According to the 2013 National Survey on Drug Use and Health, an estimated 20.2 million Americans needed treatment for substance abuse but did not receive it in that survey year.
Each year, only a fraction of those who need treatment actually get it, so those in rehab should be respected for their courage and commitment.
Paying for treatment should never be a barrier to treatment. Individuals who have health insurance have options, but it is important to figure out exactly what they are. Each health insurance plan sets forth the terms of its coverage but must follow federal and state laws when creating plans. For this reason, it is important to consider the protections that the law provides in the context of treatment for a substance use disorder and any co-occurring mental health disorders.
How Laws Are Improving Coverage
The Affordable Care Act (ACA), passed in March 2010, changed the health insurance landscape in America. Speaking broadly, a person’s healthcare plan either does or doesn’t fall under the ACA (often referred to as Obamacare). Plans that fall under the ACA confer numerous rights and protections to the insured.
- Even plans that do not fall under the ACA have to follow federal laws, such as the Mental Health Parity and Addiction Equity Act (MHPAEA). The MHPAEA requires that a group health insurance plan must provide an equal level of coverage for the treatment of substance use disorders and mental health disorders compared to medical and surgical benefits. The act, in letter and spirit, ensures that if a group health plan is going to cover treatment for diseases, like heart disease, it cannot treat mental health disorders and substance abuse disorders differently.
ACA plans include a group plan that an individual or family gets through work, a family plan bought in the marketplace (also called the healthcare exchange), an individual plan bought in the marketplace, and public health insurance plan (e.g., Medicaid). Individuals with an ACA plan are entitled to be covered for some forms of substance abuse treatment. As the Office of National Drug Control Policy explains, treatment for substance use disorders is considered one of the 10 essential benefits under ACA plans. In other words, every ACA plan (private and public) must provide coverage for some type of substance use disorder treatment; however, the extent of coverage and the type of treatments covered vary. For this reason, it is critical for every insured person to have a copy of the summary plan description (SPD). The SPD lays out the plan’s benefits and the insured’s rights under the health insurance plan.
The SPD will include the terms for coverage of claims for the treatment of substance abuse or mental health disorders.
Each rehab center provides a different array of services, and coverage will vary. For instance, a rehab center may offer different forms of therapy, such as individual counseling, group counseling, family therapy, arts and music therapy, and animal-assisted therapy (e.g., equine-assisted therapy). A health insurance plan may, for instance, cover more traditional forms of therapy, such as individual and group counseling. The rehab program can still provide other forms of therapy but will charge the recovering person directly. In this way, a rehab stay can be paid for partially with insurance and partially out-of-pocket.In some cases, an insured person may want to only receive those services that are covered, to limit out-of-pocket expenses. The rehab center will design a treatment plan that does not compromise core policies while at the same time factoring in the client’s needs. The rehab process is a transparent one; there should be no communication issues regarding services and paying for treatment.
Keep in mind that health insurance companies are regulated and their processes are standardized. The employees in a rehab center’s billing department have valuable institutional knowledge, gained from working with insurance companies. An insurance coordinator at a drug rehab center can help incoming clients and family members understand how their insurance coverage works, including what services will be covered and at what percentage. While an insurance coordinator can provide valuable help, it is still a good idea to know your rights, as an insured person, and to understand how the claims process and appeals process works (should a claim be denied).
- How Rehab Bills Get Paid
The following is a medical billing overview that sheds light on how rehab services get paid.
- The drug rehab provides one or more treatment services and the internal billing department assigns the correct codes to the service. The codes are standardized, and the process must comply with state and federal laws.
- The drug rehab’s billing department then forwards a bill of services to the health insurance company.
- The insurance company reviews the claims included on the bill of services and determines which, if any, treatment services it will pay to the rehab (or reimburse the insured, if the insured paid out-of-pocket and is now filing a claim for reimbursement).
- After a claim is reviewed, the insurance company will provide both the rehab center and the insured with an explanation of benefits (EOB). The EOB will include important information, such as the dates of service, treatment services claimed, charges, the dollar amount of any patient financial responsibility (e.g., a copay), and any amount that the rehab is being paid on the claims. If the rehab is being paid, the insurance company will usually make a payment shortly after the EOB, typically by an electronic fund transfer.
The above information reflects the steps involved in the claims process related to the treatment of substance use disorders and mental health disorders. An individual who has a substance use disorder and a co-occurring mental health disorder is best advised to seek treatment at a rehab center that can accommodate co-occurring disorders. Combining treatment under one roof can ensure that all treatment tracks are properly integrated. There is also an advantage from the point of health insurance. If treatment occurs in one rehab center, the coverage process may be more efficient.
- Understanding the Appeals Process
If a health insurance company refuses a claim for rehab services, the insured has a right to file an appeal. The insurance company will provide information to the insured on how to file an appeal.
It can help to know some helpful tips when a claim for a rehab service has been denied.
- Review the EOB to understand why the claim was denied. The insurance company will have listed codes that reflect the reason for the denial. The EOB should include a key for the codes that will help the insured to interpret the reason for the denial. If it is still not clear, the insured has the right to contact the health insurance company and ask a representative to explain in plain terms.
- If it appears that a simple error is the reason for the denial, ask the rehab center to fix the error and resubmit the claim to the insurance company.
- Review insurance company documents, such as the SPD, medical policy bulletin, or medical guidelines. The health insurance company is required by law to provide the insured with an SPD. These documents can help the insured to formulate an argument as to why the claim should be covered. Documentary evidence will also be needed.
- If the claim was denied for a substantive reason, the insured is going to need evidence to prove why the claim should be covered. For example, the insured may have to prove that the rehab treatment provided was medically necessary. To do so, it will be helpful to provide documents, such as a copy of the medical records that show a diagnosis, a letter from the treating clinician, a prescription, or any other relevant documentation.
- The last step in the filing process is to submit the paperwork. It is usually advisable to use the insurance company’s standard appeals form, so it’s a good idea to get one as early as possible.
- It is critical to stay on top of the process. Follow up with the insurance company regularly until a decision is made on the appeal.
- If the appeal is denied, ask the insurance company how to file a request for an external review. During an external review, a third party evaluates the claim and the appeal. An external review helps to remove any bias, unfair practice, or errors that may have occurred during the insurance company’s review of the appeal.
One of the best pieces of advice for working with an insurance company is to view the process as collaborative rather than adversarial. An insured person and an insurance company have a contractual relationship, so ultimately, the terms of the contract and their interpretations will govern the process. An insurance coordinator at a rehab center can help to set an insured’s expectations, so there are no surprises.
Keep in mind that rehab centers repeatedly bill for the same types of services, and they tend to know if those services are covered. You don’t have to navigate the insurance coverage process by yourself; the rehab center and insurance company can help