurance? Plan and
Gordon Brewer: yeah. Handling that well.
It's you know, fortunately there's people like you that kind of help us with kind of making those decisions. Mm-hmm. And so I think as much as as much as anything, you know doing your due diligence and you, you can, again, you could speak to this mm-hmm. Yeah. On the front end. When you're doing the intake with people and making sure that you're doing a good job, explaining to them about number one, how insurance works and mm-hmm.
You know, things like meeting deductibles and the difference between a copay versus co-insurance and, and all of those kinds of things. And then. Those insurance companies that require pre-app approval, but I'm guessing that the, there's a lot of, a lot of those that it's less, less so now needing pre-approval for mental health care, particularly outpatient mental health care than it used to be.
Mm-hmm. Is that what you're finding as well? I mean, it's, yeah.
Jeremy Zug: Pre preapproval for insurance or for mental health? Services in an outpatient office setting has largely been a thing of the past ever since the Parity Act has been revised and revised. And I think the, the last administration did a good job of trying to limit the amount of shenanigans that insurance companies can use to limit mental health care.
So one of the technical terms you'll hear thrown around a lot. But has very little education around is something called a non quantitative treatment limitation. Mm-hmm. So for example, right, if you are in network with, let's just throw out a name like Centene for example, or Optum or United. And let's say that you go 20 sessions and then all of a sudden the reimbursement stops coming in and you start getting letters about, is this medically necessary?
That's an example of a non-quantitative treatment limitation that is technically not legal with the legislation that has been put forward. Mm-hmm. And, and enacted by our government. And so that's a good example of the kind of shenanigans that push mental health providers out of networks for sure.
And I think mm-hmm. There's a lot of education to be had around how insurance works for clients, but when you start to look at things like. Denial rate. Right? In Michigan, there's a certain payer, I won't mention their name, but they, they deny 35% of their claims. And you look at that and you go, well, all right.
That's more than one out of every three claims I'm gonna send. Then it's gonna cost my practice. This is actually the number, it's 25 to $30 in practice expense to rework a denial, you know? Mm-hmm. And it's like, if I'm gonna spend $30 out of every one, out of every three claims I send, why? Why would I be in network with you?
Mm-hmm. And that's, that's a really important. Consideration. Right,
right.
Jeremy Zug: And, and you can look at all the other shenanigans that you have to go through, but have you run into a lot of that in your practice? Just like letters? We're not looking for this. We're starting. Well,
Gordon Brewer: yeah, we're starting to run into more of that.
Mm-hmm. And I know that was something you spoke, spoke to with our mastermind group, was just, you know, how do you handle chargebacks? That's one of the things that we've run into as well, is particularly if somebody has like co-insurance or not co-insurance, but secondary. Secondary insurance.
Yeah, that's right. That's right. Yeah. So like and that's that's, you know, really you see that a lot with maybe people who have both Medicare and Medicaid. We, we see that a lot where, you know, one, one won't pay until the other one denies it. Kinda thing.
That's right. Right. Yeah.
Gordon Brewer: Right. And so then there's the standoff between the two insurance companies about who's gonna pay this claim.
Jeremy Zug: Yeah, that's right. And, and,
Gordon Brewer: and that, that sort of thing. So what, what strategies would you say people should use and cases like that?
Jeremy Zug: Okay, so chargebacks have really made a, a comeback, right? Mm-hmm. If we can, maybe a little tongue and cheeky, but. Chargebacks are a useful mechanism for clients in some cases.
Right. And I think this, this is important to frame out because chargebacks is not just like a, across the board, evil. There are times that you have a client who does have a secondary insurance company that should be primary. Right. And there's been a mistake somewhere at the patient registration level.
Mm-hmm. So if you get a chargeback, one of the. First actions to take is to go to your client and say, clarify for me again, which insurance is primary and which one is secondary. Because it very well could be that they have their insurance mixed up, right? You have a, let's say you have a minor and each parent, the, the minor is on both insurance plans, right?
