In this Becker's Healthcare webinar sponsored by Charta Health, Lucas Voss of Becker's talks with Dr. Andy Cruz, a Harvard-trained psychiatrist and co-founder of Guidelight Health, and Chelsea Landendorf, Guidelight's vice president of compliance and privacy, about how Guidelight expanded its in-person partial hospitalization programs (PHP) and intensive outpatient programs (IOP) across five states without losing its level-of-care standards. Andy and Chelsea explain why PHP and IOP fill a critical gap in mental health care, why multi-state compliance makes these programs hard to scale, and how compliance by design and AI review of 100% of charts help Guidelight document the care it delivers.
Key takeaways
- Andy calls the space between the ED or inpatient care and traditional outpatient care the most dangerous gap in healthcare. PHP and IOP are designed to bridge it.
- PHP and IOP fell out of favor for decades after fraud, overcoding, and billing problems drew CMS regulation, then returned in force after the pandemic. Andy warns that poor-quality care could make this level of care disappear again.
- Guidelight delivers in-person care with a virtual option and accepts Medicare, Medicaid, and commercial insurance, a model Andy says is more expensive and operationally complex than peers' virtual-only, commercial-only programs.
- Chelsea says compliance hasn't slowed Guidelight down, but regulation affects how fast any healthcare organization can grow. Her answer is compliance by design: doing each state's regulatory work before entering it.
- A 10% chart audit standard can't keep pace with multi-state volume, so Guidelight uses AI to review 100% of charts and drill down by provider and clinic.
- Andy says most clinicians make the right level-of-care decisions but don't record them well. Scribes and AI chart review help documentation reflect the care delivered.
Introducing the session
Lucas: Hi, everyone. This is Lucas Voss with Becker's Healthcare. Thanks so much for joining us for today's webinar: How Guidelight Health expanded across states without losing its level-of-care standards. Before we begin, a few quick housekeeping instructions. If you have any questions for our speakers throughout the webinar, please submit them to the Q&A box you see on your screen. We can follow up to get you an answer there. Today's session is being recorded and will be available after the event. You can use the same link you used to join today's webinar to access that recording. If you have any technical issues, audio or visual, try refreshing your browser. That generally helps. You can also submit any technical questions through the Q&A box, and our team will be happy to help you there.
I want to jump right in because we have so much to talk about. We'll discuss how Guidelight Health's partnership with Charta Health has supported its expansion across multiple states while maintaining consistent level-of-care standards, which is so important and which we'll touch on later. Charta Health is an AI-powered chart review platform designed for behavioral health organizations. Charta integrates directly with client EHRs to review clinical documentation, helping ensure encounter notes are audit-defensible and accurately coded before becoming claims. The platform also aggregates clinical quality metrics, automates provider performance feedback, and supports payer- and state-specific compliance requirements.
I'm so excited to talk about that, but you're not going to talk only with me. You're also going to talk with two awesome guests we have on today: Dr. Andy Cruz and Chelsea Landendorf. Andy is a Harvard-trained psychiatrist and co-founder of Guidelight Health, which provides compassionate, trauma-informed partial hospitalization and intensive outpatient programs across five states. Chelsea is vice president of compliance and privacy at Guidelight Health and brings more than 15 years of healthcare compliance experience, both within and beyond behavioral health.
Andy and Chelsea, it's so great to have you both. I want to give you both a little more space, because, as we've outlined, you both have so much experience, and experience in different parts of healthcare. Andy, I'd love to start with you. Can you tell us a little more about your journey as a clinician, and why you started Guidelight Health?
Why the gap between inpatient and outpatient mental health care is so dangerous
In brief: Andy calls the space between the ED or inpatient care and traditional outpatient care the most dangerous gap in healthcare, because so many people get lost there. Family experience with serious mental illness and training across every level of care led him to build Guidelight Health, which he has been doing for three and a half years, to bridge it.
Andy: Absolutely. Thanks so much for having me and having Chelsea here. My journey is a very personal one. I was born in a small town in West Texas named Amarillo. Both my uncles, my mom's brothers, had schizophrenia when I was growing up. That was challenging for us, and it has always stuck with me and been a big part of my why. We lost one of my uncles to his mental illness, and the effects of that have radiated through multiple generations.
I ended up going to school for music. I'm a creative in my heart, too. Then I switched career paths, went to medical school, and fell in love with medicine. I went into surgery for a year, found it a little lacking in the relationship aspect, and made my way to MGH, McLean, and Harvard for psychiatry. I finally felt like I was sitting with the right kids at the table. It was my group of people, and it was so special to me. I fell in love with psychiatry and mental health.
