Table of Contents

The opioid crisis has been marked by a rapid increase in the overuse, misuse, and abuse of opioids, leading to deaths. Luckily, opioid addiction or opioid use disorder (OUD) is a treatable medical condition. Treatment is essential to prevent overdose or even death and increase the chances of long-term recovery.

Navigating insurance coverage for drug rehabilitation can feel overwhelming. It’s full of challenges that can prevent timely, effective care. This article will provide clarity on insurance coverage for opioid addiction treatment. We will discuss laws, types of plans, and steps to verify coverage.

If you or your loved ones are struggling with opioid addiction or OUD, please reach out to us at Nirvana Recovery for immediate help. Our compassionate team of professionals offers addiction treatment and insurance guidance.

Understanding Insurance Coverage for Opioid Addiction Treatment

Why Opioid Addiction Is Treated as a Medical Condition

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5) medically classifies opioid use disorder. OUD is a medical condition characterized by a problematic pattern of opioid use resulting in significant distress or impairment. It’s indicated by meeting at least two of several criteria within 12 months. These criteria include:

Withdrawal
Tolerance
Continued use despite negative consequences
Unsuccessful attempts to cut down
Taking more opioids than intended

Medically supervised treatment of opioid use disorder is crucial for safe, effective recovery. Here are more reasons why it’s important:

It reduces the risk of overdose and increases the chances of survival after an overdose
FDA-approved medications like methadone, buprenorphine, and naltrexone ease withdrawal symptoms and curb cravings

The Impact of the Affordable Care Act (ACA)

The Affordable Care Act (ACA), also known as Obamacare, is a healthcare reform law enacted in 2010 to do the following:

Expand health insurance coverage
Regulate the health insurance market
Control healthcare costs

The ACA mandates health insurance plans to include substance use disorder (SUD) services in their plans. The act also ensures that insurance plans do not impose more restrictive limits on SUD treatment compared to other health services.

The ACA mandates that health insurance plans must cover ten categories of essential services. They’re collectively known as Essential Health Benefits (EHBs). One of the categories is mental health and SUD services, including behavioral health treatment.

Federal Parity Laws

The MHPAEA was enacted to ensure equal treatment for mental health and SUD services compared to medical and surgical treatments in insurance plans.

MHPEA mandates insurance plans to provide mental health and SUD benefits on equal terms with medical or surgical benefits. Therefore, insurance plans cannot treat mental health or addiction services differently from other medical services. Here’s what insurance plans cannot impose on mental health or SUD services:

Higher cost-sharing. This means no higher deductibles, copayments, or coinsurance.
Restrictive limits. Insurers can’t limit SUD services to a fixed number of days or visits, while they cover unlimited visits or stays for physical conditions.
Restrictive medical necessity criteria. Similar criteria must be applied to both substance use disorder treatment and other medical services.

MHPAEA further provides that health plans must disclose their coverage policies for mental health and SUD treatment. This makes it easier for you to understand and compare coverage.

Types of Insurance That May Cover Rehab

Private Health Insurance Plans

Your employer may offer employer-sponsored insurance plans as part of your benefits package. Your employer covers a large share of the premium, reducing the amount you’ll need to contribute.

Individual marketplace plans are bought through federal or state-run exchanges. Plans come in tiers with different balances of premiums vs. out-of-pocket costs. How much you pay depends on your plan’s tier and your income.

Network Restrictions and Pre-Authorization Requirements.

Insurers usually negotiate with a group of healthcare providers and facilities (networks) to provide plans at discounted rates. In-network care has lower out-of-pocket costs. Out-of-network care costs more or may not be covered at all.

During prior authorization (pre-authorization), your insurer reviews and approves certain treatments, tests, or prescriptions before they’re provided. It can be limiting since not all pre-authorization requests are approved.

Government-Sponsored Programs

Medicaid must cover the following treatment services for OUD federally:

Medication-Assisted Treatment (MAT): Involves combining medications like buprenorphine, methadone, and naltrexone with counseling. Most states have coverage for at least one of the three medications.
Behavioral Health Services: Includes counseling, detox, inpatient/outpatient rehab, and peer support. More services may be covered, depending on state decisions.