And they get those mixed up and we'll just throw yours as the primary and yours is the secondary. And then you build those and it's wrong and there's a chargeback, right? So in some sense, that can be a helpful mechanism. Where you get into a lot of shenanigans is like what you're talking about. So couple of strategies I would recommend one, just make sure that your patient education is clear in your registration process, that you are double checking the eligibility and benefits of anybody with more than one insurance.
Plan. Right. And there are people with three insurance plans. I know it sounds outrageous, but that that does happen. And so mm-hmm. Making sure you have the order correct in terms of. Who, who you're gonna submit a claim to first is very important. And then the second thing is to commit a certain amount of time.
Leave some amount of margin in your week, whether it's your administrative team or you, whoever's doing the billing, leave some margin in your week to be able to fight this stuff, right? We know, and the insurance companies know this too, but only 1% of all denials ever get appealed. Which means that companies like eor, I don't mind calling them out 'cause I think it's total shenanigans.
But when you, when you look at companies that wholesale deny claims, because they know that you won't be able to chase all the denials and you'll only appeal 1%, you start to think through the math of that a little bit. Right. And so leaving space in your schedule to do that, it's unfortunate, but it is one of the things that you have to plan for.
I think so.
Mm-hmm.
Jeremy Zug: Yeah. How have you navigated the, the time requirement to rework some of those things for Yeah,
Gordon Brewer: so that this is a good I see what you're doing there. 'cause this brings us back around to practice solutions. So one the things that, yeah. 1, 1, 1 of, one of the things Jeremy, I think is that you have.
To really look at your time. I'm in my practice we do have a an intake coordinator and she handles, handles all handles all the intakes and making sure that we've got everything for the insurance and all those things that you're talking about. And but if you're, you know, if you're in a practice and particularly practice owners, if you're spending a lot of time chasing claims mm-hmm.
Your time is gonna be much better spent. Outsourcing that to, you know, like practice solutions. Mm-hmm. So people like Jeremy, that that's all they do because they know it better and you don't have to chase it all down like that. And so, mm-hmm. Yeah. So it might, yeah, I, I think that's I know knowing Jeremy and what the Practice Solutions does, how is, you know.
People think about, okay, well that's more money I'm gonna have to pay out. But when you look at the return on the investment of that, the math works.
Jeremy Zug: It depends on how the practice owner is gonna use that time though, right? Mm-hmm. So, and I wanna talk a little bit about that because outsourcing is a lever that the practice owner has.
That they can pull if it makes sense, right? Mm-hmm. So we, we deal with practice owners, like we build out billing departments for organizations too, right? So if, mm-hmm. At a certain size, it makes a lot of sense to go in-house, right? You have a full-time person, you can train them, develop your internal SOPs, and you can really run a billing department at a, at a certain size of private practice for way cheaper than you can outsource it.
That's a mm-hmm. That's an economic reality of running a mm-hmm. Private practice. And as you grow Right, you wanna do that. Mm-hmm. And we see it as a raging success when a practice that we've been working with, with a long, for a long time gets to that point because we know they're gonna be able to do, carry out their mission much better with an internal person full-time.
Mm-hmm.
Jeremy Zug: Where you get into trouble. And I was just talking to a, a lovely practice owner this week. Who, you know, busy, busy practice owner has a caseload, has clinicians and is doing the billing. I think that's when you start to say, okay, what does outsourcing start to make sense? 'cause you look at five sessions, let's say five sessions a week, right?
Is what you're spending on billing. Those five sessions are way more valuable than an outsourced vendor. And, and also you can save yourself some stress as well. Right. There's an intangible there. So it depends on where you are in your practice growth journey. Right? Yeah. And it makes sense to DIY and then it makes sense to outsource and then it makes sense to insource in a lot of ways.
Mm-hmm. So that's usually the kind of the growth path that we see. And, and you wanna see out of a private practice.
Gordon Brewer: What in your experience, Jeremy? What size practice would really wanna start looking at maybe hiring an in-house billing person.
