Illinois is a big behavioral health market, with its high ratios of drug-related complications and mental health awareness. Investors can target Illinois for their entry into the market. However, starting a behavioral health business in Illinois might not be the single most effective way of entry. Much easier and more reliable is to buy your way into the market.
Buying a behavioral health business in Illinois requires much auditing and examining of multiple businesses until you find a suitable one. This blog charts out how you can be more vigilant in buying a business in Illinois.
Strategique Partners can now help you remain vigilant in buying a behavioral health business in Illinois.
Ways in Which You Can Remain Vigilant While Buying a Behavioral Health Business in Illinois
Before anything else, we should establish at the outset that buying a behavioral health business in every state of the US is a different experience. The regulatory landscape, compliance requirements, billing mechanisms, consumer culture, and demand demographics are different for each state. So, buying a behavioral health business in Pennsylvania is different from buying a business in Michigan. The logical conclusion of this discussion is that you should not rely on one-size-fits-all type of guides. Therefore, we will only speak of buying in Illinois in the following lines:
1. Verify Licensing and Compliance Record
Behavioral health licensing and compliance are primary to every behavioral health business operating in Illinois. There is strict enforcement regarding them. You can face penalties, permanent closure, and fines for compliance issues. Furthermore, there are periodic inspections and licensing renewal requirements. Therefore, whenever you look to buy a behavioral health business, you must verify its licensing and compliance record. In Illinois, you need to keep checking with the requirements of the following state authorities responsible for licensing businesses:
- Rehab centers, partial hospitalization programs (PHP), residential treatment centers, and detox facilities are licensed by the Illinois Department of Human Services’ Division of Substance Use Prevention and Recovery (SUPR).
- Mental health treatment programs are typically licensed by the Illinois Department of Public Health (IDPH).
As a buyer, you will be checking the status of licensing, pending complaints or investigations, and other such matters.
2. Understand Change of Ownership Rules in Illinois
Once you buy a behavioral health business, the change in ownership entails regulatory approvals. Sometimes, the license to run the behavioral health business is not transferable, meaning that the buyer must apply for a new license. Additionally, Illinois has also introduced new requirements, such as informing the Illinois Attorney General in advance of the deal under the healthcare transaction reporting rules. This matters because failure in keeping up with the requirements can even result in the reversal of deals.
3. Ensure Financial Due Diligence
Buying a mental health business or a rehab center for sale anywhere requires you to carry out proper financial due diligence. This is actually important because sometimes businesses that seem very profitable have hidden financial risks, which is why their owners look to sell the business. So, you need to avoid buying such a business at any cost. But the problem is that these risks are not clear. You need to find them out by reviewing:
- Revenue sources such as Medicaid, Medicare, commercial insurance, and cash-pay clients
- Accounts receivable aging
- Claim denial rates
- Billing accuracy
- Insurance contract terms
The above mentioned things are the cornerstone of revenue cycle management of a behavioral health business. Therefore, with financial due diligence, you can check these aspects and make an informed decision about them.
4. Check Technology and Infrastructure Circumstances of Businesses
Today, businesses are shedding non-core areas or minimizing their operational costs by better use of technology. Data protection and privacy are important compliance requirements for behavioral health businesses under HIPAA rules, and that too requires technology or software integration. So, a behavioral health business in Illinois will need technology infrastructure such as:
- Behavioral health electronic health record system
- Telehealth platforms
- Workforce scheduling software
- Integrated RCM systems
Outdated mechanisms often result in poor prospects of growth and development in the future. Therefore, a buyer must ensure that they find a business with technology infrastructure.
Some Other Aspects to be Vigilant About When Buying a Behavioral Health Business
There are a few relatively common but equally important aspects that a buyer in Illinois should be concerned with. These include key areas such as:
- Audit billing and compliance practices
- Review HIPAA and patient privacy compliance
- Assess clinical operations and staffing
- Examine accreditation and quality metrics
- Evaluate real estate and zoning issues
- Investigate market position and referral sources
- Ensure good deal structuring
How Can Strategique Partners Help You With Vigilant Buying of a Behavioral Health Business in Illinois?
Strategique Partners is a team of experts that offers services in mergers and acquisitions, business startup, business management, business development, and licensing in the behavioral health market. Experts specialize in the sector across the US. They have the experience of this market alone. Therefore, one thing that can be said about experts at Strategique Partners is that they know their job. As a buyer aspiring for vigilant buying, you get that from their consultation. The following services are relevant in this regard:
Get results through vigilant buying in the behavioral health market of Illinois with Strategique Partners today!
Frequently Asked Questions Regarding Buying a Behavioral Health Business in Illinois
The following questions are answered as commonly asked questions about buying a behavioral health business in Illinois:
1. How Technology is a Competitive Divider in Illinois When Buying a Behavioral Health Business in Illinois?
Payers, clients, and regulators all expect data privacy and fluency from a behavioral health business in Illinois. This is why technology becomes a critical aspect of a business that makes it competitive. For behavioral health businesses in Illinois, there are the following tools powered by technology:
- Behavioral-health-specific EHRs
- Audit-ready reporting
- Outcome tracking
- Integrated billing and utilization review
2. What Should Kill a Behavioral Health Business Deal in Illinois from a Buyer’s Perspective?
As a buyer, one should call off those behavioral health business deals in which any of the following things are evident:
- Misaligned CPOM structures
- Overreliance on one MCO
- Misaligned CPOM structure
What Growth and Expansion Opportunities are Available for Behavioral Health Businesses in Illinois?
As a buyer, you get the following opportunities in the market for your potential newly bought behavioral health business:
- Multi-site expansion across metros
- Correctional and judicial diversion programs
- Telehealth coverage for rural counties
- School-based behavioral health partnerships
- Employer-based mental health contracts
