Getting insurance to approve inpatient or residential rehab can feel like a maze, especially when you are trying to make a decision fast. The good news is that many plans do cover substance use treatment, and there are specific steps that make approval much more likely. The key is understanding how insurers make decisions: they usually focus on network status, prior authorization, and medical necessity.
This guide walks you through what to do before admission, what to ask on the phone, and what to do if your insurer says no.
Step 1: Confirm Your Benefits And Your Level Of Care
Start by verifying what your plan covers for substance use treatment. Many plans are required to cover mental health and substance use services, and Marketplace plans cover them as an essential health benefit.
When you call your insurance company, ask specifically about:
- Inpatient detox (hospital or detox facility)
- Residential/inpatient rehab (live-in treatment)
- PHP and IOP (step-down options)
- Outpatient therapy and medication management
Also ask:
- Is there a deductible you must meet first?
- What are the copays/coinsurance for inpatient or residential?
- Are there limits on days or requirements for ongoing reviews?
Step 2: Choose In-Network When Possible
Insurance approvals are usually smoother when the facility is in-network. Out-of-network care can still be possible, but it often leads to higher out-of-pocket costs, extra paperwork, or denial unless there is a strong clinical reason.
If you need a specific facility that is out-of-network, ask your insurer whether they offer:
- a single case agreement (sometimes used when appropriate care is not available in-network)
- a gap exception based on medical necessity and access needs
Step 3: Make Sure Prior Authorization Happens Before Admission
Many plans require prior authorization for non-emergency inpatient or residential treatment. If you admit without authorization, insurers may reduce coverage or deny payment.
Most reputable rehab centers have a utilization review team who will handle prior auth for you, but do not assume it is automatic. Ask the facility:
- “Will you obtain the prior authorization before admission?”
- “Who communicates with my insurer, and how often do you do continued-stay reviews?”
- “What documentation do you submit to prove medical necessity?”
Step 4: Get A Clinical Assessment That Supports Medical Necessity
Insurance decisions are rarely based on how much you want treatment. They are based on whether inpatient or residential care is considered medically necessary versus a lower level of care like PHP or IOP.
A strong assessment usually documents:
- substance use history, pattern, and recent escalation
- withdrawal risk (especially alcohol or benzos)
- relapse history and past treatment attempts
- mental health concerns (depression, trauma, anxiety, suicidal risk)
- safety risks in the home environment
- functional impairment (work, parenting, daily living)
If possible, get the assessment done by:
- the treatment facility’s clinical team, or
- a qualified clinician who can document the need for a higher level of care
Step 5: Use Parity Law Language When Asking For Coverage
The Mental Health Parity and Addiction Equity Act (MHPAEA) generally requires that, if a plan provides mental health and substance use benefits, those benefits cannot be more restrictive than medical/surgical benefits. This applies to things like copays, visit limits, and also “care management” rules like prior authorization and medical necessity processes.
If you run into barriers that feel excessive, ask:
- “Can you explain the medical necessity criteria you are applying for inpatient substance use treatment?”
- “Can you provide the written policy for how inpatient SUD treatment is authorized and how continued stays are reviewed?”
- “How is this comparable to medical/surgical inpatient authorization requirements under parity?”
Even asking these questions can change how carefully the insurer handles the case.
Step 6: Know The Most Common Reasons Insurance Denies Inpatient Rehab
Denials often happen because the insurer claims one of the following:
- “You can be treated at a lower level of care” (PHP/IOP instead of inpatient)
- “The facility is out-of-network”
- “Prior authorization was missing or late”
- “Insufficient documentation of medical necessity”
- “Continued stay not justified” after initial approval
This is why ongoing reviews matter. Many plans approve the first few days, then require documentation to extend coverage.
Step 7: If You Get Denied, Appeal Quickly And Escalate
A denial is not the end. You typically have the right to an internal appeal, and in many cases, an external review by an independent reviewer after internal appeals are exhausted.
What To Do Immediately After A Denial
- Ask for the denial in writing and the exact reason code.
- Request the medical necessity criteria used for the decision.
- Ask your treatment provider to submit additional clinical documentation.
- File an internal appeal right away and request an expedited appeal if the situation is urgent.
HealthCare.gov also explains how external review works and where to find your state’s process details.
If You Suspect A Parity Violation
If the insurer is applying stricter rules to addiction treatment than to comparable medical care, you can also file a parity complaint depending on your plan type. The U.S. Department of Labor provides parity resources for employer plans.
Step 8: Build A “Yes” Path If Inpatient Is Not Approved
Sometimes the fastest way to get covered care is accepting a step-down pathway that insurance is more likely to approve:
- detox (if needed) → PHP → IOP → outpatient
That does not mean inpatient was not needed. It means insurance is approving the level they believe meets criteria. If inpatient still feels clinically necessary, you can pursue appeal while getting immediate support in the highest approved level of care.
What To Ask On The Phone
- “What are my benefits for inpatient or residential substance use treatment?”
- “Do I need prior authorization? If yes, what is the process?”
- “What medical necessity criteria do you use to approve inpatient SUD treatment?”
- “How often do you require continued-stay reviews?”
- “What are my in-network facility options?”
- “If out-of-network is needed, do you allow a single case agreement?”
- “If denied, what is the fastest path to an expedited appeal and external review?”
If you are looking for rehabs that accept Blue Cross Blue Shield, you can find more info here.