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Levels of Care for Substance Use Disorder (SUD) Treatment and Determining Medical Necessity


As Michigan treatment court professionals, you understand that Substance Use Disorder (SUD) and addiction are complex issues that affect individuals physically, mentally, and socially. Unfortunately, we are often left with questions as to why someone was not approved for treatment or referred to a different level of care that what you may have recommended. Effective treatment is essential for recovery, but the type and intensity of care required can vary significantly from person to person. In this article, we will explore the levels of care for SUD treatment and the factors that insurance companies and organizations consider when determining medical necessity.


There are a variety of levels of care for SUD treatment. Understanding what level of care is right for your participant and how it is determined will better assist in setting proper expectations for your participants.


Levels of care:


  1. Detoxification (Detox)

    Detox is the first level of care for individuals struggling with SUD. It involves the supervised withdrawal from drugs or alcohol to help patients manage potentially dangerous physical and psychological symptoms. Detox is a short-term, acute care level of treatment, typically lasting a few days to a week.


  2. Residential or “Inpatient” Treatment

    Residential or “Inpatient” treatment is a more intensive form of care. Patients stay in a treatment facility 24/7 and receive a structured program that includes individual and group therapy, counseling, and medical support. This level of care is suitable for individuals with severe addiction or those who require a controlled and supportive environment. Typical treatment stay duration can last from 10-45 days of inpatient treatment varies based on each facility, facility outcomes, and whether an individual meets medical necessity.


  3. Partial Hospitalization Programming (PHP) or Day Treatment

    PHP or Day Treatment programs offer comprehensive care during the day, while patients return home or to a supportive environment in the evening. These programs are less restrictive than inpatient treatment but provide a high level of care, with therapy, counseling, and medical services. Some residential programs offer PHP with domicile to individuals requiring a safe and secure environment during this level of care; however, individuals are responsible for any domicile costs attributed to a program.


  4. Intensive Outpatient Program (IOP)

    IOP provides structured treatment, allowing patients to continue with their daily lives. IOPs typically involve group and individual therapy and can be an effective transition or step-down from higher levels of care. Programming is offered during day, evening and/or weekend programming to be flexible with an individual’s outside commitments like work and/or school schedule.


  5. Outpatient Treatment

    Outpatient treatment is the least intensive level of care. It offers individual or group therapy sessions on a less frequent basis, allowing patients to maintain their daily routines and responsibilities while receiving ongoing support.


Determining medical necessity:


Establishing what level of SUD treatment an individual is eligible for is determined by a number of factors.


  • If an individual is seeking to enter any level of care with private funds, medical professionals and program officials will review the individual's medical history to determine the best level of care and course of action for treatment.

  • If an individual is utilizing some type of insurance to cover treatment, level of care and overall coverage is ultimately determined by the participant’s insurance carrier. The insurance carrier reviews information provided to them by the facility medical providers to determine medical necessity and which level of SUD treatment an individual is eligible for. In doing so, they assess various factors to make this determination, including:


  1. Clinical Assessment:

    Insurance companies often require a clinical assessment by a healthcare professional to evaluate the severity of the SUD and the individual's specific needs.


  2. ASAM Criteria:

    The American Society of Addiction Medicine (ASAM) criteria are widely used in the industry to assess the appropriate level of care. The criteria consider factors such as withdrawal risk, biomedical conditions, psychological and social factors, and the individual's readiness for change.


  3. Substance & Frequency:

    Insurance companies consider a variety of factors in approving level of care which includes the type of substance used, frequency of usage, date of last use, and amount of substance used.


  4. Medical Records:

    Insurance providers may request access to an individual's medical records to confirm the diagnosis and assess the medical necessity of the recommended treatment.


  5. Progress and Outcomes:

    Insurance companies may periodically review the patient's progress and outcomes to determine whether continued treatment is medically necessary.


  6. State and Federal Laws:

    The determination of medical necessity may also be influenced by state and federal laws, which vary and may include regulations related to parity between mental health and medical benefits.


  7. Network Providers:

    Insurance companies may limit coverage to treatment facilities and healthcare professionals within their network. Accessing out-of-network providers may require additional justification.


  8. Preauthorization:

    Some insurers require preauthorization for certain levels of care, meaning that the treatment plan must be approved in advance to ensure coverage.


In addition, if a participant has commercial insurance. You will need to understand the added deductible and total out-of-pocket costs that could potentially burden or even prevent a participant from entering treatment at all.


In conclusion, SUD treatment encompasses various levels of care, ranging from detox to outpatient services, each designed to meet the specific needs of individuals with SUD. Based on a number of influences, insurance carriers play a crucial role in determining medical necessity to reveal which level of care your participant is eligible for; unfortunately, the levels of care may not be what you originally planned.


About the Author: Brian D. Cousins works as a Business Development Representative for Skywood Recovery - UHS, Inc. – Substance Use Disorder Division. He can be reached at: Brian.Cousins@frnmail.com

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