Does Insurance Cover Residential Treatment?

How Much Does Residential Treatment Cost?

Cost of Residential Treatment

The cost of residential treatment varies between each Residential Treatment Center (RTC). The spectrum of cost may range anywhere from free (this is very uncommon) to tens of thousands of dollars per month.

And if you are paying out-of-pocket (which means insurance is not covering the cost of the RTC), there are numerous factors that could affect the total cost:

• Length of stay – although 30 days is considered the typical (or average) length-of-stay in a residential treatment center, that may not be true for everyone. Depending on the issue(s), and severity of symptoms/behaviors, patients may reside in residential treatment for a mental illness from anywhere from two weeks to a few months.
• Additional services – some treatment facilities will charge additional fees for certain services such as medication management, detoxification support, outings, special dietary requests, etc.
• Location of RTC – although a residential program on the beach and a residential program in an inner-city location may provide the exact same services and care, the one on the beach will likely be much more costly.
• Amenities – some treatment centers provide amenities available to patients at an additional cost such as a swimming pool, massage therapy, nutrition counseling, or an on-site gym.
• Partial coverage by insurance – depending on the percentage of cost covered by insurance (if any), the amount a person may be required to pay out of pocket can vary drastically. Medicare, Medicaid, private insurance, and military insurance typically have the best coverage rates when it comes to RTCs.

Although RTCs can be very costly, some programs may offer options for financial aid, assistance, and/or financing plans.

Insurance Coverage of Residential Treatment Centers

Although working with insurance in an attempt to have them cover all or a portion of the cost of residential treatment can be a huge headache, not everyone is able to pay out-of-pocket.  Thus, it is important to know the likelihood of insurance covering the cost, and how to best navigate the process.

The first step to finding out if your insurance will cover your stay at a residential treatment facility is to call your specific insurance plan’s provider and request information regarding mental health and/or addiction treatment options. Or, if you are already in contact with a treatment program, ask their admissions representative to check and verify your coverage. You can also ask for them to estimate the total cost of care, how much your insurance will likely cover, etc. without being required to make any commitments.

What to Do If Insurance Denies Coverage

Health insurance companies, for numerous reasons, can deny treatment of mental illness.  Insurance companies use a variety of methods to determine whether a type of treatment is considered “medically necessary” (see below) or a part of your benefits plan.  If you are denied coverage for residential treatment, there are options to appeal the denial. Filing an appeal can be tedious, but in many cases, proves successful.  Contact your insurance plan and ask about the internal appeals process.  If you continue to be denied coverage, you can contact your state insurance division for additional help.

Important Insurance Terms

Navigating the world of insurance coverage as it pertains to residential treatment can be overwhelming.  Being knowledgeable about specific terms can help ease the process a bit.

• Medical necessity criteria – these are standards used by insurance plans to determine whether the treatments or health care services you are seeking (whether recommended by a mental health/medical professional or not) are necessary, reasonable, and appropriate. If the insurance provider deems the treatment meets the above requirements, the requested care is considered “medically necessary” and will be covered.
• Utilization review – also referred to as “utilization management.” This is the process by which insurers decide whether the requested mental health care is medically necessary (based on the medical necessity criteria). This means is the care considered to be the most efficient and “in line” with accepted medical practice. In line with accepted medical practice refers to the specific mental health treatment or service being proven to be effective based on scientific evidence.
• Prior authorization, also known as pre-authorization, pre-approval, pre-certification, or prior approval, is a type of utilization review that occurs before the services have begun. Prior authorization occurs when you, or more commonly, your service provider, contact the health plan to seek approval of payment for the treatment, service, etc.
• Step therapy is a type of prior authorization in which the insurer requires you try a less expensive treatment or service before you can be approved coverage of the original treatment/service.