Plain-language definitions for every term used in this playbook. Click any highlighted term on any page to see its definition.
Revenue Cycle Management. The entire process of tracking revenue from a patient encounter, from scheduling and registration through billing, collecting payment, and managing denials. When we say "RCM," we mean all the steps that turn clinical care into collected dollars.
Behavioral Health. The umbrella term covering mental health treatment, substance use disorder treatment, eating disorder programs, and related clinical services. BH billing is significantly more complex than general medical billing.
Substance Use Disorder. Clinical diagnosis for addiction. Treatment facilities specializing in SUD face unique billing challenges around authorization levels, medication management, and regulatory compliance.
American Society of Addiction Medicine. The organization that defines levels of care for addiction treatment (from 1.0 outpatient through 4.0 medically managed intensive inpatient). Payers use ASAM levels to determine what they'll reimburse.
Partial Hospitalization Program. ASAM Level 2.5. A structured daytime treatment program where patients attend 5+ hours daily but go home at night. Common in BH for patients stepping down from residential care.
Intensive Outpatient Program. ASAM Level 2.1. Typically 3 hours/day, 3+ days/week. The most common outpatient treatment modality in BH. Patients live at home and attend structured programming.
Opioid Treatment Program. Federally regulated clinics that dispense medications like methadone for opioid addiction. OTPs face the heaviest regulatory burden in BH, governed by 42 CFR Part 8 and SAMHSA oversight.
Medication-Assisted Treatment. Using FDA-approved medications (methadone, buprenorphine, naltrexone) combined with counseling to treat substance use disorders. The billing and documentation requirements for MAT are uniquely complex.
Electronic Medical Record. The software system where clinicians document patient care. In BH, common EMRs include Kipu, Alleva, Sunwave, and Netsmart. The EMR is where billing data originates.
Current Procedural Terminology. The standardized code set used to bill insurance for medical services. Choosing the wrong CPT code means either leaving money on the table (underbilling) or triggering an audit (overbilling).
Substance Abuse and Mental Health Services Administration. The federal agency that oversees behavioral health treatment programs, distributes block grants, conducts OTP surveys, and sets documentation standards.
Centers for Medicare & Medicaid Services. The federal agency that administers Medicare and Medicaid. CMS audits claims, sets reimbursement rates, and enforces billing compliance across all healthcare providers.
Earnings Before Interest, Taxes, Depreciation, and Amortization. The profitability metric PE firms care about most. In BH acquisitions, facilities are typically valued at 8-12x EBITDA, so every dollar of recovered revenue multiplies in enterprise value.
Accounts Receivable. Money owed to the facility by insurance companies. "Net days in A/R" measures how long it takes to collect. Best practice is 30-35 days; many BH facilities run 50+ days.
Return on Investment. What you get back versus what you spent. In the context of RCM technology, ROI is measured in recovered revenue, reduced denials, and faster collections compared to the platform cost.
Health Level 7. The international standard for exchanging data between healthcare systems. When we say "HL7 integration," we mean our platform can talk to their EMR without replacing it.
Fast Healthcare Interoperability Resources. The modern API-based standard for healthcare data exchange. Newer and more flexible than HL7. Pronounced "fire."
Out-of-Network. When a facility doesn't have a contract with a specific insurance company. OON billing is more complex, higher-risk, and requires specialized authorization workflows.
Full-Time Equivalent. One full-time employee's worth of work. Used to measure staffing. "You don't need a billing FTE at every location" means you can centralize the work.
Private Equity. Investment firms that buy, improve, and sell companies. PE-backed BH groups typically operate multiple facilities and focus on EBITDA growth for a 3-5 year exit.
Mergers and Acquisitions. When companies buy or combine with other companies. In BH, PE groups frequently acquire facilities, creating billing standardization challenges.
Federally Qualified Health Center. Community-based healthcare providers that receive federal funding to provide care in underserved areas. FQHCs have unique billing requirements and cost-based reimbursement.
Request for Proposal. A formal procurement document used by hospitals and government agencies to solicit vendor bids. RFP processes add 90-180 days to the sales cycle.
Revenue Cycle Intelligence. The scoring methodology in this playbook that evaluates prospect fit based on ownership type, payer mix, census, trigger event, and Kipu status.
Insurance company approval required before treatment begins. If a facility provides care without prior auth, the payer can deny the entire claim. In BH, prior auth rules vary dramatically by payer and level of care.
The percentage of submitted claims that insurance companies reject. Acute care averages 5-7%. Behavioral health averages 17.3% because of authorization complexity, documentation requirements, and ASAM level disputes.
The process of identifying, appealing, and recovering denied claims. 68% of denied BH claims are never reworked. Systematic denial management recovers revenue that most facilities write off.
A claim submitted with all required information correct the first time. Clean claims get paid faster. Dirty claims get denied, delayed, or underpaid, requiring expensive rework.
Money earned through delivered care that never gets collected. Causes include missed authorizations, coding errors, untimely filing, and unworked denials. Most BH facilities leak $500K-$1.2M annually without realizing it.
