Insider’s Guide: Getting Insurance to Pay for Residential Treatment

imagesThis is our second installment on how to get insurance to pay for residential treatment and therapeutic programs. Below is some great information to help you beat the insurance companies at their own game. Insurance companies count on your ignorance, laziness and distractibility to avoid paying for services they are legally obligated to cover. 

With the Affordable Healthcare Act and the Mental Health Parity Act in full swing it’s time to learn how to get the most out of the insurance you pay for. We’ve included some tricks, strategies and how-to’s to help you out. Though we’re focusing on Residential Treatment for our discussion here, this info is applicable to therapeutic programs like wilderness programs, therapeutic boarding schools and intensive outpatient programs.

Ok, let’s get started with some basics… 

What If I Need Additional Help?

First, read through everything below. These strategies are time consuming and require steady attention but they are not impossible. If you still don’t feel confident in holding your insurer accountable, contact us for a free consult and we’ll help you figure out how to move forward. 

What is the Insurance Company’s Criteria for Residential Treatment?

…Or more importantly, how does an insurer define residential treatment? Each insurer has their own definition but most have virtually identical criteria. For our purposes, residential treatment is defined as specialized mental, behavioral health or substance abuse treatment that occurs in a residential (overnight) treatment center where the provider is responsible for clinical service, safety, shelter, and food.

Licensure differs by state, but these facilities are typically designated either as residential, subacute, or intermediate care facilities and may occur in care systems that provide multiple levels of care. Residential treatment is 24 hours per day and often requires a minimum of one physician (or psychiatrist) visit per week in a facility based setting. 

What Specific Criteria Do They Look For?

Now, let’s drill down a bit more and look at some of the more common criteria requirements insurance companies are looking for when determining whether to pay for residential treatment to a struggling teen or young adult. 

  • Was there a sincere attempt to first use evidence-based outpatient therapy in the home community by a licensed professional before residential treatment was requested and outpatient therapy did not work? Basically, they want evidence that you tried outpatient therapy with weekly sessions (or more often) and because it was not effective, a more intensive level of care like residential treatment was justified.
  • Prior to admission, did you contact your health plan for list of in-network residential treatment options? More on this later – what to do if you can not find a good option.
  • Is there uncontrollable risk-taking to self or others or other dangerous behavior?
  • Has there been a documentable and rapid decrease in level of functioning in one or more life domains. Another way to describe it is a decline in functioning resulting in the ability to perform self-care. 
  • Is there a likelihood of no improvement in current environment (ie. home or college)
  • Is there a reasonable expectation that patient will improve in residential setting and be able to return to outpatient therapy for aftercare? 

How to Request this Higher Level of Care?

Now that you understand the criteria, let’s talk about how to actually request residential treatment. 

  • Write a letter strongly recommending admission to residential treatment 
  • Provide copies of assessments and testing performed by a licensed professional that indicate 1) a formal diagnosis and 2) specific recommendations that list residential treatment.
  • Explain how outpatient therapy has not been successful
  • Explain why current circumstances make it unlikely that patient will show improvement (ie. Improvement is not likely in home setting due to social stressors such as negative peers that sell drugs but remain in the environment)
  • Document unsafe, declining behaviors – show symptoms and behaviors that represent a decline from usual state and include either self-injurious or risk-taking behavior that cannot be managed outside of 24 hr care. Can your kid maintain abstinence outside of 24 hr care? 
  • Explain that the residential treatment program uses evidence-based clinical interventions.
  • Request the residential treatment program directly contact your insurer for pre-authorization. Pre-authorization is the insurance company’s way of giving formal permission to use a higher (and more expensive) level of care. Make sure to obtain the tracking number and verification of the call from the residential treatment program. If approved, obtain written authorization confirming admission approval.

After you send off your request, your insurer should should respond in 5 days. Don’t wait that long – call them every day to find out the status of your request. Yes, seriously – call every day. 

