Out-of-network benefits for addiction treatment: deductibles, allowed amounts and balance billing

1. First: does the plan pay out of network at all?

Plan type	Out-of-network benefit	What to confirm
PPO	Usually yes, at a lower level than in network	The OON deductible, out-of-pocket max and coinsurance, and how the allowed amount is set.
POS	Often yes, sometimes only with a referral	Whether a referral or authorization is needed for OON behavioral health.
HMO, EPO, narrow-network marketplace plans	Usually none, except emergencies	Whether your program is in this plan's network; being in network with the insurer's other products doesn't count.
Medicaid managed care	Generally only with the plan's approval	Federal rules require the plan to cover needed services out of network when its network can't provide them (42 CFR §438.206). Ask for that approval before admission.
Self-funded employer plans	Whatever the plan document says	These plans follow federal ERISA rules rather than Texas insurance law (TDI). Ask for the summary plan description's OON section.

The electronic check is the fastest first answer. If the 271 lists deductible and out-of-pocket lines with EB12 = N, the plan has OON amounts; if it lists none, treat that as "probably no OON benefit: call." Our guide to reading a 271 shows where those lines are.

2. The five numbers of an OON benefit

Number	What it is	The catch
OON deductible	What the member pays before the plan pays anything out of network	Usually separate from, and larger than, the in-network deductible. Ask whether the two count toward each other.
OON coinsurance	The member's percent after the deductible	A percent of the allowed amount, not of the program's charge.
OON out-of-pocket max	The most the member pays in deductible and coinsurance out of network for the year	The federal cap on out-of-pocket costs applies to in-network care; an OON maximum can be much higher, or there may be none. It doesn't include balance bills (HealthCare.gov).
Allowed amount	The most the plan will pay for a covered service: its rate, also called the eligible expense or payment allowance (CMS glossary)	Out of network, the plan sets it by the method in its plan document. Ask what that method is; you can't estimate anything without it.
Balance bill	The program's charge minus the allowed amount	An in-network provider can't balance bill for covered services; an out-of-network one may, unless a law applies (HealthCare.gov).

One more question that changes the family's cash flow: who gets the check? Some plans send out-of-network payments to the member, not the provider. Ask whether the plan honors an assignment of benefits for this program.

3. A worked example

Made-up, round numbers to show the mechanics; they are not anyone's real rates. A member on a PPO starts 10 days of PHP at an out-of-network program.

Step	Amount	Who pays
Program's charge: $1,000 a day × 10 days	$10,000	(billed to the plan)
Plan's OON allowed amount: $400 a day × 10 days	$4,000	The base for everything below
OON deductible left: $3,000	$3,000	Member
The other $1,000 of allowed, at 40% OON coinsurance	$400 member, $600 plan	Both
Charge minus allowed: $10,000 − $4,000	$6,000	Member, if the program balance bills
Total	Plan $600 · member up to $9,400	—

The same 10 days in network, at a contracted rate of $400 a day with $900 left on a $1,500 deductible and 20% coinsurance, would cost the member $900 plus 20% of $3,100, or $1,520, with no balance bill. That gap is why "we take your insurance" means little until you've checked the network, and why an honest OON estimate always shows the balance bill as a separate line.

4. Surprise-billing laws: what they cover

The federal No Surprises Act

• Emergencies. Emergency services from an out-of-network provider or facility can be billed only at the in-network cost-sharing level, including care after the person is stable unless they give written consent (CMS). The rules define an emergency medical condition to include mental health and substance use conditions that meet the definition.
• Non-emergency care at in-network facilities. The protection covers out-of-network providers working at an in-network hospital, hospital outpatient department, critical access hospital or ambulatory surgical center (45 CFR Part 149). A provider can ask some patients to waive it with a standard notice and consent form, given at least 72 hours ahead (3 hours for same-day appointments); some services, such as anesthesia and emergency medicine, can never be waived.
• What it generally doesn't reach: a person who chooses a freestanding out-of-network residential, PHP or IOP program for planned care. That program isn't one of the four facility types in the non-emergency rule.
• Uninsured or self-pay patients must get a good faith estimate of expected charges, and can dispute a bill that comes in at least $400 above it (CMS good faith estimate notice). A family that decides to pay privately rather than use OON benefits is "self-pay."

Texas law (SB 1264)

For plans the Texas Department of Insurance regulates (a card that says TDI or DOI) and certain state employee and school plans, Texas bans surprise bills for emergency care, for care at an in-network hospital, and for labs and imaging ordered by an in-network doctor (TDI). Under TDI's rules, a consumer can waive the protection only when they had a choice between an in-network and an out-of-network provider (TDI, SB 1264). Like the federal law, it's built around emergencies and hospitals, not a planned admission to an out-of-network program.

These laws change and have exceptions. If your program is out of network and you're unsure whether a protection applies to a particular admission, ask a health care attorney. Cima isn't a law firm and this isn't legal advice.

5. Parity and out-of-network benefits

The Mental Health Parity and Addiction Equity Act sorts benefits into classifications, including inpatient out-of-network and outpatient out-of-network. If a plan covers mental health or substance use benefits in any classification, it has to cover them in every classification where it covers medical and surgical benefits, and its deductibles and out-of-pocket maximums have to combine medical and behavioral health spending (CMS on MHPAEA). In practice: a PPO that pays out of network for medical outpatient care generally can't refuse every out-of-network substance use outpatient claim. If a rep tells you behavioral health has no OON benefit on a plan that has OON medical benefits, ask them to confirm it and note the reference number.

