Tips for Navigating Placement for Your Child

by Jamie Goodman, M.ED., LPC, of Pilcrow Advisors

As a parent contemplating residential treatment, you're likely facing one of the most significant & challenging decisions of your life. Ensuring your child gets the necessary care while navigating potential insurance coverage & the financial implications can feel overwhelming. Outlined below is some key information to help you make informed decisions regarding placement.

1. What are my child's specific needs?

   • Start by evaluating the severity of your child's mental health condition & the likelihood that they'll respond positively to outpatient interventions. Consulting with mental health professionals can help determine if residential treatment is appropriate or if alternative options like Partial Hospitalization (PHP) or Intensive Outpatient Programs (IOP) might be suitable.  In addition, consider whether other ancillary services, including sober coaching, mentoring, drug testing, alternative educational opportunities, behavior specialist, parent coaching and/or family intensives may be effective.

Understanding Insurance Terms

1. Type of insurance: Confirm the type of insurance you have (i.e. - PPO, HMP, EPO) and begin to understand how that may impact what programs you can pursue if you're looking for insurance to help cover the costs.

2. In-network facilities: Typically, insurance covers a higher percentage of costs at in-network treatment centers, resulting in lower out-of-pocket expenses for you. However, there can be limitations in the availability & quality of in-network facilities.  In-network facilities may also have less flexibility in their treatment approaches due to insurance constraints.

3. Out-of-network facilities: Insurance coverage is often less comprehensive for out-of-network centers, leading to higher private pay costs. However, some plans provide partial coverage. It is important to understand if your insurance provides out-of-network benefits.

4. Single Case Agreement (SCA): An SCA is a contract between your insurance provider & an out-of-network treatment facility, allowing your child to receive care at in-network rates. Securing an SCA involves demonstrating that the out-of-network facility offers a unique & necessary level of care not available within the network.

5. Medical Necessity: Insurance coverage often depends on proving "medical necessity." This means the treatment must be essential for addressing your child's mental health condition, as determined by a healthcare professional. Ensure the treatment center and/or outpatient providers can provide thorough documentation to support the medical necessity of their program.

6. PHP & IOP Levels of Care: It is important to know that some Residential Treatment Centers can also have a PHP and/or IOP level of care license.  This means that if/when insurance stops covering RTC level of care, there may still be an opportunity to continue to receive partial coverage through PHP & IOP billing (you would still be responsible for the room & board costs).  

Preauthorization & Checking Your Benefits

1. Preauthorization

   • Many insurance plans require preauthorization before covering residential treatment. This means obtaining approval from your insurance provider prior to your child's admission. Check with your insurer about the specific preauthorization process & required documentation.

2. Checking Your Benefits

   • Review your policy: Carefully read your insurance policy to understand coverage details for mental health services.  There are insurance advocates you can hire who specialize in this work.  Reach out to us for referrals, if needed.

   • Contact your insurer: Speak directly with your insurance company's customer service to clarify coverage for residential treatment, including in-network & out-of-network options & the preauthorization process.  

   • Ask detailed questions: Inquire about deductibles, co-pays, out-of-pocket maximums & any exclusions related to mental health treatment (i.e. – out-of-state treatment or the requirement to have 24/7 nursing on site to qualify for coverage).

Additional Tips

• Documentation: Keep meticulous records of all communications with your insurance company and the treatment providers. This includes phone calls, emails & letters.

• Advocacy: Be prepared to advocate for your child. If an initial claim is denied, ask about the appeals process & gather supporting documentation from healthcare providers.  Understand the time constraints you have to file an appeal or seek reimbursement.