If you or your loved one has been diagnosed with a severe mental illness that requires residential treatment, getting insurance coverage for that treatment is critical. The insurance process can be complicated, though, and may require the assistance of a benefits attorney.
What Is Residential Treatment?
A residential treatment center is a live-in healthcare facility that provides intensive therapy with 24-hour supervision for people with serious mental illness and/or substance use disorders. Residential treatment tends to involve longer stays than inpatient treatment, which typically takes place in a more clinical hospital setting. Many people are admitted to residential treatment facilities after participating in a partial hospitalization program (PHP) and/or intensive outpatient (IOP) without improvement. Residential treatment programs typically include treatment with a psychiatrist, as well as various forms of individual, group, and family therapy.
What Types of Mental Health Conditions Require Residential Treatment?
Examples of common mental health conditions that can require residential treatment include:
- Bipolar Disorder
- Borderline Personality Disorder
- Schizoaffective Disorder
- Post-Traumatic Stress Disorder (PTSD)
- Obsessive-Compulsive Disorder (OCD)
- Personality Disorders
- Dissociative Disorders
- Eating Disorders (including Binge-Eating Disorder, Bulimia & Anorexia)
- Substance Use Disorders
- Oppositional Defiant Disorder
Does Insurance Cover Residential Treatment?
Residential treatment is covered under most health plans if it is deemed “medically necessary.” Still, whether your insurance will cover residential treatment, at what rate, for how long, etc., will depend on the specific terms of your healthcare plan.
Even if your healthcare plan excludes coverage for residential treatment, that exclusion is likely illegal and challengeable in court under the Mental Health Parity and Addiction Equity Act (MHPAEA) and/or similar state parity laws. Mental health and substance use disorder treatment is also considered an “essential health benefit” under the Affordable Care Act (ACA).
What Is Mental Health Parity?
The Mental Health Parity and Addiction Equity Act (MHPAEA) is a federal law that requires most health plans to provide equal coverage for mental health treatment as provided for medical/surgical treatment claims. In addition to the federal parity law, most states have passed similar parity laws, although the laws vary from state to state.
What Is Needed to Get Coverage for Residential Treatment?
Most health plans will cover residential treatment so long as it is deemed “medically necessary.” The definition of medical necessity varies from plan to plan, so you must understand the terms of your specific plan. In addition, many insurance companies use proprietary guidelines to interpret what constitutes “medically necessary” mental health treatment. Many plans will also have other requirements for coverage, such as necessitating pre-authorization before admission.
Even if you think your claim for residential treatment should be covered, many claims are denied, or coverage is terminated before the full duration of treatment has been completed.
Common reasons insurance companies use to deny claims for residential treatment include:
- Provider is out-of-network
- Provider reimbursement rate is too high
- Lack of pre-authorization
- Service is not covered
- Service is not medically necessary
- Treatment could have been delivered at a lower level of care
What Can I Do if Coverage Is Denied for My Residential Treatment?
If you or your loved one are denied coverage for medically necessary residential treatment, you have options. In most instances, you will have the opportunity to submit an appeal to your insurance company. If the appeal is unsuccessful, you will then have the option to pursue an external appeal with an Independent Review Organization (IRO) and/or challenge the insurance company’s denial of coverage in federal court. If you have received an insurance denial, it is important you consult with experienced legal counsel like the lawyers at DeBofsky Sherman Casciari Reynolds P.C. to assess your options.
Know Your Rights
Mental health disability and substance use disorder treatment is considered an essential health benefit under the Affordable Care Act (ACA). The Mental Health Parity and Addiction Equity Act (MHPAEA) also requires that most health plans provide equal coverage for mental health treatment as compared to medical/surgical treatment. If your healthcare plan excludes coverage for residential treatment, or you are being denied coverage for residential treatment that is medically necessary, that may be illegal. Consult with an experienced mental health and healthcare benefits attorney to get the coverage you need.
Does This Apply to You?
Contact DeBofsky Sherman Casciari Reynolds P.C. for an attorney consultation. We will work with you to figure out your problem, and how we can help.
Residential Treatment Representative Cases
Some of our firm’s recent successes in reversing coverage denials for residential treatment include:
- Dominic W. v. N. Trust Co. Emp. Welfare Benefit Plan, 392 F. Supp. 3d 907 (N.D. Ill 2019)
- Alice F. v. Health Care Serv. Corp., 367 F. Supp. 3d 817 (N.D. Ill. 2019)
For additional guidance and further discussion of our firm’s victories in obtaining coverage for clients’ residential treatment claims, see Mark DeBofsky’s Article: A Primer on Behavioral Health Residential Treatment Cases and Podcast Wilderness Therapy & Residential Treatment Center Journey: Insurance Coverage from a Lawyer’s Perspective.
We’re Here to Guide You and Fight on Your Behalf
If you or one of your family members has a severe mental illness that requires residential treatment, but your insurance company is refusing to cover it, call our firm today. The experienced attorneys at DeBofsky Sherman Casciari Reynolds P.C. are here to help. We go to exceptional lengths to protect the benefits our clients are entitled to receive.
“It’s a joy to have the process over and a favorable decision issued.”
“Mark – Thank you so much, to you and the team that worked on my case. It has taken me a little bit of time to believe the good news. It’s a joy to have the process over and a favorable decision issued. I am much appreciative of the work and guidance you provided. I felt reassured from our first phone call and more so each time I saw the effort and expertise you brought to my case. Thank you again!”
T. H. | Client
Learn More About Mental Health Parity and Health Benefits Law to Protect Your Rights
A common reason given for denials of health insurance coverage is a “lack of medical necessity.” When an insurance company denies a claim on that basis, that means the insurer disagrees with the patient’s doctor. Medical necessity denials are especially prevalent in claims involving mental health treatment, […]
Health insurance is a critically important benefit since illness and injury are unpredictable, and the high cost of medical care makes it unaffordable to most people absent insurance. Healthcare coverage is confounding, especially if one has health insurance through their employer and are eligible for Medicare due to the so-called Medicare as secondary payer rules […]
A cancer diagnosis brings with it many challenges, including not just emotional and physical challenges but also financial and logistical hurdles as you attempt to find the best treatment options[…]