How Medicare Covers Substance Abuse and Mental Health Patients

How to Navigate Medicare and Mental Health at a Behavioral Hospital - Port  St. Lucie Hospital, Inc. | Florida Mental Health Services

While health insurance policies like Medicare cover a wide array of treatment services for people with drug abuse disorders and mental illness, special rules limit reimbursement and coverage. Medicare’s coverage of these types of services for behavioral health, drug abuse disorders, and mental illness are not as extensive as their coverage for other types of services.

Substance use disorders and alcoholism treatment

Health insurance policies will pay for SUD and alcoholism treatment in both outpatient and inpatient settings. Part A of the policy will pay for inpatient drug abuse therapy; people will pay the same as co-players for other kinds of inpatient hospitalization. Likewise, Part B of the policy will pay for outpatient, outpatient drug abuse therapy services from hospitals, outpatient departments, or clinics. Covered services and items for alcoholism and SUD therapies include:

Patient education when it comes to treatment and diagnosis


Outpatient prescription medications through Part D

Follow-up for post-hospitalization

Structured Assessment and Brief Intervention or SBIRT

Prescription meds like Methadone for inpatients 

Check out this site for more details about SBIRT.

Structured Assessment and Brief Intervention is an early intervention that targets people who have not yet passed the severity of a diagnostic level drug use disorder. These types of services are provided in outpatient settings such as hospital outpatient departments or clinics. They are covered by insurance policies when patients show early signs of substance dependency and abuse. Public health approaches to treat these illnesses consists of three components:

Screening – Assessing patients for substance use behaviors using screening tools

Brief intervention – Engaging individuals showing risky drug addiction

Referral to therapies – Providing referrals to brief treatments or additional therapy to patients who need more services

Insurance policies likewise cover new preventive benefits that offer counseling and screening for individuals who show signs of substance and alcohol abuse but are not dependent and don’t usually show signs of abuse.


Health insurance covers care in psychiatric facilities that only treat mental problems when inpatient care is needed for psychiatric therapy. As with treatment in general hospitals, policies pay for the needed inpatient hospitalization for up to three months per benefit period. 

Beneficiaries who needed hospitalization for more than three months are entitled to a lifetime of 60 reserve days that they can use only once in their lifetime. Unlike general hospital care, nursing in psychiatric facilities is limited to 190 days in total. 

Click to know more about Medicare eligibility.

Once these maximum days have been reached, coverage of psychiatric facilities is exhausted and can’t be renewed. The limitation can be harsh for people who need lengthy and frequent inpatient care in specialized hospitals. If they required long hospitalization to look after various physical ailments, no limitations will be placed on the number of insured hospitalizations to which the patient would be entitled. 

People should remember that the 190-day limit only applies to care in specialized psychiatric facilities. Suppose a person requires inpatient levels of care for mental health treatment. In that case, they can receive the needed care at general hospitals, and coverage rules follow the general Part A facility stay requirements.

CMS data: Fewer adults, children covered by Medicaid used mental health  services last year - MedCity News

Partial hospitalization

These programs offer intensive mental health therapy on an outpatient basis to patients. For people suffering from these illnesses, there is an expectation that their condition and level of mental functioning will improve and prevent relapse, as well as inpatient hospitalization. These programs are located in community mental health facilities and hospital outpatient departments. These programs include:

Group or individual session

Therapeutic activities

Diagnostic services

Family counseling when it comes to the condition of the patient

Social worker, occupational therapists, and psychiatric nurse’s services

Patient education

To know more about this topic, check out articles about Medicare and substance abuse and other write-ups about health care insurance.

Insurance policies do not cover meals and transportation provided for partial hospitalization cases, but it does include other partial hospitalization services. These things need to be provided under the direct supervision of physicians pursuant to individualized treatment plans. 

The aids need to be crucial to the care of the patient’s condition. If the physician rides between the outpatient department and the hospital, these policies will sometimes deny the claim on the grounds that there is no direct supervision present. A person needs to show that their treatment is under doctors’ direct and personal supervision, and the care is being provided in line with their individualized nursing plan.

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