Medicare for Inpatient, Outpatient, and MAT

Inpatient: Medicare Part A covers hospitalization for substance use disorder if your doctor finds it medically necessary. This includes detox, therapy, and medication in a hospital or rehab.
Outpatient: Covered services include counseling/therapy, screenings, partial hospitalization programs (PHPs), telehealth services, and services at opioid treatment programs (OTPs).
MAT: Includes methadone, buprenorphine, and naltrexone when provided through SAMHSA-certified OTPs that are enrolled in Medicare.

Military and Veterans Benefits

TRICARE for Opioid Addiction Rehab

TRICARE covers a range of SUD services as long as they’re medically necessary and administered by TRICARE-authorized providers. These services include the following:

Inpatient services for emergencies and planned rehabilitation
Detoxification
PHPs
Intensive outpatient programs (IOPs)
MAT, including through OTPs and office-based opioid treatment
Mental health therapy, integrated with SUD care

Veterans Affairs (VA) Programs

The following are services provided by VA programs to veterans with substance use issues, including OUD:

Medically managed detox and stabilization
MAT with methadone, buprenorphine, and naltrexone
Counseling and behavior therapies
IOPs
Self-help groups
Residential care options
Relapse prevention and continuing care
Specialized programs for women, returning combat veterans, and homeless veterans

Short-Term or Limited Plans

Short-term or limited-duration plans are temporary insurance policies designed to bridge gaps in coverage. They’re usually cheaper and can start quickly. However, they don’t follow ACA mandates and offer less protection. Here are more limitations and exclusions:

They don’t cover any condition you had before enrollment (pre-existing conditions)
Your claim may be denied later, even if you were previously approved
They aren’t required to include ACA-mandated services like mental health counseling and SUD treatment or prescription drugs
While premiums are lower, deductibles are very high, and the plans may consist of daily payment caps and annual or lifetime benefit limits
They cover up to three to four months in a year, and insurers don’t renew them once they expire
Some plans rely on narrow networks or none at all

What Drug Rehab Treatments Are Typically Covered

Inpatient & Residential Treatment

Coverage spans 30 to 90 days, depending on your insurance plan. While ACA and MHPAEA prevent dollar-based annual or lifetime caps on essential benefits like mental health or SUD treatment, it doesn’t prohibit numeric day limits. Plans may have annual or lifetime caps on treatment days or services. For example, a maximum of 30, 60, or 90 inpatient days per year.

Insurance coverage is often determined by whether treatment is medically necessary. Insurers may require documentation of the following:

Severity of addiction
Failed treatment attempts
Health or safety risks without inpatient care
Withdrawal complications

Outpatient Programs

IOPs offer structured treatment for people who don’t need round-the-clock care. It allows them to live in their usual surroundings and continue their daily activities while receiving treatment. IOP programs usually last for 9-19 hours per week, with daily visits of 2 to 3 hours, 3-5 days a week.

PHPs are more intense than IOPs, but they still allow you to spend the night in your usual surroundings. They usually last for at least 20 hours per week, with daily visits of 6 to 8 hours, 5-6 days per week.

Medication-Assisted Treatment (MAT)

Here’s coverage information for the three main medications approved in MAT:

Buprenorphine: Covered by all Medicaid programs
Methadone and Naltrexone: Coverage varies across states; some programs exclude both medications

Many state Medicaid plans require pre-authorization, limit quantities, or have lifetime caps, even for buprenorphine.

Including counseling in Medication-Assisted Treatment [MAT] creates a holistic approach that addresses the mind and body. Medications in MAT significantly stabilize brain chemistry, control cravings, and ease withdrawal symptoms. However, without counseling, they can’t address the psychological and social triggers of addiction.

Counseling & Behavioral Therapies

Individual therapy involves one-on-one sessions with a licensed counselor or therapist. You may use evidence-based approaches, including:

Cognitive behavioral therapy (CBT)
Dialectical behavior therapy (DBT)
Motivational interviewing (MI)
Contingency Management (CM)

They’re most effective when used with medications in MAT.

Group therapy involves facilitated group sessions where members benefit from the following:

Shared experiences
Shared coping techniques
Developed peer support

Family therapy involves sessions with partners or family members. The aim is to repair relationships, improve communication, and create a supportive environment for recovery.

