A New Report Shows Decline in Substance Use and Mental Health Insurance Coverage

Key points from the research and what it means for you.

A Milliman report released this week, initially commissioned by the Mental Health Treatment and Research Institute, shone a bright light on the concerns regarding insurance coverage for mental health and substance abuse.

The findings point to a decline in the benefits for behavioral health and addiction treatment services, even while the national rates of suicide and overdose are on the rise.

Estimates from the Substance Abuse and Mental Health Services Administration (SAMHSA) report that more than 20 million of the 23.2 million people in the United States who need treatment for drug and alcohol use don’t receive it.

In a survey of individuals with substance use disorders, over 36% of respondents said that a lack of health care coverage stopped from them accessing treatment.

The impact of policy restrictions and denials is significant.

More than 86% of the millions that suffer from alcohol or substance use disorders each year go untreated, as SAMHSA notes is a continued and systemic burden not only societally but financially.

The Milliman report specifically reviewed the disparity in the treatment of substance use disorders, finding that the rate of out-of-network provider use for inpatient and outpatient services was 10.1x and 8.5x higher, respectively than for any physical health care.

What does that signify? Why are those rates so much higher in the addiction treatment realm?

Primarily that despite pushes to add more in-network options to plans, insurance companies continue to have allowed gaps in what their subscribers can access. While some might choose to pursue a treatment program far out of network for specific reasons, rather than use one within their proximity, it still stands there is likely a good reason for the decision.

The ability to appeal and receive an approval to use a provider outside of the network is possible, but not without hurdles and a bit of a fight. Additionally, most providers do a full evaluation, including the client’s input and medical and emotional risk factors, to ensure they receive the right level of care and oversight, meaning if residential or above is recommended, it’s also for good reason.

For some, during and after a treatment stay, the fight continues.

Continuous reviews of eligibility from the insurance companies sometimes rush people through programs or judges them to be ready to transition quickly. There is a process of deciding, sometimes even on a day-by-day basis if a patient should continue to stay at a residential level of care, leaving clients in the lurch with a discharge looming at any moment. While programs aim to appeal and advocate for clients’ needs as best they are able, they have to also approach the situation realistically and prepare their residents for inevitable change if their appeal is not approved.

Yes, crisis and higher-level of care are not meant to be long-term solutions or stagnation points, and the insurance companies do have to question the efficacy of keeping someone in a more expensive facility.

However, addiction and mental illness are chronic diseases, and behavior change and healing takes time.

Addiction professionals note that only approving a lower-than-ideal level of care or stepping someone down to outpatient too quickly takes away important support and decreases the success of treatment. Outcomes suffer and the rate of relapse spikes. While compliance and progress in a program is an important and heartening sign, there has to be an accounting for the structure and intensity of the program as a factor. Shows of improvement are not immediate reason to discharge and building new habits requires enough time to practice, and perhaps to mess up, within a safe environment.

So, it comes to a question of short-term gain over long-term benefits.

While it may seem to cost more in the here and now, it seems that the likelihood of recurring expenses declines drastically in the future.

Plus, it keeps clients from cycling in and out of treatment, often a long, discouraging, and life-disrupting process.

Even more upsetting, patients are sometimes unaware or left reeling when months after discharge bills are left unpaid. As insurance companies and treatment providers volley back-and-forth with prices and aim to negotiate, it can create a high-stress situation for a person very new into recovery and a family still in the process of healing.

Many times the costs will eventually be approved, especially if the benefit was initially accepted, but other times it falls on the subscriber. It’s important to wait, even if it feels unusual, to pay bills. While paperwork in the mail may arrive with an outstanding balance, the amount may be agreed upon and settled before your check ever arrives.

Some insurance companies would refund the amount you paid, but you could also risk not seeing this money back in your account.

Utilizing online systems, case managers, and provider financial representatives helps to keep you up to date and get support through the process. All teams working together can increase the chance of a smooth process.

This study explored employer-sponsored programs, and there is an interesting tie to be noted.

Some statistics point to a decrease in absenteeism, incomplete work, and mistakes, when those with performance issues due to mental illness and substance use disorders received treatment, meaning that for employers, it is perhaps more cost-effective to support people in pursing help.

For the insurance companies, cutting down on benefit costs is a short-term win but sometimes a long-term loss. One statistic from the state of Washington saw a 50% decrease in medical expenses for those who received substance use treatment compared to those who did not.

Part of the issue stems from particularly low numbers of providers being covered or working with insurance companies. While there are often quite rigorous systems and protocols to be added to their Rolodex of approved options, which can help to assure the treatment standards and practices are acceptable, there is another big problem.