Accepted! Now Some Additional Insurance Mandates

The insurance company accepted your request (more below on what happens when they do not accept it) and a wave of relief comes over you planning for some quiet time once your kid is safely transitioned. But before you get too comfy, there are a few things you want to make sure the residential treatment program will do to ensure insurance covers as much as possible. It’s easier to ask these questions during the admissions process rather than at discharge. Here’s a list of what to look for or ask for:

  • A basic physical during admission (urine screening for drug facility)
  • Onsite nursing and 24hr access to med care
  • Multidisciplinary assessment (also called a Biopsychosocial Intake) performed within 72 hr of admission, including information obtained from patient’s previous providers (ie. therapist, primary care physician)
  • Individual therapy with a licensed therapist (ie. LPC, LCSW, LMFT) at least one time per week
  • Weekly meetings with doctor for medication management
  • Weekly family therapy
  • Discharge plan created one week after admission which acts as a set of exit criteria
  • Licensed in the state in which they are located. Some facilities are owned by huge companies in another state. Make sure they are credentialed and licensed.

Denied. Now on to The Appeal Process

Denials are just a way of life in the therapeutic treatment world but it’s certainly not the end. Here are some information on what to do when you experience a denial.

  • First Thing – Do not let the denial get you mad and do not attempt to use logic, common sense or science to understand why. Insurance is a business and their business model is take in money and pay for as little service as possible – period. 
  • If residential treatment is verbally denied, request written denial. They must deny in writing and often will send the residential treatment program as well as the insured person a copy. 
  • Do not just ignore the denial and send your kid off unless you are willing to pay out of pocket and work your tail off at discharge to get the insurer to pay for it.
  • How to appeal depends upon the reason for denial. The insurance company will likely list specific criteria either your kid or the residential treatment program did not meet.
  • If the insurer states that residential treatment is not a covered benefit but they offer  other mental/behavioral health benefits, they are required by law to pay. In Harlick v Blue Cross of California – On August 26, 2011 the court confirmed that California’s Mental Health Parity Act requires health plans to provide coverage of “all medically necessary treatment” for “severe mental illnesses” under “the same financial terms as those applied to physical illnesses,” and are obligated to pay for residential treatment for people with eating disorders even if the policy excludes residential treatment.

And It’s Still Denied – What Next?

If you submit an appeal with additional information and site the law but still are denied or hear nothing, you can request an independent review from your state’s regulatory body that oversees insurance compliance. It’s amazing how quickly insurance companies can ‘find missing paperwork’ or reverse a denial when regulators and attorney’s get involved. 

  • Send a certified-mail cover letter describing the dispute
  • Provide all relevant evaluations, assessments and testing you already sent to the insurer
  • Submit a doctor’s letter stating care is medically necessary
  • You can also hire an attorney that specializes in insurance issues like this. They are often worth their specialist price tag.

Plan B – If You Can Afford It

If residential is denied and you don’t want to push the insurer for whatever reason, you can pay out of pocket for room and board and try to get the clinical services covered. This approach is often what is equivalent to out-of-network coverage. The insurer is more likely to cover outpatient therapy, group therapy and medication management (virtually the same as if client was living at home and going to therapy).

You can also request that the residential treatment primary therapist get a single case agreement which forces the insurer to pay at in-network rate and you only owe the copay, as usual. 

What if Our Family Member is at Therapeutic Boarding School?

With the growth of therapeutic boarding schools, we’ve received a ton of questions about how insurance pays for the clinical aspects of these hybrid programs. Here are some tricks we’ve picked up over the years:

  • Think like the insurance company – they want to hear your son or daughter is being referred to as a patient and not a student.
  • Make sure to request a physical assessment is done at admissions. This promotes the perspective that he/she is a patient and not a student. Remember – we want the insurer to understand this is a therapeutic program, not as much an academic program.
  • We also want to ensure the program is keeping daily records such as treatment plan updates, nursing and medical notes and service notes – health plans will want copies. We want to be documenting progress as well as setbacks. 

When we conduct placement services, we always request the therapeutic program develop a treatment plan with some specific exit criteria. The first day of treatment is the first day of discharge planning. Some plans will want exit criteria so err on the side of having the program provide it early on. It’s also a good clinical practice to give the providers a clear target. 

In Which State Should Insurance Regulators Be Notified if Insurance Refuses to Cooperate?

