Is rehab covered by insurance?

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Typically, a good health insurance policy will defray some, but not all of the costs of drug rehab. The deciding factors vary by company and policy. Here are some general guidelines.

In Network or Out?

Policies that provide services based on a network model usually will severely limit reimbursement for out of network services, particularly drug rehab. If they offer an in-network facility, it’s sometimes tough to “win” a slot or match up schedules.

This doesn’t necessarily mean your HMO won’t pay anything for out of network treatment, just that they may pay less. In almost all cases, insurance companies won’t pay every last charge, so it becomes a matter of figuring out what percentage of the overall cost you (or your family) will have to pay.

Type of Addiction

The substance someone is addicted to also makes a difference. Insurance companies generally base their reimbursement policies on diagnosis, and addiction treatment falls under mental health care and then by type of addiction. That means an accepted diagnosis, like depression or alcohol abuse syndrome, is more likely to be covered than, say, a shopping addiction.

It helps to know whether your particular addiction falls within the Diagnostic Services Manual used by the psychiatric profession. It also helps to have a solid diagnosis by a professional who is recognized by the insurer.

Some addictions are treated with an established course of therapy, one that is approved and licensed. For example, someone receiving methadone for heroin addiction will be enrolled in a clinic program backed by regular physician input and a standardized treatment plan. These are accepted more readily by insurance companies, as contrasted with a marijuana addiction, where many facilities will offer services and may or may not follow a set course of treatment.

Length of Treatment

Although addiction specialists know that 90 days or more of rehab are needed to give patients a good chance at recovery, insurance companies often set limits which don’t match up. Policies may have a dollar maximum set or a time limit set or both.

Generally, an insurance policy that pays anything will pay for detox, especially on an inpatient basis. But this is only the first step on the road to recovery. Follow up care using drugs to fight cravings or treat other mental issue problems (anxiety, depression) are usually covered as well.

Unfortunately, once detox is completed, the situation becomes one of “how long?” From the insurer’s point of view, paying to house someone for months while in rehab is just too expensive. The cost can be many thousands of dollars. Partial payment is more common than anything approaching a full ride.

How to Find Out about Your Policy

Start with the rehab center you are considering. Call them and explain the situation with your insurance company and policy information in hand. They are usually familiar with what is and isn’t billable and can investigate your insurance for you.

Do not accept some general answer like, “We’ll do our best.” As much as possible, you want to get an answer to rely on.

The next thing to do is talk to your agent (or another agent for your insurer). Ask them to bring up your policy and give you the relevant section or language. You can also ask whether pre-approval is necessary and whether a particular rehab facility is covered (or what options you have). If an agent cannot answer your questions, ask them for a contact person at the parent company.

One other source for information is whoever handles insurance claims at your workplace. In larger companies, it is common to have a liaison who deals with medical insurance matters. They may have already had other employees who needed rehab and will be very familiar with the policies your company purchases. Again, if you do not get solid answers, ask for a contact person at the insurance company.

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