Jeremy Zug: You wanna start looking and you wanna start thinking about this process as you approach around $800,000 in annual revenue.
Just top line gross revenue. And the reason you wanna start there is if you've gotten to that 0.1, congratulations. That's amazing. Mm-hmm. And two, you are, have. You have everything worked out from a systems perspective, like you're able to grow this thing mm-hmm. In a, in a substantial way. And what we see from our metrics is that without any additional effort put in on the part of the practice owner, you'll see 11% year over year growth on a well established practice.
Right. This is a practice that has. Good, good clinicians, low attrition, good marketing. They've gotten everything figured out, right? And so we've been able to track their growth because we get to see it. And it's like 11% year over year is usually what you can come to expect. But at 800,000 or seven 50, you start to say, in the next six months, we're gonna need somebody.
And that's usually how long it takes to build out a billing department, right? Mm-hmm. Because you need to take in a bunch of new workflow that you're not used to, and that's gonna take some runway, right? Mm-hmm. If you show up at if one day you wake up and your practice is big and. You flip over your profit and loss statement right now during tax season, right?
Mm-hmm. And you're like, oh man, this is a huge budget line. It's a little too late if you want to cut that out, right? Right. Now, some practices at that size are bigger. They go. We don't wanna deal with the HR burden, which makes sense. We don't wanna deal with turnover or whatever. Mm-hmm. Makes sense. Mm-hmm.
But most practices that starts to make sense around, around that size and scale. Right. Have, have you seen something similar from your experience? Yeah.
Gordon Brewer: Yeah. I think that that, that sounds, that sounds about right. Yeah. And I think that's again, kind of my mantra that people have heard from me over and over again over the years is the importance of knowing your numbers and understanding your numbers.
You know, as far as I was, had a consulting call before we got to recording here with a. With a clinician, and one of the things is just understanding, particularly if an insurance based business, just the basics of like, what is your average reimbursement rate across the board. You know, so, so you, you, you know, not only not only are average per session rate not only from.
What you get from insurance, but also for any private pay clients you might have. And that sort of Yeah, that's right. So all of that, you've gotta, and that, that figures into, you know, what you're gonna pay your people if you're a group practice and you know where you're gonna put put things. So I think you've gotta really look at that.
But I think you're, I think you're right when a, the gross income of a practice starts approaching that upper end of the. Six digits.
Jeremy Zug: Yeah, you really start looking
Gordon Brewer: uhhuh.
Jeremy Zug: Yeah. So no, and I think, I think the biggest, and I think you have done an amazing job in the marketplace with helping clinicians develop their money mindset in a lot of ways, I think it's been one of the biggest changes we've seen over the last decade of doing this stuff that when we started.
The education and the mentorship around that particular issue. This is an, this is an area of, it's not my expertise. This is yours really. But there were a lot more questions and a lot more stress around knowing your numbers and knowing the money, and that has largely gone away. So I think that's a problem that.
Has largely become extinct, I think in large part to what you're doing. So I, I appreciate that. 'cause we used to have a lot more conversations around that topic that we weren't really qualified or it's not our expertise. Right. So it's been great to watch that macro shift. Mm-hmm. Sure. And I really appreciate it.
For sure. Yeah. Well, good,
Gordon Brewer: good. Yeah. Well I've gotta be aware of our time Jeremy. Sure. Tell folks that would maybe want to get in touch with you and work with Practice Solutions, kind of a little bit about your process and also I know we've got some resources for people to check out and a landing page and we will talk about that here in a minute.
But if somebody wanted to work with you all, what's kinda your process for that happening?
Jeremy Zug: Yeah, it's, it's a good question 'cause we don't work with everybody that calls us, so we wanna make sure that we're a good fit for the practices that call us. If you go to our website, practice Soul practice, SO l.com there'll, there'll be a contact form there which will connect you to a human being.
Or if you call us, you'll, you'll get a human being on the phone. And what we do is we have. FA list of questions that we will ask you about your practice, and if we think it makes sense and adds value to your life, then then that would be somebody that we'd wanna work with. But we often, we often recommend a whole host of strategies to the practices that call us, because what we don't wanna do is just.