Aftercare & Relapse Prevention

Most insurance plans do not cover sober living because the residences are considered supportive housing rather than formal medical treatment. It’s treated as a transitional living arrangement, not an essential health benefit. However, insurance may cover therapy, MAT, or other clinical services received while residing in a sober living facility.

Insurance plans usually cover follow-up counseling sessions when provided as relapse prevention and aftercare services. This coverage relies on medical necessity and is provided when the services are considered part of ongoing treatment.

How to Check If Your Insurance Covers Opioid Rehab

Reviewing Your Insurance Policy

Here’s how you can locate substance use disorder coverage in your plan’s documents:

Go through the Summary of Benefits and Coverage (SBC). This document outlines the types of services covered, such as inpatient, outpatient, and counseling. It also contains information about applicable deductibles, copays, and visit limits.
Review the Evidence of Coverage (EOC) document. It provides details on what’s covered and existing limits or conditions. Look for sections titled “Behavioral Health Services” and “Mental Health and Substance Use Disorder Treatment.”
Know your parity rights. The MHPAEA mandates insurance plans to cover SUD care as they would medical/surgical services. This applies to costs, visit limits, and authorization requirements or rules.

Contacting Your Insurance Provider

Ask your insurance questions about the following:

Coverage Limits

Does your plan set limits on sessions, treatment days, or overall service coverage?
Are there caps on specific services, like inpatient rehab or outpatient counseling? What happens when those caps are reached?
Are there differences between essential health benefits and other services in terms of coverage limits?

Deductibles

What is your annual deductible, and does it apply to a particular type of service?
How much have you paid toward your deductible this year, and how close are you to meeting it?
Once you meet your deductible, how does coverage change?

Copays

Are there different copay levels for in-network vs. out-of-network services?
After meeting your deductible, will you need to pay a copay for a particular service?
How much is the coinsurance for services like outpatient counseling or medications?

Getting Pre-Authorization

Most insurance plans require pre-authorization. Here’s why:

Insurers need to verify that the requested/proposed treatments are medically necessary and safe
It helps manage high healthcare costs by ensuring that expensive services or medications are appropriate
It protects the insurer from covering unnecessary services, redundant testing, or inappropriate medication use

Before requesting pre-authorization, confirm that it’s required. Review your plan documents or ask your provider to do so on your behalf. Find out if the service you’re interested in requires pre-authorization under your policy.

For most in-network care cases, your provider will submit the pre-authorization request on your behalf. So, you don’t have to worry about the paperwork or getting everything right in your documentation. However, out-of-network care may require you to request pre-authorization yourself.

Using a Rehab Facility’s Verification Service

At Nirvana Recovery, we can handle insurance verification on your behalf. Let us take care of this for you if you’re not sure where or how to start. We have the technology and a team with expertise in using it to retrieve the information you require securely. We will need basic details like your name, date of birth, and ZIP code.

Letting us handle the verification on your behalf speeds up the process and avoids manual errors. You’ll get verification details without the hassle or risk of getting misinformation. Our real-time monitoring of active coverage helps avoid surprises from changes in your plans, deductibles, or out-of-pocket responsibilities.

Common Insurance Challenges and How to Overcome Them

Denial of Coverage

The following are common reasons for the denial of coverage:

Lack of medical necessity. Your insurer may determine this if your documentation doesn’t justify the treatment’s necessity.
The facility or provider is out-of-network. In this case, your insurer may respond with a denial or partial coverage, even if your treatment was authorized.
Incomplete or incorrect information. Your request may contain misspelled names, wrong birth dates, or missing documentation and essential reports.

Here are the steps for appealing a denial of coverage:

Read the denial notice carefully to ensure you understand the reason for the denial
Support your appeal with progress notes, treatment plans, and a medical necessity letter from your provider
File a formal written appeal within three to six months of your denial

Limited Length of Stay Coverage

You can negotiate extensions of a limited length of stay with your insurer. Here’s how:

Document your medical necessity thoroughly. Ensure your clinical team conducts a comprehensive assessment. Keep detailed progress notes and ensure the documentation of any dual diagnosis.
Work with your provider and case managers to prepare an extension request. Ensure your clinical team references industry-standard criteria like the American Society of Addiction Medicine (ASAM) Criteria.
Frame your request as based on medical necessity rather than convenience. Include the initial treatment plan, clinical progress, and remaining goals, and risks if care ends.

