Insurance Basics For IOP Outpatient Programs in Texas

Texas health insurance will likely pay for an intensive outpatient drinking rehab program, but the cost of IOP programs vary from patient to patient. Here’s why.

Does insurance cover IOP programs for alcohol use disorder? In Texas it usually does.

Today, many Texas health insurance plans will cover the cost of IOP drug rehab programs because alcohol use disorder (AUD) is considered a medical disease. The services provided by IOP outpatient programs are essential health services that are effective at treating AUD.

The services are so crucial that there are not one but two laws that require health plans to cover IOP program costs in Texas and the rest of the U.S. - the Federal Mental Health Parity Law (MHPAEA) and the Affordable Care Act. The coverage is similar to other forms of medical care and surgical procedures. 

Beyond that, Texas has set its own parity standards for mental health and substance use treatment coverage for insurance plans that are issued in the state. These standards specify that if outpatient services of any kind are covered there can’t be additional restrictions for outpatient substance use care. That means the pre-authorization requirements, visitation caps and co-pays have to be in-line with other types of outpatient care. 

With all these protections in place, many people who need the help of an IOP outpatient program for alcohol use disorder won’t have to shoulder much of the cost. 

Types of Insurance Plans That Cover AUD Outpatient Programs in Texas

There are a lot of ways a Texan can get health insurance coverage for an IOP or even naltrexone alcohol treatment without enrollment in a program. In most cases, the plan will cover at least a portion of IOP costs, but each type of coverage has its own stipulations. 

Employer Group Plans - Substance use disorders are disruptive for any workplace, so it makes sense that employer group plans cover IOP programs. Small and large employer group insurance plans typically have to provide coverage for substance use disorder. However, the specifics for the coverage vary by plan. 

Individual Plans - Individual plans from an ACA marketplace most likely provide intensive outpatient program coverage. Like group insurance through an employer, ACA marketplace health insurance plans are required to cover substance abuse treatment, but what that coverage entails varies. 

Medicare - If substance abuse treatment is deemed to be medically necessary, medicare will cover the cost. But the coverage is different depending on whether you have Part A, B or D.

VA Benefits - Like Medicare, VA benefits do cover addiction treatment so long as it’s necessary. The IOP provider must also be VA-approved in order to receive coverage.

Texas Medicaid - State Medicaid coverage could be a little more narrow compared to private insurance depending on the plan. However, Medicaid will cover the cost of evaluations and counseling as well as IOP services, depending on the program. There may also be income limitations in order to be eligible for coverage.

IOP Cost With Insurance Coverage From a Texas Provider - Why It Varies

IOP insurance coverage doesn’t automatically mean a program is free or completely covered. The cost of IOP programs in Texas is different for just about everyone because there are a number of variables. Two people who are in the exact same outpatient drinking rehab program could have very different out-of-pocket costs because of differences in their insurance coverage. 

The four biggest cost factors connected to your insurance plan are:

Health Insurance Copays - Copays are fixed amounts that are paid each time you receive a particular service or visit a medical professional. It’s time upfront and the copay amount varies depending on the service or type of doctor that you’re seeing. Any copayments you make will be counted for the max out-of-pocket expense, but may not be included for the deductible.

Health Insurance Deductibles - The deductible is a larger amount that the insured must pay within the year before the insurance plan will cover most of the medical expenses. Each time the insured pays for medical services it is applied to the deductible amount. 

Co-Insurance - Co-insurance is different from a copayment in that it’s a percent of the cost that must be paid by the patient rather than a fixed amount. It’s the amount that is paid for services after the deductible is met. For example, if you have a $2,500 deductible that is met in June, for the remaining six months of the year only a 10% co-insurance must be paid until you hit the max out-of-pocket expense.

Max Out-of-Pocket Expense - This is ultimately the most you will pay in the year to your insurance provider for all types of care that are covered and in-network. Once you hit the max out-of-pocket limit, you won’t pay anything else for covered, in-network services for the remainder of the year.

In-Network IOP Outpatient Programs vs Out-of-Network Programs

Another consideration is whether or not the IOP outpatient program is in-network or out-of-network for your health insurance plan. In-network services are going to be covered whereas out-of-network services usually aren’t or have reduced coverage. 

Pre-Authorization For IOP Insurance Coverage

Something else that is required for IOP program insurance coverage is pre-authorization. This is in place to assure the insurance provider that: 

• The IOP program meets their quality of care standards.
• Enrollment in the program is beneficial and medically necessary.
• That a lower level of care or alternative treatment is insufficient. 

The IOP program providers will submit documentation that shows the patient diagnosis, clinical records and the alcohol dependence treatment plan. Pre-authorization gets everyone on the same page as far as what treatment will include to justify the expenses that insurance will be covering. It’s beneficial for the patient because it helps prevent unanticipated out-of-pocket expenses. 

Something to keep in mind is that pre-authorization may only be for a certain period of time. It may need to be renewed to extend coverage beyond the initial pre-authorization timeframe. The insurer may also request additional information or deny the pre-authorization request. If that happens the patient can appeal the decision. 

Referrals and Primary Physician Coordination

Some types of health insurance plans, particularly HMOs and Medicaid, will require a referral from a primary care physician before providing coverage for an outpatient program. The insurance plan may also require that the treatment center coordinate with the primary physician on a regular basis. 

Virtual and In-Person IOP Now Available With Choose Your Horizon

When you are getting help with alcohol use or another substance use disorder, having a supportive community that’s there for you makes a real difference. With the new Choose Your Horizon IOP, Austin locals have another effective alcohol treatment option that provides: support, behavioral health services, therapy, virtual resources and medication-assisted treatments. 

It’s everything you need to finally take control of your drinking and start living a healthier life. 

Learn more about our outpatient drinking rehab program.