I've been able to work in every level of care: inpatient, PHP, IOP, outpatient. And I saw this gap in the middle of mental health care, where so many people were getting lost, and I felt compelled to try to make some changes. Sometimes you've got to be the change you want to see. So I've been doing that, building Guidelight for the last three and a half years, and it's been so special to me.
Lucas: As a quick follow-up: For you, it was about closing that gap you were seeing through your training and through your own personal experience?
Andy: Exactly. I think this is the most dangerous gap in healthcare. Maybe it's a little controversial to say. The space between the ED and inpatient care and traditional outpatient care is so big, and so many people get lost, and I didn't see solutions out there. So my conscience left me no other choice.
Building compliance infrastructure for a growing healthcare organization
In brief: Chelsea pairs experience in large health systems, where governance is already established, with seven years in health tech startups, where compliance is built while the organization grows. She sees compliance's role as understanding where the business wants to go and the regulatory risks involved, then helping it get there responsibly, with technology as the backbone of that infrastructure.
Lucas: Chelsea, I'm so glad we have you on because this space, sometimes fortunately, sometimes unfortunately, is littered with compliance flags, lots of acronyms, and lots of things to understand. We'll be counting on your expertise to guide us through the weeds on compliance. I'd love for the audience to understand a little more about you: your expertise, your training, and what drew you to this type of work, at Guidelight specifically, but also, as Andy said, in the IOP and PHP space.
Chelsea: Happy to share. Thanks for having us. My background is in healthcare, and I started in health information management, which is a small niche of compliance: health information management and privacy. Over time, from an operational lens, my interest expanded into compliance, patient safety, quality, and overall healthcare operations. I'm based in Austin, Texas, and that's where I started my career, in large healthcare systems: HCA, St. David's HealthCare. Through that lens, I had the benefit of learning in a maturing healthcare environment where the infrastructure and governance were already well established, so it was learning to build within an existing structure. In that space, they always want you to be strategic and innovative, but you don't always have the tools and technology to do that in a large, corporate healthcare environment.
So I've spent the last seven years primarily working in health tech, in startups and growing healthcare organizations, which has been such a fun, different experience. It's allowed me to learn innovation and strategy from a lens I enjoy. In those environments, you're building infrastructure while the organization is growing around you. The notion of building the plane in flight is very real, and it's something I truly enjoy.
For me, experiencing both sides prepared me well for Guidelight. I know the needs and requirements of the regulatory space for a mature healthcare system and how it can run functionally, and I can take that information and mold it in a way that works for each type of startup environment I work in, so that you have the infrastructure for a scalable solution. Because the goal, at Guidelight and at most companies, is not to be in one state, but to be nationwide. So you have to have robust healthcare infrastructure to make that regulatory palette work across 50 states.
That's how I've shaped compliance. I don't see our role as sitting on the sidelines telling the business what it can do. Our job is to understand where the organization wants to go, understand the regulatory requirements and the risks behind that, and then help figure out how we get there responsibly.
That's a big part of why I joined Guidelight. I've been very intentional for the last seven years about working for companies that are focused on a mission that connects with me personally. And there's such an enormous need for mental health care. Like Andy said, PHP and IOP fill an important gap between traditional outpatient care and intensive levels of care. So for me, being part of Guidelight was the opportunity to help change the way we access mental health care while also building the infrastructure that allows us to grow responsibly.
Lucas: As a follow-up, I love that you have both of these backgrounds. How important is it to have that tech piece, too? It's often overlooked. You understand the technology behind it, and a lot of folks in the healthcare space don't. Why is that so important, especially for the folks you talk to on a regular basis across the country?
Chelsea: The way I see it, technology is how we drive efficiencies. It's what drives data. It's the backbone of the infrastructure. So leveraging technology in a meaningful way allows you to scale responsibly and drive those operational efficiencies. And in this health tech space for the last seven years, I've been so close with ops and product that you can say, "Hey, we need to turn this consent on, or make this function do this," and see it. We can get that done in 24 to 48 hours. That's night and day compared with what you used to have to deal with in corporate healthcare.
What are partial hospitalization programs (PHP) and intensive outpatient programs (IOP)?
In brief: PHP and IOP are intermediate levels of mental health care between inpatient hospitalization and traditional outpatient therapy. Andy explains that they emerged as step-down care during 1960s deinstitutionalization, fell out of favor after fraud and overcoding prompted CMS regulation, and returned in force after the pandemic. He describes this level of care as a hospital without the bed.
Lucas: We'll touch on this a little more, because that combination is so crucial. Andy, I want to come back to you and level-set the conversation, because it can get complicated. I want to touch on the IOP and PHP space you've both mentioned. Can you explain to the audience a little of the history, the challenges, the opportunities? What is it about this that's so important to understand? Why are we talking about it?