The state in which treatment is being provided is where insurance regulators should be contacted if your insurance company refuses to play nicely. The state in which you live may be where your insurance is attached, but legal oversight for provision of service and insurance regulation is in the treatment state. 

Can Insurance Pay for Services Retroactively?

Theoretically, yes. Practically, it’s pretty difficult and will require regular attention and contact with the insurer. They will likely ‘lose’ applications, claim forms and anything else you send. If you get insurance to agree to pay for residential treatment or other therapeutic services after treatment has started, you can request for retroactive coverage. It’s best to write a letter (and send it certified mail and keep a copy for your records) stating why you didn’t understand or it was not stated clearly in a policy that treatment was covered. 

Will Insurance Cover Partial Hospitalization Programs (PHP)?

Partial Hospitalization Programs or PHPs is typically a level of care designed for individuals who need structured mental health, behavioral health or substance abuse programming but do not need 24-hour supervision (ie. inpatient or hosplitalization). Many hospitals and residential treatment programs offer partial hospitalization or day treatment services. Good PHPs are designed to provide support, education, medical monitoring and accountability during the hours of the day often identified as most troublesome for patients. Patients participate in therapeutic groups, structured activities and discharge planning similar to those offered in the inpatient and residential programs. Many patients who have been in an inpatient or residential program can “step down” to this level of care because it continues to provide a high amount of structure and support. 

Insurance generally covers PHP at a per diem rate (daily rate) but will not cover overnight which the hospital or treatment program may charge extra for. Make sure to clearly understand how the treatment center charges for PHP before signing up. Also make sure insurance covers it and what portion it covers. 

So we covered several of the topics and tricks that can help you navigate the insurance company maze when it comes to paying for residential treatment. If you need additional help, contact us today – 

Therapists: Change in Medical Coding Threatens Mental Health Care

Reprinted from NBC News

By JoNel Aleccia, Staff Writer, NBC News

Marc Milhander conducted more than 100 psychotherapy sessions in the first few weeks of this year, treating patients ranging from the mildly anxious to the severely depressed and the 24-year-old with antisocial personality disorder who really wants to get his hands on a gun.

But Milhander, 54, a psychologist who co-owns a busy Niles, Mich., counseling center, is getting pretty anxious himself.

He’s among a growing number of U.S. mental health professionals who say their insurance claims have been denied — and their payments have been withheld — because of problems resulting from nationwide changes in psychotherapy treatment codes that took effect Jan. 1.

“I’ve been paid for five hours of work for the month of January,” said Milhander, who supports a staff of four and oversees 300 patients a month. “I just wrote a big, fat check out of my personal bank account to keep us afloat.”

Worse, Milhander and others say systemwide delays and outright denials of payment could last for months, jeopardizing not just the nation’s 500,000 providers, but also access to care for millions of mentally ill Americans. Federal estimates suggest that nearly 20 percent of the adult U.S. population has some form of mental illness.

“So far, it’s chaos,” said Randy Phelps, deputy executive director for the American Psychological Association, who says hits to the coding section of the APA’s website have topped 300,000 in the past month. “It’s hard to evaluate how widespread this is.”

The problem comes amid growing demands for better interventions with the mentally ill in the wake of shooting massacres in Aurora, Colo., and Newtown, Conn.

“Compliance with treatment is a sketchy thing to begin with,” said Sam Muszynski, director of  the office of health care systems and financing for the American Psychiatric Association. He fears that financial fallout may force some providers to disrupt care, leaving mentally unstable patients on their own temporarily — or longer.

“All it takes is one missed appointment,” he added.

The trouble stems from the first overhaul since 1998 of the codes used to describe — and bill for — mental health treatment. They’re among some 8,000 to 9,000 CPT, or current procedural terminology, codes used for all types of medical procedures.

The codes, produced by the American Medical Association, are updated each year, usually with no problem, experts say. But this year, changes to a mere 30 codes that affect mental health services have thrown a huge glitch into the system.

“There are some systems that aren’t even ready to begin accepting claims,” said Nina Marshall, director of public policy for the National Council for Behavioral Health.

She has been flooded with calls and e-mails, not only from providers confused about how much to charge and when they’ll get paid, but also from patients worried about care.

