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The Phone Call That Changed How I Talk About Advisory Boards
An operator called us after meeting us at a conference. The DOJ had served their facility. Allegations involved false claims related to psychoeducation and upcoding, a pattern the U.S. Attorney’s Office has been pursuing aggressively. He had a board of directors. Three of his closest friends and his attorney. Not one of them had ever run a treatment center.
That is the moment I stopped politely nodding when operators told me they did not need a behavioral health advisory board. A board of directors handles fiduciary duty. An advisory board tells you the things your friends will not, and catches the regulatory drift your attorney is too far from operations to see. Two different functions. Most founders conflate them and pay for it later.
The price tag on his matter, before settlement, was north of $4M in legal fees alone. An advisory board with one operator, one former state surveyor, and one revenue integrity lead would have flagged the billing errors eighteen months earlier. I am sure of it.
What an Advisory Board Actually Does That Your Attorney Cannot
Your healthcare attorney is excellent at answering the question you asked. They are not sitting in your EOC tour. They are not reading your utilization management denials. They are not looking at how your marketing team books admissions or how your billers code a 90853 versus a 90837.
An advisory board lives at the operational layer. The right composition catches the things that become enforcement actions. A former Florida AHCA surveyor knows what a deficiency pattern looks like before it becomes a Statement of Deficiencies. A revenue integrity veteran knows when your average length of stay at Level 2.5 partial hospitalization has drifted in a way that will trigger an SIU audit at Aetna or Cigna. A multi-site operator knows when your census growth is outpacing your clinical leadership bench.
None of that is legal advice. All of it is the kind of pattern recognition that prevents the legal bill in the first place.
Composition: Who Actually Belongs on the Board
I tell founders to build a five-seat advisory board. Not seven. Not three. Five.
- A current or recent multi-site operator who has lived through a CMS or state survey at a Level 3.5 or 3.7 facility.
- A former state surveyor or accreditation reviewer from Joint Commission or CARF. They know the surveyor focus before you do.
- A revenue integrity or payer-side leader who has run UM or SIU work. They will read your denials differently than your billing company will.
- A behavioral health finance or M&A professional who understands EBITDA quality of earnings and how PE diligence will tear your AR apart.
- A clinical leader, ideally a medical director or licensed clinical executive, who can pressure-test ASAM Criteria, 4th Edition application across your levels of care.
Notice what is missing. Your best friend. Your college roommate. Your largest referral source. Anyone whose loyalty to you would prevent them from telling you the marketing contract you signed last quarter looks like a kickback under the federal Anti-Kickback Statute and EKRA.
How the Board Actually Operates
Quarterly meetings. Two hours. A standing agenda that includes survey readiness, payer trends, clinical documentation findings, financial covenants, and one open topic the founder brings. That is it. You are not running a Fortune 500 governance committee. You are running an operator’s checkpoint.
Compensation matters. Pay the board. $2,500 to $5,000 per meeting per member, plus travel, depending on seniority. Equity advisory grants if the entity supports it. People who are paid show up prepared. People who are doing you a favor show up tired and tell you what you want to hear.
The most useful thing my own advisors have ever done for AHS is disagree with me in writing before I made an expensive decision. That is what you are paying for. Not validation. Friction.
The Enforcement Environment Is Not Slowing Down
The DOJ’s 2024 National Health Care Fraud Enforcement Action charged 193 defendants with over $2.75B in alleged false billing, with behavioral health and SUD treatment featured heavily. OIG’s most recent Work Plan kept residential SUD treatment and outpatient behavioral health on the active list. Florida AHCA continues to issue moratoria and emergency suspensions on SUD providers in Palm Beach and Broward Counties. Texas HHSC is auditing PHP and IOP utilization at a pace I have not seen in a decade.
If you are operating a treatment center in 2026 without an advisory board, you are not saving money. You are deferring a legal bill. The operators I see thriving have built the operational backbone before the survey, before the SIU letter, before the subpoena. We will be at NAATP National in Amelia Island May 4 through 6 sponsoring the Women in Leadership Luncheon. If you want to talk about how to actually stand one of these up, find Allison, Benjamin, Leah, or me. We do not bring a pitch deck. We bring a notebook.
References
- U.S. Department of Justice: 2024 National Health Care Fraud Enforcement Action
- HHS Office of Inspector General Work Plan
- Florida Agency for Health Care Administration: Health Facility Regulation
- Substance Abuse and Mental Health Services Administration (SAMHSA)
- American Society of Addiction Medicine: The ASAM Criteria, 4th Edition
- CARF International Accreditation Standards
- The Joint Commission Standards