Andy: That is such a great question. I'm so glad you asked, because a lot of people understand that people who are very ill go into mental health hospitals, and a lot of people understand what it's like to have a therapist or a psychiatrist. And then there's this middle that has been underutilized, is so powerful, and has an interesting history. In the '60s, as we went through deinstitutionalization, it became apparent to the mental health field, and also to the broader healthcare field, that people needed some sort of step-down, some way to fill the gap. Initially, you left an institution and then went to PHP, a partial hospital, five days a week for multiple months, then four days a week for a couple of months, then three days a week, gradually stepping you back down into your life. That was helpful for people.
The problem is, as happens in all areas of healthcare, a couple of bad players ruined it for everybody. These levels of care became permanent places for some people. They never left partial hospital. They never left the step-down. It's not outpatient, so it pays better. The reimbursement is higher than outpatient. There was a lot of fraud. There was overcoding. There were billing problems. So CMS came in and regulated this level of care, and I understand why. It fell out of vogue for decades.
What we saw was a slight increase before the pandemic, and then the pandemic happened. There were so many people in crisis, so many people suffering, and people needed more. People were scared to go to hospitals. Hospitals couldn't take people. So this level of care came back, and it has come back full force. People are opening virtual IOPs all over the country. People are opening PHPs and IOPs all over the country. It's a hospital without the bed. When done well, it can be just as powerful as a hospitalization, but you get to sleep in your own bed.
So this is an amazing level of care that was historically very popular, went out of favor, and now is popular again. One of the reasons I love having these conversations, and something important to me, is educating people, because the same thing that happened in the past could happen again. If we do not deliver quality care, if we take advantage of the system, [inaudible], this amazing, magical level of care will go away again. That keeps me up at night, because I believe in it so much. So I use history to keep the fire burning and to keep me fighting, to make sure everyone understands this level of care and how to deliver it well, and to do best by our patients.
Why in-person care matters in behavioral health crisis treatment
In brief: Andy says virtual care has its place for people in rural areas and people who speak English as a second language, but people in crisis need the structure and connection of in-person care. He also points to intangibles: Some patients get their only meal or only human connection of the day at the clinic, and virtual IOP for a child can require a working parent to stay home.
Lucas: Fortunately and unfortunately, you have a very personal touchpoint to all of this, based on your introduction earlier in our conversation. I want to briefly touch on this because it's crucial. When you have crisis care that needs to happen immediately, as in the example of your own family, why is the in-person part so crucial?
Andy: 100%. I'll first acknowledge that virtual certainly has its place. There are people who live in rural areas. There are people who speak English as a second language who need that virtual care. In-person care is so important because we treat people in crisis. That is the commonality here. We see people on the worst days of their lives. They come to us, and they will tell us things they don't tell their spouses. They will tell us things they don't tell their best friends. They will tell us things they don't tell their priests. It will be many people's worst day of their lives. They necessitate the structure of in-person care. They necessitate the connection of in-person care.
On the connection piece, psychiatry is such a cool space, because I think 50% of what I do is very scientific. There's lots of data behind it: These are the skills that work best; these are the medications that work best. The other 50% is art, and it is a lot about connection and relationships. And we know even now that humans connect best in person. So it's so important, especially during crisis.
There are a lot of intangibles you might not think about. We have clinics where people who come to us are cutting their lunch sandwich or meal in half, because that's the only meal they get in a day. And we've had multiple people, and I get touched by the older people, 60- or 70-year-olds for whom our in-person clinical intervention is the only time they have connection during a day or a week. So there's the science, there's the art of connection, and then there are all these little extras you don't appreciate. If a kiddo has to go to a virtual IOP, the mom or dad has to stay home, too. A lot of working-class people cannot do that. It's impossible. It's hard.
So in-person care is crucial to what we do. It's very expensive, and it's regulated, and I'm so glad we have Chelsea, because it's regulated in a different way, too. So it is a lift, but we believe this crisis care is ideally delivered in person.
Guidelight's strategy: In-person PHP and IOP for every payer type
In brief: Guidelight delivers in-person care with a virtual option and accepts Medicare, Medicaid, and commercial insurance. Andy says most peers launched virtual-only programs and took only commercial insurance or private pay. He argues that serving only commercial patients worsens disparities over time, and says the harder model required investors willing to be patient.
Lucas: And that's where we talk about social determinants of health, which are so crucial, as you've outlined. Those can be best addressed if there is a human in the loop, a person who can touch those determinants. Andy, you mentioned in your intro that when you transitioned to Harvard, you moved into the space you're in now and found your people. I want to talk about the business, too. Can you explain your initial business and clinical strategy when you set up the business? What led you to it, and how are you looking to close the gap we touched on earlier?