“I have heard from consumers saying that their providers can’t provide the services,” she said. “They’re reaching out to me with real concerns.”

The psychiatric codes were updated after vigorous lobbying by mental health care providers, who argued they weren’t being paid enough to treat today’s medically complex or seriously ill patients.

“What has come out of managed care in mental health is they go in for three days, they’re on meds, they’re barely stabilized, and being treated by outpatient providers,” Phelps said. “Nobody had reevaluated these codes for 30 years, but the world had changed tremendously.”

Payers unprepared

But the implementation has been difficult, at the very least.

Payers, including the federal Medicare and Medicaid programs, admit they weren’t prepared for the switch.

Some providers have used the new codes incorrectly — or not at all, a violation of federal law. Some government contractors logged extra “edits” into the codes, invalidating scores of submissions, Medicare officials told NBC News. Three weeks into the new system, federal officials had to send directives reminding everyone of the changes, said Brian Cook, a spokesman for the Centers for Medicare and Medicaid services.

The nation’s largest private insurers have had problems, too.

“The amount of changes and the work involved was much bigger than … the folks involved anticipated,” said Helen Stojic, a spokeswoman for Blue Cross Blue Shield of Michigan, where Marc Milhander practices.

Stojic couldn’t say how many Michigan claims had been denied or how many providers had been affected, but she acknowledged that many had not received payments in January — and that there was no firm date when they would.

“We’re going to do everything possible to get some dollars to them,” she said. “We certainly apologize for the inconvenience.”

For Milhander, the issue is far more than an inconvenience. He says worried about keeping the doors open with so little money coming in.

“Right now, we’re working for free,” he said.

Steven Perlow, president of the Georgia Psychological Association and a psychologist in private practice, says he hasn’t received January payments from private insurers, either.

He, too, has heard from dozens of frustrated colleagues worried not just about cash flow but also about code changes that shave more off of insurance payments. One change, for instance, trims a typical therapy session to 45 minutes and cuts reimbursement by $1 each time.

“It’s just $1 less, but nonetheless, we’re being asked to take less,” said Perlow, who seeks about 45 patients a week.

The biggest worry, though, is that the coding chaos will affect care for vulnerable patients fortunate enough to have some form of insurance coverage.

‘A really large job’

About 46.5 million adults in the U.S. — or nearly 20 percent of the population — suffer from some form of mental illness, according to government statistics. About 11.5 million suffer from serious conditions.

It’s not clear how many actually have access to care, but many do not, and anything that jeopardizes existing support is a problem, experts say.

“We are ethically bound not to leave patients hanging,” Perlow said. “I will personally see people for a sliding scale … there have been situations where I’ve seen people for free.”

Milhander said he, too, would continue to treat patients — including the most severely ill who require medication management — as long as possible.

“My staff are understandably panicked, fearful that they won’t have the financial resources to get through this,” Milhander said. “I’m letting them know I will carry them through this period financially, for as long as I’m able.”

How long the denials and delays may last is anyone’s guess. Medicare officials say they’ve begun reprocessing claims that were denied in the first weeks of the year. But for some Medicaid programs, the problem is so complex that they may not be able to get up to speed to process claims until June, experts tell NBC News.

Private insurers are aware of — and working on — the problem, said Susan Pisano, a spokeswoman for America’s Health Insurance Plans, an industry association.

“Implementing these codes is a really large job,” she said, noting that some plans are offering alternate payment processes until the problem is fixed.

Still, some providers may stop participating in insurance plans that delay too long, or cut fees, and others might be forced to close shop entirely, unable to go for weeks or months without income.

‘How scary is this?’

That’s a frightening thought to the family of Milhander’s 24-year-old patient, who suffers from paranoid delusions and only recently has been stabilized under the psychologist’s care.

“Marc is the only person that he is able to talk to. This is his only release,” says a family member, who asked not to be identified, even broadly, for safety reasons.

The young man suffered a head injury as a teenager. He has threatened to burn the house with people in it, threatened to get a gun, threatened to “come back and haunt” family members after his own death.

“We hear about these scary things that happen. How scary is this, now that the insurance is having these issues?” said the family member. “How many people are going to be left untreated out there?”