Differences Between In-Network and Out-of-Network Coverage for Rehab

When you’re choosing a drug or alcohol treatment center for you or a loved one, one key consideration to keep in mind are differences between “in-network” and “out-of-network” coverage for rehab. Understanding those differences can help you make a more informed decision in selecting a rehab program that is right for you.

Beach House Center for Recovery treats a mix of in-network and out-of-network clients. We work with a long list of health insurance companies to help clients optimize in-network or out-of-network benefits, so that clients get “the highest level of care for the longest period of time,” according to Beach House Utilization Review Director Robin Ward. Ward oversees this process, working as a liaison between our clinical and medical departments and insurance companies in order to advocate for maximum coverage on clients’ behalf.

This article will educate you on how this process works, starting with key differences between in-network and out-of-network coverage for rehab at Beach House. You’ll also get authoritative, firsthand information from Ward and other in-house experts regarding the potential advantages and disadvantages to choosing an in-network vs. out-of-network provider, as well as other financial options Beach House makes available to help clients and families afford treatment with peace of mind.

Differences Between In-Network vs. Out-of-Network Coverage

If a rehab center is “in-network,” it accepts a discounted rate for covered services as part of its contract with your insurance provider. On the other hand, if a rehab center is “out-of-network” with your insurance provider, it does not accept a pre-approved amount for detox, residential treatment or other levels of substance abuse care, with the result that the provider can charge you the full price for services.

“The biggest difference,” then, according to Ward: “the reimbursement rate from insurance companies”—or, in other words, the out-of-pocket costs for services that a client could be responsible for.

Ward explained: “We don’t treat patients differently based on whether they have an in-network vs. out-of-network insurance. When you have in-network insurance, there’s a contracted rate already set up. When out of network, the client’s responsibility is more.”

Additionally, your coinsurance (the percentage of the facility bill you must pay after your deductible has been met), deductible (the annual amount you must pay before your plan begins to pay for covered services), and billing will look different, depending on whether the provider is in-network or out-of-network.

First, how Beach House bills you will vary depending on whether Beach House is an in-network provider with your insurance plan. Beach House Billing Director Kristen Mauro shared the example of Beach House’s in-network relationship with Humana. In most cases, Humana-insured clients will have a HMO plan. (Also see next section regarding HMO vs. PPO plans.)

As an in-network provider with Humana, Beach House is expected to charge “an all-inclusive rate and cannot bill separately,” according to Mauro. Patients will also have “a lower deductible” (the amount they must pay in order for insurance coverage to kick in) and “out-of-pocket expenses” (co-pay amount). In these cases, “the payer (Humana) doesn’t want us to bill the patient directly,” Mauro explained.

In contrast, out-of-network clients can expect to be billed directly by Beach House. They also can expect to pay a higher coinsurance amount and usually have a higher deductible to fulfill before coverage kicks in.

HMO vs. PPO Plans – and Why In-Network Savings Aren’t the Only Consideration

If the main distinction of an in-network plan is that it is there to help you save money, that should not be the only consideration in choosing a treatment center. Here’s why: if your insurance plan is a PPO plan—as opposed to a HMO plan that usually provides no out-of-network coverage—you may already be paying more in exchange for a health insurance plan that offers greater out-of-network benefits. A PPO plan will usually help pay for care from providers who don’t accept your plan. (You may still pay more for the cost of treatment than you would for in-network services, but your plan may cover a significant percent of that cost.)

This consideration is very important to keep in mind, because choosing an addiction treatment provider solely on the basis of cost considerations may not be in the best long-term recovery interests of you or a loved one:

• In-network plans often offer only very limited treatment options that will not necessarily provide the kind of specialized treatments or continuum of care that clients with substance use disorders (SUD) need. For example, a client’s in-network benefits may cover a short period of hospitalization in a hospital psych unit—when in fact what the client really needs is detox and residential treatment in a more specialized rehab setting.
• In a similar vein, in-network treatment programs “do not have extra amenities … these are pretty basic,” according to Ward. “An in-network facility won’t make special accommodations,” she said. This is because the lower rate of reimbursement that an in-network provider receives often covers the facility and basic food and medical requirements, with quality care coming second. (This is not universally the case: at Beach House, for example, we are careful to ensure that in-network clients receive the same high quality of care that our out-of-network clients receive; but this trend is something to be generally mindful of when vetting in-network providers.)
• Third, higher-quality treatment programs often will be out-of-network with your plan. Beach House, for example, is out-of-network for a majority of clients who choose our services, anyway—on the basis of our clinical excellence practices and positive treatment outcomes, which consistently outperform the industry average.
• Finally, in-network treatment services can be harder to access, depending on where you are seeking treatment. Consequently, you may have to wait longer in order to be admitted into a detox and treatment program. Yet for many clients and families struggling with a SUD, waiting to get into treatment can mean the difference between life and death, between a rare chance at recovery and a lost opportunity.

How Beach House Works with Insurance Companies to Maximize In-Network and Out-of-Network Coverage

At Beach House, “we consider [addiction] an emergency situation, so we try to work with insurance companies as best we can, because the clients need immediate help. Usually, because of the disease we’re talking about, the client’s resources are tapped, and they don’t have the financial means to afford that deductible at admission,” Mauro said. “What we do is, we bring clients in and work with them, so they meet with a financial counselor (someone on staff who meets with every client) and go over what their financial responsibility is supposed to be … we work with clients to get them on a payment plan, so that maybe they can pay $50/month for their detox. We try to work with the client, so [treatment] is not a financial burden.”

“Good case management” is at the heart of Beach House’s approach to working with health insurance companies, according to Mauro. Ward concurred, describing how she and her utilization review team working closely with Beach House’s clinical and medical departments:

We meet with therapists once a week, so that we know what’s going on clinically and what info we need from clients in order to get them more [insured] time in treatment. Every insurance company is different. Some are easy to work with; some want more specifics. And everything we report to the insurance company has to be in the [client’s] chart … sometimes insurance companies want medical records … so we want all of this clinical and medical information to be in the client’s records. Insurance companies often say, ‘Authorization is not a guarantee of payment.’ Documentation is so important: What we report needs to be in the records.

What if the insurance company comes back and says, “We don’t think the client needs that level of care?” That is when, Ward said, “we try to make a decision and decide whether we do a peer review (get one of our doctors to talk with their doctors), do a stepdown approach to level of care, etc…”

How Beach House Helps Clients Afford Treatment with More Peace of Mind

In addition to exercising careful case management and advocating for client’s best interests with insurance companies, Beach House also works with clients and families to explore other financial options beyond health insurance. By way of example, Mauro mentioned how a member of the Beach House staff meets with every client to discuss costs of treatment and a flexible payment plan that will accommodate their financial situation. As another free service available to clients who may be taking a leave of absence from work, Beach House also does the legwork of filling out Family Medical Leave Act (FMLA) paperwork, so that clients and their families do not have to. This way clients can afford treatment with greater peace of mind, while keeping their main focus on getting better and finding freedom from addiction.

For more information about your in-network and out-of-network coverage for rehab, please contact us today.