Andy: 100%. I looked around, and we all face this mental health crisis. The keystone here is PHP and IOP, Guidelight aside. Bridging this dangerous gap is one of the keystones for this behavioral health crisis. So I knew I wanted to do that. I knew I wanted to bridge the gap.
Then I looked at peers that had done that, and one of the problems is that they had bridged the gap, but the care might not have been delivered in the highest-quality way, and they were having trouble scaling. Now I understand there are a lot of regulatory and compliance reasons why these companies have trouble scaling. So I knew I wanted to do PHP and IOP, and I knew that would bridge this gap, but then the idea was: Let's elevate it. How do we elevate this level of care?
Well, we do it in person. The majority of our peers were only launching virtual care, so we do in-person care with a virtual option. The majority of our peers take only commercial insurance or private pay. In order to elevate this, we have to take all insurances: Medicare, Medicaid, and commercial. If you only take commercial and you create the best-quality product you can, over time you're worsening the disparity. People with Medicare and Medicaid don't get the treatment, and people with commercial insurance or who can pay get the best treatment. So we need to do this in person and virtually. We need to make this for everybody.
When you start to think about what that means, it becomes daunting. It's very scary to open in-person clinics. They're expensive. There's a lot of operational complexity. So I was looking for a partner, and I found that in Google Ventures and Triple Aim Partners, partners who build missional healthcare companies and are willing to be patient, because it takes more time to build companies like ours, which take Medicare and Medicaid and are in person. Google Ventures and Triple Aim Partners were excited about it, and we founded the company together. It's been incredible and a huge privilege to have them as partners, because we chose the most difficult mission we could, but one I'm committed to seeing through, and I can't imagine it any other way. If we didn't do in-person and virtual care, if we didn't take all ages of people, if we didn't take all insurances, I don't think we would be on our way to overcoming this crisis.
Why no company has scaled a national PHP and IOP provider
In brief: Andy says the clinical product turned out to be the easiest part. The hard part is cost and the regulatory complexity of each state, each payer within each state, and the level of care itself. In some cases, Guidelight must see patients for free for months before it can be licensed. He says that complexity is why no company has built a scaled national PHP and IOP solution.
Lucas: In terms of lessons learned, you mentioned the cost piece. Was cost a big lesson, that this is expensive for everybody? Was there anything else you learned as you were scaling that made you think, "We should take that into account next time"?
Andy: Totally. The cost: I'm a Texas boy. My parents went to school and did some college. [They] didn't graduate college, though. We're lower middle class or lower class. The amount of money it costs to build an in-person clinic blows my mind. And on the regulatory side, there are some cases where we have to see patients for free for many months before we can even get licensed, so you're swallowing that cost. I never appreciated the expense of doing this until now. It's humbling, but it also drives me to make sure we do this well.
The regulatory and compliance complexities of each state, each payer within each state, and the level of care itself are unimaginable to me. I'm starting to be able to grasp them and get my hands around them, because we have experts like Chelsea working with us. But that is why not one company has built a scaled national PHP and IOP solution like what we're trying to do, and I understand why now. Those regulatory and compliance complexities cost a lot of money, take a lot of time, and add profound operational complexity, too. You need so much expertise and so many solutions that maybe didn't even exist. We're going to talk about Charta, but without AI solutions like Charta, I don't know how we could do this in an affordable way, or that anyone would want to invest in this.
So the big lesson I've learned is that the clinical product, our outcomes, are incredible. We perform better than our peers in Massachusetts on readmission rates by over 70%. We've got a platinum designation from one of our payers. The clinical part turned out to be the easiest thing. What surprises me, and will continue to surprise me, is that the hard things are everything else. Every day, I learn something new and appreciate all the other kinds of expertise a business has: ops, compliance, growth, strategy. It is unreal, and I'm so lucky to be working with the team I'm working with, because it's hard.
Multi-state compliance requirements for PHP and IOP providers
In brief: Chelsea says PHP and IOP compliance spans state-specific regulations, board licensure, telehealth rules, in-person state licensure, behavioral health licensing standards, community health accreditation, survey readiness, medical necessity and documentation, mature minor laws, and abuse and neglect requirements. All of it must then work across 50 states, which she calls a level up from any job in her 19-year career.
Lucas: Chelsea, I want to talk a little more about those specifics, because, as Andy mentioned, there's so much to consider, especially across different states. In terms of compliance, what are some of the specific elements you're looking at, the specific problems you need to address, the growing pains you were working through at Guidelight?
