Understanding Medical Necessity and
its Role in the Process of Authorization for Treatment
Insurance coverage and authorization processes vary greatly among the different insurance companies and policies. In policies that require an authorization for treatment, the insurance company will assign a case manager to review each individual case and authorize the level of care they deem medically necessary. Levels of care range include detoxification, inpatient rehabilitation, residential rehabilitation, partial hospitalization, intensive outpatient and outpatient. Although an insurance policy may offer a benefit for drug and alcohol treatment, that benefit will not cover the treatment unless it is authorized in advance.
Each insurance company has its own set of criteria for determining medical necessity based on the standards of the American Society for Addiction Medicine (ASAM). Endeavor House staff are very experienced in presenting cases for authorization and always work to provide in depth clinical information to support the proposed recommendation.
When do we obtain authorization?
The initial review takes place at the time of admission and is based on the information that the client presents and the information the client provides the intake counselor during the initial intake interview. Initial authorizations will cover a small range of days (1 or more) and concurrent reviews will follow to obtain continuous authorizations.
These additional concurrent reviews are based on information that has been gathered since the time of admission, to include current health conditions, progress & participation in the program, commitment to rehabilitation, social, familial and employment conditions, legal issues, etc. The insurance company care manager will again determine the level of care that is medically required at that time and provide an authorization for the corresponding level of care. This process will continue throughout the entirety of the client’s treatment.
What happens if the authorization is denied?
An insurance company care manager can at any time determine that the client does not meet the medical criteria for the level of care recommended by Endeavor House. This can occur at the time of admission or any time thereafter. Should this occur, Endeavor House will follow any further review processes appropriate to the case to overturn a denial to include doctor level reviews and appeals. The review and appeals process varies from insurance company to insurance company.
If further review processes are not appropriate or do not result in an overturned denial, a Financial Counselor will present additional payment options to your funding source – typically a family member. The Financial Counselor will work with you and/or your family to offer affordable solutions to complete the recommended treatment course.
When can we appeal a denial?
Just as the authorization process differs from company to company, the appeal process does as well. A Financial Counselor will explain the appeal options when a denial occurs on a case by case basis. Processing an appeal with some insurance companies may result in uncovered treatment days and therefore increased out-of-pocket expenses. However, most insurance companies offer a member appeals process that is accessed by the member or policy holder that will not affect the coverage.