6. When you're out of network: the options

1. Refer to an in-network program when the family can't carry the OON cost. It's often the right clinical and financial answer.
2. Ask for a single-case agreement when the plan has no in-network program that can provide the level of care in a reasonable distance or time. Ask the plan's behavioral health line who handles them, and put the agreed rate and terms in writing before admission.
3. Use the OON benefit with a written estimate that shows the OON deductible, coinsurance and the possible balance bill as separate lines, signed by the family.
4. Get in network. If you keep seeing the same payers out of network, a facility contract is the long-term fix. Cima Consulting handles facility credentialing and contracts, and it's built into the IOP / PHP program launch.

7. What not to do

• Don't promise "your insurance will cover it." Promise what you verified, with the reference number.
• Don't routinely waive the member's deductible or coinsurance. For federal health programs, the OIG has long warned that routine waivers misstate the real charge, and the law excludes waivers from being an inducement only when they aren't advertised or routine and follow either a good-faith finding of financial need or a failed, reasonable effort to collect (42 U.S.C. §1320a-7a(i)(6)). Use a written financial-hardship policy applied case by case, and check your payer contracts.
• Don't pay anyone for patients. Texas's Patient Solicitation Act (Occupations Code ch. 102) and the federal Eliminating Kickbacks in Recovery Act (18 U.S.C. §220) apply to recovery homes, labs and treatment programs, including with commercial insurance.

8. What to ask on the call

1. Does this plan have out-of-network benefits for [level of care]? Is prior authorization required out of network too?
2. What are the OON deductible and out-of-pocket maximum, and how much is left of each? Do in-network and OON amounts count toward each other?
3. What is the OON coinsurance for this level of care?
4. How is the OON allowed amount determined for this service?
5. Are OON payments sent to the provider or the member? Does the plan honor an assignment of benefits?
6. Is behavioral health managed by another company? (Ask them all of the above too.)
7. The rep's name and the call reference number.

The full level-by-level version is in the VOB call script, and every answer has a box on the printable VOB form.

9. What to tell the family

"Your plan does pay something for programs outside its network, but less. Out of network, you'd first meet a separate deductible of $[OON deductible left], then pay [OON coinsurance]% of what your plan decides the care is worth. Our charge can be higher than that amount, and the difference can be your responsibility too. Here's all of it in writing, line by line, before you decide. If an in-network program is a better fit for you, we'll help you find one."

For the in-network version of this conversation, and words for the deductible and out-of-pocket maximum, see deductible vs out-of-pocket maximum.

How Quick VOB helps

Quick VOB shows the deductible and out-of-pocket in and out of network, individual and family, with what's left of each. When a plan lists no OON amounts it says "No out-of-network benefits listed: check before seeing them out of network." HMO, EPO and narrow-network plans get a warning to confirm your program is in that plan's network. If you record that your program is out of network with a plan, the check's headline says so plainly ("likely no benefits; confirm with the payer, or get a single-case agreement, before admitting") instead of showing in-network numbers that don't apply.

Questions

Does insurance cover out-of-network rehab?

Only if the plan has out-of-network benefits, which most PPO and POS plans do and most HMO and EPO plans don't. Even then, the member usually pays a separate OON deductible, higher coinsurance, and possibly the difference between the program's charge and the plan's allowed amount.

Does the No Surprises Act apply to addiction treatment?

It applies to emergencies, including mental health and substance use emergencies treated in an emergency department, and to out-of-network providers at in-network hospitals, hospital outpatient departments, critical access hospitals and ambulatory surgical centers. It generally doesn't apply when someone chooses an out-of-network freestanding residential or outpatient program for planned treatment.

Can a rehab balance bill me?

An in-network program can't bill you more than your cost share for covered services. An out-of-network program may bill the difference between its charge and your plan's allowed amount, unless a law or an agreement (such as a single-case agreement) prevents it. Ask for it in writing before admission.

Does the out-of-network deductible count toward the in-network deductible?

It depends on the plan. Some plans count spending toward both; many keep them separate. Ask the rep and write the answer on the VOB.

Why did the insurance company send the payment to the patient?

Some plans pay out-of-network claims to the member instead of the provider. Ask on the VOB call whether the plan honors an assignment of benefits, and have the family's financial agreement say what happens if the check goes to them.

Is the out-of-network out-of-pocket maximum the most a family can owe?

No. It caps the member's deductible and coinsurance out of network, if the plan has one at all; it doesn't include balance bills or services the plan doesn't cover.

Sources

1. HealthCare.gov glossary, "Balance billing" and "Out-of-pocket maximum/limit." healthcare.gov · healthcare.gov
2. CMS, Uniform Glossary of Coverage and Medical Terms (allowed amount). cms.gov
3. CMS, No Surprises: consumer protections. cms.gov
4. 45 CFR Part 149, Surprise billing and transparency requirements (§149.30 definitions; §149.420 notice and consent). ecfr.gov
5. CMS, Good faith estimate required notice for uninsured and self-pay individuals. cms.gov
6. Texas Department of Insurance, "Texas protects consumers from surprise medical bills"; "Senate Bill 1264" rules; "Fully insured vs. self-insured." tdi.texas.gov · tdi.texas.gov · tdi.texas.gov
7. CMS, "The Mental Health Parity and Addiction Equity Act (MHPAEA)." cms.gov
8. 42 CFR §438.206, Availability of services (Medicaid managed care). ecfr.gov
9. 42 U.S.C. §1320a-7a(i)(6) (waivers of cost sharing); 18 U.S.C. §220 (Eliminating Kickbacks in Recovery Act); Texas Occupations Code chapter 102 (Patient Solicitation Act). law.cornell.edu · law.cornell.edu · statutes.capitol.texas.gov

This guide is general information, not legal or billing advice. Cima isn't a law firm or an accounting firm. Plan terms, laws and payer policies differ and change; confirm with each plan, its documents and your attorney.