Chelsea: It's funny you say that. I joke often that in my 19-year career, this is the hardest job I've had from a compliance lens. It's not that it's hard; there's so much to digest and have at your fingertips. When Andy talks, you can tell how passionate he is, and he was one of the reasons I came to Guidelight. The passion behind the mission levels up the expectations, so that also puts a lot of pressure on.
The complexity is no different than in any other regulatory landscape in the healthcare space. Healthcare by its very nature is heavily regulated. But you have state-specific regulations. You have board licensure regulations. And because we do in person, you have telehealth regulations and then in-person state licensure regulations. So it's understanding all of those varying complexities. Behavioral health has a separate standard of in-person licensure requirements from a standard primary care or specialist brick-and-mortar practice. And because we are a community health provider certified to those accreditation standards, there's an extra level of meeting the needs of the community.
So it's licensing requirements, clinical standards, understanding the approval process, and regulatory survey readiness, from emergency response plans all the way to medical necessity and documentation. It's the full gamut of understanding not only regulatory compliance at a basic level, but the varying state requirements, and then taking that information and leveraging it across 50 states. Mature minor laws, abuse and neglect: You name it, it's factored in. So it is a bigger breadth than I've had to deal with, because of the IOP and PHP nature. I always joke that I could not have done this job had I not had the prior experience, because it is a level up.
How behavioral health leaders keep the focus on clinical quality
In brief: Andy's approach has three parts: Hire experts like Chelsea, adopt technology such as AI chart review and a scribe, and create forums for frontline staff to flag bottlenecks and inefficiencies. He says AI makes it possible to review 100% of charts instead of the standard 10%, which matters given mental health care's small margins.
Lucas: What you both do, especially Andy as a provider, is ask, "How can I help?" All you want to do is help, but we have these guardrails that make it a little harder to help every once in a while, and that's where Chelsea comes in to make it easier to help. I want to stay with this for a bit, because these challenges are going to persist. They're not going away. They're most likely going to get more stringent as we head into the next decade. Andy, I'll start with you. You've touched on the fact that this can slow down care. How are you innovating to work beyond this? How are you focusing on the question we posed: How can I help?
Andy: I want to spend the majority of my time doing clinical things and making sure our clinical quality is top-notch and that we're constantly improving. That forces you to find quicker ways to deal with all these complexities. One of the things is hiring expertise. That is why we have people like Chelsea. We have so many amazing people on our team who have expertise that I don't have, that I will never have, and, no offense, that I probably don't want to have.
Chelsea: You don't want it.
Lucas: Leave that to Chelsea.
Andy: Exactly. So surrounding yourself with people who are smarter than you in these areas is key. AI or technology solutions are another key. When we think about chart auditing, the standard is around 10% of charts audited. Five years ago, you were hiring a human to audit all these charts and give the feedback. Solutions like Charta turn that into something an LLM can now do for you at scale. Instead of auditing 10% of charts, you could do 100%. Things like that are miracles, because in mental health care, compared with other types of healthcare, we operate on such small margins. That means small amounts of FTE. That means small everything. So I have been so humbled and excited by the technology solutions that have come our way. We have a scribe that has also been magical for us.
So: hiring amazing teammates, and technology solutions. And then the people on the ground, and this is why I still see patients, even at Guidelight, are always giving us little ideas about processes and how things could be better, and noticing where there are redundancies and where there are things we're missing. So you hire the expertise, but never forget to listen and create forums for the people doing the work, to help you understand where things are getting bottlenecked or where there are inefficiencies. That's important, too.
Chelsea: 100%.
Does compliance slow down behavioral health growth? The case for compliance by design
In brief: Chelsea says compliance and regulation haven't slowed Guidelight down, but the regulatory environment does affect how quickly any healthcare organization can grow. Her answer is compliance by design. This year, Guidelight has done its regulatory work up front, learning what each state requires before entering it, even when that means slowing down in the short term.
Lucas: Chelsea, to ask bluntly: When we think about compliance and regulation, are they slowing down care? Are they slowing down Guidelight Health, from your perspective? And how can we get around that?
Chelsea: I wouldn't necessarily say that compliance and regulation have slowed us down, but the regulatory environment absolutely impacts how quickly you can grow in healthcare. The way I view it is compliance by design. If you're building compliance by design from the jump, it allows you to scale faster. If you're missing those components, you have to take a step back to reconfigure and go forward. So this year, we've been focused on, and have become much more intentional about, doing the regulatory work up front: understanding what [each] state requires and making sure our model works before we enter it. That's been our strategy from the lessons learned. Sometimes that means slowing down in the short term, but the goal is always how we can improve to move faster and more responsibly as we scale.