There is a cost battle going on between the two behind-the-scenes that can prove detrimental to policy-holders. Insurance companies are paying behavioral and mental health providers, on average, less than the Medicare rate. The low rates often discourage or stop providers from applying or joining networks, especially those in private practice versus within an affiliated medical system.

Comparatively speaking, physical health providers’ average rates are higher than those of Medicare.

For those in rural areas, where treatment options are slim, the access to help can be so limited and far-reaching that few options even exist. When insurance companies make it that much more difficult for the practitioners to join the network, it is at the true cost of patients who are left unassisted. Some struggle to afford the financial or logistical burden of traveling to see practitioners far from home and may go for months without checking-in. Statistics show that keeping in contact and consistent updates with those struggling with mental illness and addiction are integral to maintaining progress and recovery.

The disparity in coverage and reimbursement, and the use of out-of-network providers, was significantly higher for residential treatment facilities (RTF), with a rate of 50% and more than 15x the amount compared to medical and surgical facilities.

Aside from money-making tactics, there is another possible reason why there are gaps in coverage for RTF treatment.

Overall, residential treatment does not have as much scientific and evidence-based research to back up its model. Some critics challenge that for a very high cost of care, the outcomes have not been proved. Some, like those who made a 2015 documentary about the money-making business of addiction recovery facilities worry that some are not legitimate or regulated and are more concerned with making money than helping people. Some question those with swanky houses and resort-like settings if these elements add to the cost without reason.

But that doesn’t mean that there aren’t successes, and it doesn’t mean all centers are alike or questionable. This furthers the importance of thorough review, both from potential patients themselves and the insurance companies.

By looking at certifications, success rates, therapeutic modalities, expertise of staff, and overall legitimacy of the provider, there are factors by which to decide who are the good players and who, the few, are ill-intentioned. Third-party review can provide insight from a non-biased party and discussing the values and background of the facility gives a clearer picture. Treatment centers are stepping up to offer more information and meet consumer and policy demands.

The improvements and effort continue on the insurance side as well.

Amid lawsuits against big-name insurance companies and reports like this that mar the confidence insurance providers, many are working to improve benefits and resources available for policy-holders.

From asserting that out-of-network providers will be covered if an in-network is unavailable, to hiring behavioral health experts or agencies to act as go-betweens for subscribers and providers, the companies are challenged to step-up and improve the way their plans address mental health benefits. Some assign case managers to clients who are transitioning through levels-of-care to help connect them to providers and check-in on their progress, giving them a point of contact for questions or concerns.

When it comes to your benefits and using them for treatment, be smart.

Ask questions and work with all involved parties to discuss financial obligations upfront. Between insurance, treatment providers, and even non-profit or government help, there are ways to ensure you or your loved one gets the care they need without an undue and overwhelming monetary burden. Transparency is important, so push to be sure you have the answers you need before signing on a dotted line.

The American Psychological Association, among others, provides online resources to help people understand and learn more, like this page with frequently asked questions about insurance and mental health services.

SAMHSA and other governmental agencies offer service locators and hotlines to help those struggling with addiction and mental illness find and pursue treatment.

The National Institute of Mental Health has a guide with questions to ask to decide if a provider is the right fit for you and consider what type of service might be most applicable.

* As always, if you or a loved one are in crisis or need immediate help, as a danger to yourself or others, go to your nearest emergency room or call 911.

The National Suicide Prevention Line and Crisis Text Line are available 24 hours a day, seven days a week with crisis counselors available to assist you.*

Advocacy continues at the governmental level and the grassroots level, as the recovery community rallies to tell their stories of success and promote the availability of treatment so others can benefit and live free of addiction.

This includes support of the Mental Health Parity and Addiction Equity Act (Parity Act or MHPAEA), which requires that insurance covers mental health and substance use disorder treatment the same way they cover other illnesses.

While the MHPAEA was signed into law in 2008, the problems and violations persist, including:

  • Separate deductibles of higher copays for behavioral health services
  • Limits on days in treatment or provider visits
  • Narrowing of mental health providers available
  • Higher prescription costs for psychiatric or behavioral health medications
  • Requirement of pre-authorization for the start or continuation of treatment

As the conversation reaches the national stage, with new research and emotional anecdotes paving the way, alignment and teamwork between insurance, treatment providers, and clients are possible.

Only 1 in 10 people with substance use disorder receive any type of treatment. The impact is vast, and none of us can afford that cost, not in dollars but lives.

At the end of the day, the most important thing is ensuring the rising number of people affected by addiction and mental illness get the help they need. If you have questions about how to access and pay for treatment, you can call, free of charge, and discuss with a trained representative at Steps Recovery Centers – 385-250-1701. We are here to help. While insurance and paying for rehabilitation services can be complex, you don’t have to work through it alone.

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