Get a client for client's sake. We don't wanna work with a practice just 'cause they're available. That's oftentimes not the right move. The right move is for us to say, what is the best thing in our experience for your practice. So we can do billing for practices. And we do a lot of that. We also, like I said, we, we conduct practice health checks.
So if you needed a, a discovery audit, let's say you're scratching your head on. I think I should be making more, but I'm not sure where the problem is, but I don't really have the time to look. We can do a, a two to three day practice health check where we audit your billing department. That's been really fun.
We've really enjoyed that, that service. And then if you wanted a billing department built out we're, we're also able to do that. We have a team dedicated for that service as well, so we can run the gamut of. What stage of practice you're in and we can, we'll always advise you on what we've seen, work out the best.
So if, if, if nothing else you just needed a, an advisor, we're happy to talk for sure.
Gordon Brewer: Alright. Right. And, tell, tell folks too, you've written a book on insurance billing that covers some of the basics and that sort of thing. Yeah,
Jeremy Zug: yeah, yeah. So the book is insurance billing basics steps for therapists to successfully take Insurance.
We get a lot of the same questions around, Hey, what is, what is a copay or. Should I credential? This is a really common one, right? Should I credential with every insurance company in my area? And in the book, we give you very practical, very consumable content around how to think through a. Taking insurance.
It's, it's really our worldview for how to approach an insurance-based practice from what we've been able to glean over the years of working with private practices across the country and in different stages. And, and I think it is a, a really tight, concise worldview around how to think through insurance and so, mm-hmm.
That's why we wrote the book, because we found that there's a need there and we wanted to. Produce a piece of content that. Because billing Gordon is not, it's not a page turner, right? Like there's never gonna be like, yeah, like New York Times bestselling billing book, right? Uhhuh. But what we wanted to do is take a chip off the block around educating and, and demystifying this process.
Especially since we love independent private practices, we wanna see more of them. And so if we can shorten the distance between. Big question marks around insurance and a well developed strategy and action around insurance. That's really helpful. I. So that was the idea.
Gordon Brewer: Mm-hmm. Yeah. Yeah. And so if you'll go to I'll mention here, we set up a pretty link.
Go to practice of therapy.com/practice solutions and you can find the book. There. And also more information about working with Jeremy, and we'll have that link here in the show notes, in the show summary. Mm-hmm. The other thing, I know, Jeremy, you're in the process of starting a podcast, and so Yeah, that's right.
Yeah, yeah, yeah. It's a, it's
Jeremy Zug: a long road as you know. Any tips, Gordon, from, for those of us on the front end of this? Oh yeah.
Gordon Brewer: That's a whole conversation in and of itself, but yeah. So, yeah, so you know, to be mindful of our time. Jeremy, any quick parting thoughts?
Jeremy Zug: Well, one thank you for all your work, Gordon, in the private practice space, and thank you for the content you put out.
So that's, that's one parting thought. The second parting thought is that we need more private practices. The mar and what I, what I mean by we is the industry, the country, you know, it's a really turbulent time. There's a lot of volatility, as you know, at the time we're recording this. It's been a really volatile week actually.
Mm-hmm. Mm-hmm. And I think we need, we need more therapists that provide accessible care across the country. It's needed. And so don't, don't quit. Keep going. And we, we really appreciate everything that private practices are doing for the country. Yeah.
Gordon Brewer: Oh, they're very kind. Well. Jeremy, it's so good to have you back on the podcast and and I'm sure folks you're gonna be hearing more from Jeremy yeah, as as we move, move through this journey.
So, but be sure to check out the webpage, his landing page. You can go to practicesol.com/pot, or. If you wanna do it in reverse, you can go to practicesol.com/pot and that'll get you the same landing page. So either way I'll get you there and there'll be links here again.
And so, well Jeremy, thanks and give my best to your wife, Catherine.