Why 10% chart audits don't scale, and how AI chart review helps
In brief: Chelsea says the usual 10% chart review standard can't keep pace at multi-state scale; matching Guidelight's volume manually would take a team of 50-plus people. AI review of 100% of charts against Guidelight's own rules lets her team drill down by provider, clinic, and form, target education, and see into documentation, where she says the efficacy of care lives.
Lucas: Can you touch on the AI piece, too? It's important not only in clinical care, but administratively. It makes things a little easier in a compliance environment specifically. Why is that AI piece so important when we're thinking about compliance?
Chelsea: Andy touched on it. From a licensure perspective, and for good quality care, you should have an ongoing chart review process for medical necessity that helps drive clean claim billing. 10% is usually the standard. But the reality is that when you're looking at an environment like ours, scaling across 50 states, that 10% becomes almost less than 1% at that big scale. So you need automation, because you would have to have a full team of 50-plus people to handle the volume we're touching. AI automation that can run charts through the traps at 100%, based on the rules you set forth, allows our teams to go in more efficiently, look at what's working well and what's not, drill down by provider, by clinic, by the different forms and metrics, and improve targeted education and see where our documentation sits.
AI has been an interesting unlock in technology for us. When it's done well, it can give more time back to people to focus on the mission. We're hoping to see that same thing with compliance and Charta. Instead of relying so heavily on manual audits, the goal is visibility into documentation. So we're excited about where we are right now and where we're headed in 2027.
For me, the data sits in the medical records. If you can use a tool like Charta to capture all of those metrics and highlight whether we're doing well: The efficacy of what we do sits in our documentation. If we can have visibility into that and drive change based on it, that's the secret sauce to success. And in every company I've ever worked in, not a lot of people are doing chart audits well. Charta is a good tool to help innovate how we use data from the medical record in a meaningful way.
Is the healthcare industry practicing compliance by design?
In brief: Chelsea hears the term often but doubts it is applied consistently, because organizations building in flight get distracted by the next milestone. She says Guidelight's intentional focus on maturity, and on scaling responsibly without cutting corners, is part of what drew her there.
Lucas: I want to double-click on the compliance by design piece, because it lends itself to the proactive approach you've both described throughout our conversation, and to how that can help the patient and the community. Do you feel the industry is thinking more about compliance by design and being more proactive? Is that happening?
Chelsea: I hear it a lot. I don't know how consistently it's being applied. It's great terminology, but it means getting to the root of the operations and building everything into practice. The problem is that we get so distracted by building in flight and getting to the next markers that we often miss compliance by design. That is one of the reasons I was drawn to Guidelight: the intentional thought about maturity and making sure we do this right. We want to scale big, but we want to do it responsibly, and we don't want to cut corners in the process. I just celebrated a year, and I see that in everything we do. So it's been very exciting to build infrastructure here at Guidelight.
How PHP and IOP providers document level-of-care decisions
In brief: Andy says level-of-care decisions draw on LOCUS and Milliman criteria plus clinical nuance, and many referrals come from overwhelmed hospitals, EDs, and outpatient doctors. His clinicians usually make the right call, but the reasoning often doesn't reach the chart. Scribes and AI chart review help documentation reflect the care and take administrative burden off therapists.
Lucas: We have Chelsea to go into the weeds on all of this, as we've heard, but I want to go into the weeds with you, too, Andy, because there are a lot of pieces and details here. You touched on level-of-care decisions earlier in our conversation. I want to use level-of-care decisions and ongoing utilization review as a specific example, since IOP and PHP providers will understand it as a special compliance vulnerability. Andy, how do you make sure the patient is always at the right level of care, especially with the hybrid model you've described?
Andy: 100%. It's a great question. As Chelsea was talking, I'm hearing a switch that's important to name: These chart audits and this compliance work are all monitoring. They're all a proxy for the quality of care we deliver. If we're correctly documenting and keeping record of the things we do, and we're doing amazing clinical care, this is proof of that.
A level-of-care decision is a good example. In surgery or cardiology, if I come in with appendicitis or a heart attack, there's an algorithm for exactly what to do. Humans are more complicated. Someone comes in in crisis: Is this the appropriate level of care? There are criteria. There are LOCUS criteria. There are Milliman criteria. We've studied them ad nauseam. I understand them. And it doesn't stop a hospital from discharging someone inappropriately, an ED from discharging someone inappropriately, or an overwhelmed outpatient doctor from saying, "I can't handle this. You've got to go to PHP or IOP. You've got to go to the ED." That's not in the criteria, but that's probably the majority of the referrals we get.
So we get these referrals, and we know the academic criteria, but then there's all this nuance. We train our clinicians well, and they come to us well trained. When I hear them having these conversations, they're asking all the right questions. They're thinking about all the right things. They understand this person needs more structure, needs group intervention, needs medication management. That often doesn't make its way into the chart. That is so hard for me, because they're doing the right things, and our outcomes show that. And somehow the note isn't signed within 24 hours, or whatever a payer is auditing for in a level-of-care determination doesn't make it into the note.
