Adapting to Daily Authorization Requirements in Behavioral Health

The behavioral health sector is experiencing another significant shift in authorization requirements.

This latest change demonstrates how Partial Hospitalization Programs (PHP) and Intensive Outpatient Programs (IOP) are to be processed.

This trend involves moving from a weekly to daily hours calculation for authorizations.

As a result, a strategic response from providers is needed to maintain compliance and operational efficiency.

The Move From Weekly to Daily Hours

Traditionally, PHP and IOP services were authorized based on the weekly hours required.

However, we’re seeing a growing trend towards daily hour requirements set by many insurance payers.

This change means that each day’s service provision must be authorized individually instead of having a flexible weekly hour allocation.

The Implications for Providers

This shift has significant implications for programs providing PHP and IOP services.

Providers need to adapt their treatment delivery and documentation to this new daily hour system to ensure they remain compliant (and avoid potential issues like claim denials, audits, and recoupments).

Continuing to rely solely on total weekly hours could put your programs at risk and negatively impact your cash flow.

Actionable Steps for Providers

To navigate this industry change effectively, providers should consider the following actions:

  1. Communicate with Your Team: Educate clinical and administrative staff about the new daily authorization requirements. Everyone involved in treatment delivery and documentation must understand the changes and how they impact daily routines.
  2. Review Current Authorization Practices: Assess how treatment hours for PHP and IOP services are currently tracked and documented. Adjust these practices to ensure they can capture and support daily treatment hours, not just weekly totals.
  3. Update Documentation and Billing Processes: Modify documentation templates and billing systems to reflect daily service delivery accurately. This adjustment will help in mitigating risks associated with claim denials and audits.
  4. Stay Informed and Engage with Payers: Regularly communicate with insurance companies to understand their specific daily authorization requirements. Staying updated on payer policies will help preemptively address potential issues.
  5. Seek Support: If facing challenges during this transition, reach out to billing experts or your client success representative for assistance. They can provide guidance and support to ensure your programs comply with the new authorization requirements.


The shift towards daily authorization requirements in PHP and IOP services is a significant trend that behavioral health providers must address proactively.

Providers can align their services with the new industry standards by understanding this shift, communicating effectively within the organization, reviewing and updating operational practices, and seeking support when needed.

This proactive approach will ensure compliance and protect the revenue stream and operational stability of the provider’s services in the ever-evolving behavioral health landscape.

In recent weeks, the healthcare industry has faced significant challenges following a cyber attack targeting Change Healthcare, a key player in the sector. This breach has disrupted the operations of numerous healthcare providers and organizations, with a profound impact on some of the most vulnerable members of society-those who rely on Medicaid for substance use and mental health treatment.

The Unseen Challenges for Vulnerable Populations

While the general impact of this cyber attack has been widely acknowledged, the unique challenges faced by Medicaid-dependent patients and their providers warrant greater attention. There is a very limited number of facilities that accept Medicaid and provide critical mental health and substance abuse services to these patients. They are driven by their commitment to support these vulnerable populations regardless of the low reimbursement rates they receive. These providers often operate on razor-thin margins, heavily relying on timely claims processing to sustain their operations.

A Fragile Ecosystem at Risk

The aftermath of the cyber attack has placed these healthcare providers in a precarious position. Delays in billing and claim rejections resulting from the Change Healthcare disruption have put significant financial strains on healthcare facilities. Without prompt payment, it can be difficult for facilities to cover operational costs and maintain staffing levels, potentially impacting the quality and availability of care for vulnerable populations. This situation underscores a grim reality: the scarcity of providers accepting Medicaid for mental health and substance abuse services risks becoming even scarcer, potentially leading to reduced patient intake and, in some cases, complete closure.

A Call for Solutions

Prosperity’s firsthand experience grappling with the aftermath of the cyber attack on behalf of our facility partners highlights the urgency for actionable solutions and greater support within the healthcare ecosystem. Change Healthcare’s delayed communication regarding the magnitude of the cyber attack left healthcare providers in the dark, prompting a frantic search for alternative billing methods through various clearinghouses-a time-consuming and labor-intensive endeavor. The challenge was not only finding a compatible clearinghouse but also ensuring claims were accepted by payers and ultimately paid, a process fraught with manual labor, trial and error, and significant delays.

Beyond the Immediate Response

The response from Change Healthcare and the broader healthcare community has been disappointingly slow, exacerbating the situation. The lack of leadership, accountability, and clear communication has sown fear and uncertainty, leaving smaller, Medicaid-focused facilities in a vulnerable position. These providers are the lifeline for the most at-risk populations, yet they face an uphill battle against systemic inefficiencies and a lack of support.

A Path Forward

The healthcare cyber attack’s ripple effects underscore a critical need for greater support and resilience within the healthcare ecosystem, especially for services catering to vulnerable populations. It calls for a concerted effort from all stakeholders-healthcare providers, payers, and regulatory bodies – to ensure that the needs of these populations are not sidelined. As we navigate the aftermath, it’s crucial to prioritize solutions that not only address the immediate challenges but also build a more robust, inclusive, and responsive healthcare system for the future.

The resilience of healthcare providers, particularly those serving Medicaid recipients, in the face of such adversity is commendable. Yet, their plight should serve as a wake-up call to address the systemic vulnerabilities exposed by the cyber attack. Protecting and advocating for the most vulnerable among us is not just a matter of ethical duty but a critical component of public health and safety. As we move forward, let this be the moment we galvanize action to secure a healthcare system that truly serves all its constituents with the dignity, care, and support they deserve.