Mental Health Partnership Raises $5M to Continue Its M&A Efforts

Mental Health Partnership LLC Raises $5 Million To Fuel The Outpatient Mental Health Provider’s Growth Strategy.

Scott Farber, CEO and founder of Mental Health Partnership, told Behavioral Health Business The Ames, Iowa-based organization is looking to invest in technology, M&A, de novo expansion and individual practices to add more profitable services.

And the Mental Health Partnership is building this ecosystem in small medical practices and underserved areas.

Mental Health Partnership made its first acquisition of 2020 – Central Iowa Psychological Services. Today, the firm operates about a dozen offices and four practices in Iowa, Idaho, and Texas.

It operates the OHM Mental Health Wellness Center in Lewiston, Idaho, and will soon open a location near the military base in Fort Hood, Texas, called Mindset Counseling Group. The Texas and Idaho practices are the company’s first de novos.

Mental Health Partnership used the funds to acquire a minority ownership stake in behavioral health technology provider TheraManager LLC.

TheraManager provides integrated electronic health records, revenue cycle management, telehealth and practice management tools exclusively for behavioral health practices. Farber said it is used by about 1,000 practices and by more than 7,000 providers.

Participating as an investor in TheraManager gives Mental Health Partnership access to technology tools that are critical to the type of care and management it seeks to provide.

“Having that technology as a piece of the play makes an extraordinary difference because now you can create digital outcome measures for better care – you can increase billing for practices so they get better margins,” Farber said. Hire more people.” “We view outpatient mental health as a practice acquisition strategy for expanding services… You put together an acquisition strategy, you add in that technology overlay, and now you have a kind of virtuoso ecosystem. mechanism that becomes self-reinforcing.”

Technology access is an important but sore point for behavioral health providers. Technological solutions, especially electronic health records, are seen as essential tools while at the same time being used at significantly lower rates than in the health sectors of health care.

Mental Health Partnership focuses on acquiring smaller behavioral health providers that have low margins but are not fundamentally distressed. Farber described him as a “mild-string asset”.

Mental health partnership adds service lines such as esketamine treatment and transcranial magnetic stimulation (TMS) to increase margins. It also offers partial hospitalization and intensive outpatient programs and medication management.

The company also focuses on better integrating practices into the health care community through partnerships with local hospitals, other medical groups, prisons, and schools.

“Community mental health often occurs in silos,” Farber said, adding that small hospitals and schools often need the expertise of behavioral health providers to meet the immediate needs and patients who need the care they need. .

The investment also pads the company’s balance sheet to cover provider salaries, build the leadership team and acquire more practices. The company pays providers through salary rather than per appointment.

“Part of what we wanted to do was move to a pay system with incentives on top of it,” Farber said. “And it requires a cash outlay because you’re not covered by insurance on day one.”

Looking ahead, the company expects to begin partnering with community stakeholders during the first quarter of 2023.

“We like the land and expand strategy,” Farber said. “The states that are particularly interesting to us are Oregon, with psilocybin coming online this year and Colorado next year… We are not trying to do a massive land grab across the country. We’re trying to stay focused.

Farber noted the proximity of Idaho and Oregon as another reason for interest in the state.

Farber acknowledges that his firm is taking a different approach to expansion by focusing on smaller practices. Their focus is less on building a behemoth platform company and more interested in building a sustainable and replicable business that can be replicated in areas that need increased access to care.

About 48% of the US population lives in an area that the federal government has deemed to be a mental health care professional shortage area.

He said he expects this approach to be applicable in both urban, suburban and rural areas that are under-served. The mental health partnership’s model could provide a useful contrast to other big-dollar consolidation plays, Faber said.

“How can we even think about being our brothers’ or sisters’ keeper if we’re saying it’s not attractive enough from a business model perspective,” Farber said. “What we want to prove is that it is [an attractive model] And that it’s possible to be able to do that and not have a one size fits all kind of model for mental and behavioral health, because it can be done without raising $100 million.

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