So we're doing the work well, but we don't do a good job of recording it. Scribes and Charta: These things change the game for us. They make it easier to keep record of the amazing work we're doing. And they take it off the therapist's plate, because some of it is time management, but I'm also sure some part of the therapist's brain is saying, "I went into this to treat people, to get people well. I did not go into this to make sure I included in the note that someone wasn't sleeping well or eating well, if I asked it." I didn't go into healthcare for these things. I didn't go into mental health for these things.
So these solutions change the game for us, because they allow therapists to do what they want to do, and they take away all that administrative burden. I've been surprised: When you look at a note and it doesn't include something, it's easy to assume the mental healthcare worker is not doing their job. I find that to be the minority of cases, whether here at my work or at other companies like Steadfast, Firsthand, or Headway. Most mental health clinicians are doing the good work. We have big trouble recording it. With our scribe, level-of-care determinations are going to stop being much of a thought, because we're already asking all the right questions and determining the right level of care. Recording it is not even going to be a thing, which is probably the best-case situation. We've been trying to solve this without these solutions for decades, and it hasn't worked.
How AI supports level-of-care compliance without making clinical decisions
In brief: Chelsea says AI isn't there to make clinical decisions. It provides visibility into whether those decisions and the documentation are consistently supported: whether notes establish medical necessity, tell the client's story without a long narrative, and show how the patient presented and discharged. She says checkbox-style EMR templates fall short of capturing that story.
Lucas: Chelsea, what does this look like from a compliance perspective? Same question to you on level of care: How is technology assisting there, and how are you leveraging it to stay consistent, but also compliant?
Chelsea: While Andy was talking, I had a full-circle flashback of my entire career, back to the days of paper medical records in hospitals, where you're dealing with these narrative stories that are so long. EMR technology, as it's advanced over the years, has tried to drive that efficiency, and it's falling short, because what you see is a lot of templates. It's a lot of checkbox solutions, and that doesn't capture the story in the documentation, like Andy was saying. Solutions coming in the AI space, like scribes and Charta, allow you to bridge that gap in the middle ground.
The goal with technology isn't to make the clinical decisions. That's one thing a lot of licensed professionals are fearful of. It's not for clinical decision-making. It's to get better visibility into whether those decisions and that documentation are consistently being supported. Does it drive medical necessity? Does it tell the story of the client in a meaningful way, without being a long narrative? And do we have data through that documentation to support the clinical efficacy of what we're doing? Can we show how the patient or client presented, how they discharged, and that whole picture?
Gone are the days when you had large departments of people doing all of these functions manually. Technology and automation are where we're at, and leveraging them in a way that drives efficiencies and meets the need is where we're headed. Because, like you said, documentation requirements are not going away. If anything, they're going to become more stringent. So how do we leverage technology to capture that, so our clinicians can do what they do best, which is sitting at the bedside of the client?
Advice for leaders expanding PHP and IOP programs
In brief: Chelsea says the biggest limitation to success is growing faster than your infrastructure can support, which creates operational and tech debt. She advises investing in AI audit tools so you have data on your pain points. Andy advises humility and active evaluation of AI solutions; he spends a couple of hours each week talking with companies about theirs.
Lucas: It's so great to have you both. We've discussed so many elements of this. It's a multifaceted conversation we can attack from so many angles. I want to close with recommendations for folks who haven't made the turn yet: They're not quite there, but they'd like to be. Chelsea, I'll start with you. What are the main limitations to success for IOP and PHP businesses that other leaders should think about? And what do you recommend for people in the field who are thinking about expanding? How can they act thoughtfully and proactively to navigate all the challenges we've touched on today?
Chelsea: What I've learned in the last seven years in health tech startups, because that's where you see the answer most visibly, is that the biggest limitation to success is growing faster than your infrastructure can support. I see that happening time and time again. Then you have a lot of debt, whether it's operational debt or tech debt: You name it, there's debt. There's tremendous demand, especially in the behavioral health space, to scale and be visible and be that next shining star. So naturally, there's pressure to move quickly. But PHP and IOP, and any other specialty for that matter, is a complex healthcare business. As you add clinics and states, that complexity grows.
I get asked all the time, from a compliance lens, what technology, especially in the AI space, we're looking to leverage. And I continue to repeat: You've got to invest in your AI audit tools. If you're not doing automation and you're not getting data, you're not going to see where your pain points are. If you can use that information to put policy and governance in place, to build operations, to build that infrastructure, then you can see where you're headed. You have your North Star, and you can see your progression. But if you don't have that data, you're running blind, and that makes it difficult when you're building infrastructure.