How many days, on average, it takes to collect payment after a claim is submitted. Best practice is 30-35 days. Every day beyond that delays cash flow. At a 100-bed facility, each extra day costs roughly $3,200.
Ongoing insurance review during a patient's treatment to determine if continued care is medically necessary. In BH, payers can terminate authorization mid-stay, creating billing gaps if documentation doesn't support the level of care.
The clinical justification that a service was required. Payers deny claims when documentation doesn't prove medical necessity. In BH, proving necessity for residential vs. PHP vs. IOP is where most denials originate.
The breakdown of how a facility's patients are insured: commercial insurance, Medicaid, Medicare, out-of-network, or private pay. Payer mix determines billing complexity and revenue potential.
Checking claims for errors before submission. Catching a coding error before it's sent to the payer prevents a denial. Validation engines automate what billers currently do manually.
Billing for a lower-intensity service than what was actually documented and delivered. Common in nonprofits and owner-operator facilities where billers code conservatively out of audit fear. The average nonprofit underbills $218K/year.
Automated checks that flag potential coding errors before claims are submitted. Guardrails prevent both underbilling (leaving money on the table) and overbilling (audit risk) without replacing the biller's judgment.
Denied claims that nobody follows up on. Billing teams triage by dollar amount and let smaller denials go. But a $340 denial ignored 200 times/year is $68,000 in accepted losses.
When one person holds all the billing knowledge. 73% of growth-stage BH networks depend on a single biller. When that person leaves, revenue collection stops until a replacement is trained.
The federal regulation governing Opioid Treatment Programs. It sets strict requirements for dispensing documentation, take-home dose authorization, and billing practices. Non-compliance can shut down a program.
A mandatory improvement plan imposed after an audit finding. When CMS or a state auditor identifies billing errors, the facility must submit a corrective action plan showing how they'll fix the problem. Technology solutions are often required.
Medication (typically methadone) that OTP patients are authorized to take home instead of consuming on-site. Take-home dose documentation must link clinical assessment, dispensing records, and billing codes. Gaps here are the #1 SAMHSA survey finding.
Federal funding distributed to states for behavioral health services. SAMHSA block grants now require outcomes data tied to billing, creating new technology requirements for grant recipients.
Documentation that allows a government agency to bypass competitive bidding when only one vendor can meet a specific need. Compliance mandates with tight deadlines can justify sole source procurement.
A documented record of every action taken on a claim, from creation through submission, denial, and appeal. When a surveyor walks in, the audit trail is what proves compliance.
Documentation of every medication dose dispensed to a patient. In OTPs, dispensing records must match billing claims exactly. Mismatches are treated as compliance failures, not billing errors.
The intensity of treatment a patient receives, defined by ASAM criteria. Ranges from 1.0 (outpatient) through 4.0 (medically managed inpatient). Payers reimburse different amounts for each level, and transitions between levels require new authorizations.
The notes, assessments, and treatment plans clinicians write. This documentation is the foundation of every insurance claim. If the note doesn't support the billing code, the claim gets denied. 31% of BH denials trace back to documentation gaps.
The person inside a prospect's organization who advocates for adopting new technology. In hospital systems, the clinical champion navigates internal politics and committee approvals. Without one, deals stall.
ASAM Level 3.1-3.5. Patients live at the facility 24/7 and receive structured treatment. The highest-revenue level of care in BH, but also the most authorization-intensive.
ASAM Level 3.7-4.0. Medically supervised withdrawal management. Short stays (3-7 days typically) with high per-day reimbursement. Requires precise documentation of medical necessity to avoid denials.
A sales methodology where the rep teaches the prospect something new about their own business, reframes their understanding of the problem, and then presents the solution. This playbook uses Challenger paired with empathy bridges to avoid sounding adversarial.
A follow-up statement after a Challenger reframe that acknowledges the prospect's situation. It prevents the data-driven challenge from feeling like an attack. Example: "Your team isn't hiding that number. They're overwhelmed."
One of seven prospect categories in this playbook: PE-Backed, VC/Growth, OTP, Nonprofit, Owner-Operator, Hospital-Owned, and State/County. Each has different pain points, decision-makers, sales cycles, and value language.
The specific circumstance that creates urgency for the prospect: board pressure, biller departure, audit finding, scaling pain, grant changes, post-M&A integration, or exit planning. No trigger usually means a long sales cycle.
What a company is worth to a buyer. In PE-backed BH, enterprise value is typically 8-12x EBITDA. So recovering $500K in annual revenue doesn't just add $500K in value; it adds $1.5M-$2.5M to the exit price.
Replacing a prospect's current billing solution (in-house team, outsourced company, or competing software) with Kipu RCM. Displacement requires positioning against the incumbent without trashing them.
The sales call phase where you ask questions to understand the prospect's situation, pain points, and decision-making process. In this playbook, discovery questions are conditional: each answer determines the next question.