Out-of-Network Restrictions

Out-of-network restrictions limit you from accessing care from out-of-network facilities or providers. If this care is medically necessary, you can request an exception for specialized treatment centers. Your request for a network exception will be called a single-case agreement (SCA) or a gap exception.

A gap exception allows an out-of-network provider or facility to be treated as in-network for a single case. This way, you can access specialty treatment at in-network rates. This may be helpful when no in-network provider or facility has the required expertise or availability.

Do the following to request this exception:

Check if your plan offers any out-of-network benefits or allows exceptions
Find out if there are any rules or restrictions regarding network exceptions and documentation
Explain why only your requested out-of-network facility is appropriate

Myths and Misconceptions About Insurance and Rehab

“Insurance Never Covers Rehab”

The federal law ensures that many health insurance plans cover substance use disorder services, including rehab. SUD treatment is one of the 10 Essential Health Benefits (EHBs) of the ACA that must be included in plans. Thus, coverage can’t exclude rehab, inpatient or outpatient services, counseling, or medication management.

The MHPAEA further mandates equality between the coverage of SUD services and medical or surgical services. Insurers can’t charge higher copays or impose stricter limitations for addiction treatment.

“You Have to Pay Everything Upfront”

If you’re insured, you’ll have to deal with cost-sharing rather than a full upfront payment. Many rehab facilities also offer payment plans or sliding scales.

Cost-sharing includes deductibles, copays, and coinsurance, depending on your plan. You’re not required to pay the full treatment cost upfront. If you don’t have insurance, you’ll still benefit from a rehab’s payment plans, sliding scale fees, or sponsorships.

“Only Severe Cases Are Covered”

Most insurance plans also cover early intervention rather than only severe cases. The ACA mandates substance use disorder screening and brief intervention services as part of standard coverage. Thus, early-stage support is covered and required by federal law.

The Screening, Brief Intervention, Referral to Treatment (SBIRT) model is encouraged and usually covered as preventive and early intervention care. Addressing SUD issues early prevents their progression and increases the chances of long-term recovery.

Your Recovery Journey Made Easier with Nirvana Recovery

Insurance verification doesn’t have to be overwhelming. With a reliable resource like Nirvana Recovery by your side, you’ll find that insurance can be easy to navigate. We provide resources like this article to discuss most of the things you may find difficult to understand or didn’t know about. Today, you know more about insurance coverage for drug rehab treatment of opioid addiction.

At Nirvana, we help you navigate insurance while focusing on recovery. This article explores different aspects of insurance coverage for opioid addiction treatment. You can now take the first step toward treatment without fear, thanks to the information you have. Contact our team at Nirvana Recovery today for more information about insurance coverage for drug rehab treatment of OUD.

Frequently Asked Questions (FAQs)

How Do I Find Out If My Rehab Is In-Network?

You have to contact both your insurer and rehab because a facility may consider itself in-network, while the insurer has a contract with only certain providers or services. Prepare the following before you make the call:

Your member ID and group number
Your plan name
The facility name, address, and contact

Will My Employer Know If I Use My Insurance for Rehab?

No, not automatically. However, in some instances, they may find out limited information. The Health Insurance Portability and Accountability Act (HIPAA) and the federal regulation 42 CFR Part 2 protect against the sharing of your treatment information.

How Much Will I Have to Pay Out-of-Pocket?

It depends on the following factors:

Your plan type
Whether the provider is in-network
The level of care (inpatient, outpatient, IOP, PHP, or MAT)
Your plan’s deductible, copay, coinsurance, or out-of-pocket maximum
Whether your pre-authorization request is approved

What Is “Medical Necessity” and How Is It Determined?

Medical necessity is your insurer’s determination that a service, test, or treatment is needed to diagnose or treat you.

Medicare and Medicaid have official guidance about “reasonable” and “necessary” services and how to evaluate them. Private insurers write their own medical necessity policies.

Can I Switch Insurance Plans to Get Better Rehab Coverage?

Yes, you can. When you can switch and how depends on your insurance type. Let’s have a look at when you can switch insurance plans.

Employer-Sponsored Plans: Only during your employer’s open enrollment
Marketplace Plans: During the federal/state open enrollment
Medicaid: Whenever you’re eligible, subject to state rules

ketan blog

See Full Bio