Lucas: You mentioned this earlier, and I want to highlight it because it's crucial. We sometimes feel pressure to go fast, especially with technology, because we feel it brings all these benefits. But oftentimes, as you've highlighted, it's important to take a step back and make sure the infrastructure is there for us to advance. Andy, you've said this, too: There is so much cost involved and so much to consider. It has to be done thoughtfully. Sometimes slowing down is important. What would you recommend leaders look at? What's your perspective for the future?
Andy: Such a good question. The future requires more of us. If this were easy, someone would have done it by now. We have not overcome this mental health crisis. It grows in many ways, especially for kiddos. So the future requires us to think creatively, to humble ourselves, and to acknowledge that we're not quite there yet.
For me, I spend probably a couple of hours every week demoing or talking to companies about their AI solutions. A lot of them don't make any sense. A lot of them, I don't think, will scale. And a lot of them are incredible. I do that because I know enough, and my ego has been beaten down enough by this crisis, to know that it's going to take novel solutions and these smart technologies to overcome this crisis. If you're a missional founder or a missional healthcare provider, you've upped your difficulty, because you will get reimbursed [the least], and you will treat amazing but also very sick patients. So have some humility. Looking at all the technologies out there and starting to understand them, to be dangerous enough to evaluate them, is the only way we're going to get this done.
What's next for Guidelight Health in 2027
In brief: Guidelight operates in five states and expects to pass 20 clinics after two years of operation. Andy plans to keep expanding the virtual program, especially to rural areas and people who speak English as a second language, and hopes for more technology that removes administrative burden from therapists. The goal is to be in all states, virtual and in person, and to treat everyone.
Lucas: In that vein, what's next for Guidelight? What's your path as we head into 2027?
Andy: We will continue expanding. We're in five states now. We're going to jump past 20 clinics. We've only been operating two years. It's going so fast. We'll continue expanding our virtual program, too, especially to rural areas and to people who [speak] English as a second language. And I hope we have more and more technology solutions for the administrative burden that keeps our amazing therapists from doing the work they love doing. I hope I continue to see these novel, creative approaches to the administrative burden, which has only deepened the mental health crisis. There will never be enough psychiatrists in my lifetime to treat everyone we need to treat. There will never be enough therapists in my lifetime. So when we take away the work of the notes with the scribe or something, it almost doesn't feel real. I hope we continue finding technologies that help us complete the mission. We want to be in all states. We want to be virtual and in person, and we want to treat everyone. We want everyone to have a seat at Guidelight.
Closing
Lucas: Chelsea, that means more compliance work for you.
Andy: It does.
Chelsea: Happy to report. [Up] to the challenge.
Lucas: Happy to report you'll have a job for years to come. Andy and Chelsea, it's so great to have you both on. Thank you so much for taking time for us today, and thank you to our audience for being here. I also want to thank Charta Health for bringing us together for this wonderful conversation and for sponsoring today's webinar. Thank you for joining us today, and I hope you have a great rest of your day.
Andy: Thank you, sir.
Chelsea: Thank you.
Frequently asked questions
What gap do partial hospitalization and intensive outpatient programs fill?
They fill the gap between the ED or inpatient hospitalization and traditional outpatient therapy. Andy calls it the most dangerous gap in healthcare because so many people get lost there, and he describes this level of care as a hospital without the bed.
Why is it hard to scale a PHP or IOP provider across states?
Each state, each payer within each state, and the level of care itself carry their own regulatory and compliance requirements. Andy says that complexity, plus the cost of in-person clinics and of seeing patients for free before licensure in some cases, is why no company has built a scaled national PHP and IOP solution.
What is compliance by design in healthcare?
Chelsea describes compliance by design as building compliance into operations from the start rather than reconfiguring later. At Guidelight, that means doing regulatory work up front and confirming what a state requires before entering it, which she says allows the organization to scale faster.
Is a 10% chart audit enough for behavioral health compliance?
Not at multi-state scale, according to Chelsea. 10% is the usual standard, but matching Guidelight's volume manually would take a team of 50-plus people, so Guidelight uses AI to review 100% of charts against the rules it sets.
Does AI make level-of-care decisions in behavioral health?
No. Chelsea says the goal of AI is visibility into whether clinical decisions and documentation are consistently supported, not clinical decision-making. Andy says scribes and AI chart review help notes capture the level-of-care reasoning his clinicians already apply.
What is the biggest mistake behavioral health organizations make when expanding?
Chelsea says it is growing faster than your infrastructure can support, which creates operational and tech debt. She advises investing in AI audit tools so you have data on your pain points before building policy, governance, and operations.
