Payers often prefer ambulatory, outpatient substance use disorder (SUD) treatment for its lower cost. Yet, SUD patients frequently present with higher acuity cases and more co-occurring conditions.

Gateway Foundation is preparing for both trends by making targeted investments in ambulatory and bedded programs while also battling increased pre-admission requirements from payers.

In some instances, these increased pre-admission requirements violate parity laws, Jeremy Klemanski, president and CEO of Gateway Foundation, told Behavioral Health Business.

Chicago-based Gateway provides SUD and mental health treatment in Florida, Georgia, Illinois, Michigan, Missouri, New Jersey, Texas, and Wyoming. The nonprofit treats more than 30,000 patients each year.

Klemanski will participate in a panel discussion entitled “What’s New: Service Line Diversification Strategies for the Next-Gen SUD Business” at Behavioral Health Business’ inaugural Autism & Addiction Treatment Forum in Chicago on July 18.

BHB sat down with Klemanski to discuss Gateway’s growth strategy, the upcoming presidential election cycle and how Gateway is responding to illegal pre-admission requirements.

BHB: Gateway recently added an outpatient clinic in Illinois and plans to open another new facility this summer. Where will the clinic set to open this summer, and how would you describe Gateway’s growth strategy?

Klemanski: Our next clinic is slated to open in Peoria, Illinois, sometime between late June and August, probably around July.

We think that the demand for bedded programs and ambulatory programs will continue to grow. We know that the need is unmet. We also think that there will be continued need and desire for digital-first services. We are making targeted investments in all of those areas.

We have operational footprints in nine states. It would be safe for anyone to assume that we’re looking at opportunities in those states, and states adjacent to those states. We really like doing more in states where we already have experience, footprint and established partners who can give us some good insight into what they think the unmet need in the community is.

We’re trying to avoid markets with too much competition, even though there’s a lot of unmet need in every market. We’re really targeting markets that are less served.

You mentioned that you’re seeing demand for bedded programs. There has also been discussion in the industry that payers prefer outpatient modalities. Are you experiencing pressure from payers for less acute treatment plans? Why are you seeing demand for bedded programs? 

We have a history and a reputation of being good with dually diagnosed, co-occurring populations, so we can and do take more complicated patients in our bedded programs than some providers do. That’s one thing that differentiates Gateway and allows us to not feel as much of that competitive pressure for beds.

As a payer you might have a preference, but there’s also the clinical reality of where people are. We are seeing people who have a higher acuity of both substance use and mental health conditions and combined. Those are not folks who are, frankly, easy to treat and are not good candidates for fill-fit-first type models and an outpatient or digital setting. That’s probably why.

If you talk to providers across the country, as I do, I regularly hear that they’re seeing higher acuity in the patients they’re serving. The question one might ask is, ‘Why are we pushing higher acuity folks to the less acute service model?’ There is an increase of people seeking treatment who are lower acuity but it is because of more screening, more awareness, less stigma. I think there is legitimate growth in ambulatory or outpatient services also, to be candid.

Do you see any other trends with payers or reimbursement in the past year, or anticipate seeing any in the near future?

In some places where we operate we have seen an increase in pre-admission requirements, even in some cases that violate parity laws in some states.

We have not seen it affect us financially because we’ve been able to work through those issues. Still, we’ve seen this increased push to do pre-admission authorization or additional screening or additional requirements from not all but some managed care entities. Where those are not legal or not in line with parity requirements, we’ve pushed back pretty hard.

We try to start with the partnership approach and say, ‘Listen, you can’t do this in this state. Why don’t you talk to us? What are you trying to accomplish?’ I think you’ll continue to see that as people are trying to manage scarce resources.

We want to ensure we have a good partnership with our payer partners. But obviously, we don’t want things that become a barrier to someone accessing care because when people are willing to go into a substance use or mental health service setting, that window is fairly narrow. If they really experience too many barriers or hurdles or delays, they might change their mind or get frustrated. We need to avoid that, not just as a provider but as a group or as a sector in healthcare.

What do you think is the large-scale fix here?

There’s some promising things coming out. There’s a data project that a lot of providers are participating in, which is trying to capture national longer-term data on treatment outcomes. The more we can validate for payers that longer lengths of stay in a bedded setting correlates to increased recovery capital, increased health, increased time to work on social determinants of health, post-acute stay, the more comfortable people can be spending their dollars on that type of care.

I am encouraged that so many providers are coming together to share data. I’m encouraged by what the preliminary data is telling us; it’s bearing out but we’ve known anecdotally in this industry for a long time. If we can get regulators and funders to take a look at that and understand that, yes, it may be easier to deliver ambulatory care. Yes, it may be cheaper. It is not always the right care for everybody.

What are Gateway’s greatest challenges so far in 2024?

The biggest challenge is obviously the economy and what it’s doing to the workforce and what the workforce is doing to the economy. There’s a kind of a circular relationship there to a certain extent.

What is positive is that we’re seeing some increases in funding in places that are allowing wages to rise. We are seeing some modest contractual reimbursement improvements that are allowing us to raise salaries. That is ultimately a part of being able to attract and retain qualified workforce.

What is Gateway’s strategy to retain its workforce?

We’ve put a number of things in place at Gateway. For example, we doubled what we’re paying for people to take coursework. We actually improved the policy where Gateway will pay, not just all of your prep fees, but your testing fees and your recertification fees for licenses, certifications. We also just put in place an advanced education program where if you’re willing to commit to working with us for a number of years, we’re willing to pay for your college education. We’ve already had a few people take advantage of that. We don’t know how, what the ramp-up and adoption will look like, but we see that as a huge investment in our own workforce and the larger industry workforce. We’re really taking a look at how we help grow and develop talent for us, but also for the industry.

Zooming out to the entire SUD space, what are some of the expectations or trends that you have for the rest of 2024 and looking forward to 2025?

I think we should continue to expect, frankly, a relatively negative environment in terms of what’s happening in our communities, with just the incredible rate of overdose. We all know how prolific fentanyl and analogs are in our communities. It seems like that’s not getting any better.

I think we can look forward to the competitive pressure that a presidential election brings to an incumbent administration and a potential new administration and hope that it creates some movement or some increased awareness around just how bad that picture is in a lot of communities and how much we need public policy shifts.

We need two things. We need more funding, but we need a greater sense of urgency at the pace at which things happen. You look at the opioid settlement funds that are languishing in most states unutilized. You look at how long it takes us to make changes, whether the regulatory relief or getting funding out. I have a hope that increased awareness and less stigma will result in greater political pressure in terms of making the current substance use and mental health crisis in America a bigger issue.