An Intensive Outpatient Program can be fully operational, properly authorized, and billing claims correctly—and still be underpaid.

For many behavioral health organizations, the problem isn’t the revenue cycle.

When this happens, the first assumption is often that there is a problem within the revenue cycle.

Claims are reviewed. Billing workflows are examined. Coding is audited.  Authorizations are verified.

But sometimes the issue has nothing to do with billing.

It starts with the contract.

Many commercial payers require specific contractual arrangements for Intensive Outpatient Programs. In some cases, a separate facility agreement, institutional agreement, or service-specific contract is necessary before reimbursement can accurately reflect the level of care being delivered.

These arrangements frequently require facility-based billing using the UB-04 claim form and applicable revenue codes rather than traditional professional claim submission processes. Without the appropriate contractual structure in place, organizations may find that reimbursement does not align with the services being provided.

As a result, organizations may be providing IOP services while being reimbursed at rates that do not support the program’s operational requirements.

Signs You May Have a Contracting Issue

  • IOP claims are being processed, but reimbursement appears lower than expected.
  • Authorizations are being approved, yet payment does not reflect the intensity of services provided.
  • Billing reviews have identified no significant coding or claim submission concerns.
  • Staff members are uncertain whether IOP services are specifically included within existing payer agreements.

Questions to Ask

  • Are all levels of care reflected in your current payer contracts?
  • Have payer requirements changed since the program was originally implemented?
  • Does the organization have the appropriate facility or institutional agreements in place?
  • Have reimbursement methodologies been reviewed against current contract language?

The Bottom Line

Not every reimbursement challenge originates in the billing department.

Sometimes the claims are being submitted correctly.

Sometimes the authorizations are in place.

Sometimes the program itself is operating exactly as intended.

The issue is that the contract was never structured to support the service being delivered.

A periodic review of payer agreements can help organizations identify gaps before they become significant revenue concerns.

If your organization has questions about whether your contracts align with your current services, a contract assessment may provide valuable insight into potential reimbursement opportunities and operational risks.

At G&M Consulting, we have more than 34 years of experience supporting behavioral health organizations with facility contracting, payer relations, and reimbursement strategy.

We’ve seen firsthand how contract structure can directly impact financial performance, operational sustainability, and long-term growth.

If your organization is evaluating its contracts, expanding services, or experiencing reimbursement challenges, we would welcome the opportunity to help identify potential gaps and opportunities.

Please contact us if we can be of assistance.