Garrett Legacy Group

Author: Penny, Content Specialist Garrett Legacy Group LLC
Status: Draft for Jay Garrett’s review. Do not schedule.
Date: August 20, 2026
Category: Other behavioral health RCM educational topics

Build a Controlled Billing Process for Substance Use Disorder Services

Billing for addiction treatment centers requires more than submitting claims. Build a process that connects patient intake, payer verification, ASAM level of care, clinical documentation, coding, authorization, claims, payment posting, and follow-up.

Use current payer manuals. Confirm state Medicaid requirements. Review commercial contracts. Check Medicare guidance before submitting claims.

Do not assume that one code or billing method applies to every payer. Payer rules vary by plan, state, provider type, service setting, and level of care.

Use this guide to strengthen substance abuse billing services and reduce avoidable revenue loss.

Review our guide to behavioral health CPT codes for additional outpatient coding controls.

1. Verify Benefits and Behavioral Health Carve-Outs

Complete insurance verification before the first service. Confirm the patient’s active coverage and behavioral health benefits.

Do not verify only the medical payer. Some plans use a separate behavioral health administrator or substance use disorder network.

Record the following information:

• Patient name and date of birth.
• Member ID and group number.
• Effective and termination dates.
• Behavioral health payer or carve-out vendor.
• In-network and out-of-network benefits.
• Deductible and remaining deductible.
• Copayment or coinsurance.
• Out-of-pocket maximum.
• Residential, PHP, IOP, outpatient, and detox benefits.
• Prior authorization requirements.
• Visit, day, or unit limits.
• Required claim form and payer ID.
• Call reference number and representative name.

Confirm whether the facility, rendering provider, supervising provider, and laboratory are enrolled with the payer. Do not rely on facility enrollment alone.

Complete separate verification for:

• Commercial insurance.
• Medicaid managed care.
• Traditional Medicaid.
• Medicare.
• Medicare Advantage.
• Third-party behavioral health administrators.
• Self-pay patients.

Use the behavioral health RCM services page to review the front-end controls needed for eligibility, authorization, claims, and payment posting.

2. Match the ASAM Level of Care to the Claim

Document the patient’s assessed level of care. Connect the treatment plan to that level. Use the documentation to support the billed service.

ASAM alignment does not replace payer policy. It supports the clinical and operational explanation for the service. The payer may require its own criteria, authorization process, modifiers, revenue codes, or claim format.

Review the ASAM coverage guidance and confirm the payer’s current requirements.

Use the following operational framework:

• Early intervention: Bill screening and brief intervention services when supported by the record.
• ASAM 1.0 outpatient: Use professional psychotherapy, diagnostic evaluation, medication management, or payer-specific behavioral health codes.
• ASAM 2.1 IOP: Confirm whether the payer requires a per-diem code, daily units, or individual service lines.
• ASAM 2.5 PHP: Confirm the program’s daily service requirements and medical necessity documentation.
• ASAM 3.1 through 3.5 residential: Confirm the approved residential level, per-diem code, and facility claim requirements.
• Withdrawal management: Separate detoxification billing from residential or outpatient treatment billing.
• OTP services: Follow the payer’s opioid treatment program billing model.

Document the reason the patient requires the selected level of care. State why a lower level is not sufficient. Update this information during concurrent reviews.

3. Select the Correct CPT and HCPCS Code Family

Choose the code family based on the payer, provider, service, setting, and contract. Do not select a code because it appears on a general SUD billing list.

Common CPT codes include:

• 90791: Psychiatric diagnostic evaluation without medical services.
• 90832: Individual psychotherapy, 30 minutes.
• 90834: Individual psychotherapy, 45 minutes.
• 90837: Individual psychotherapy, 60 minutes.
• 90853: Group psychotherapy.
• 90833, 90836, and 90838: Psychotherapy add-on codes used with an appropriate evaluation and management service.
• 99408: Alcohol or substance abuse structured screening and brief intervention, 15 to 30 minutes.
• 99409: Alcohol or substance abuse structured screening and brief intervention, more than 30 minutes.

Use documented time. Do not round up. Do not bill psychotherapy add-on codes as standalone services.

Medicare may use different code requirements for screening and treatment. For example, Medicare SBIRT services may require G0396 or G0397 instead of CPT 99408 or 99409. Review the applicable CMS substance use screening and treatment guidance.

HCPCS codes may apply to Medicaid, managed care, facility, or contract-specific services. Common examples include:

• H0015: Alcohol and drug treatment program, intensive outpatient, per diem or payer-defined unit.
• H0038: Self-help or peer services, when covered and supported by the service definition.
• H2012: Psychosocial rehabilitation services, commonly reported in time-based units under payer rules.
• H0047: Alcohol or drug abuse services not otherwise classified.
• H0001: Alcohol and drug assessment.
• H0004: Behavioral health counseling and therapy.
• H0005: Group counseling.
• H0018 and H0019: Residential treatment codes used by some programs and payers.
• H2034 and H2035: Residential or comprehensive outpatient services under applicable payer schedules.
• H2036: Alcohol or drug treatment program, per diem, when allowed by the payer.

Check the exact code definition, unit, modifier, place of service, revenue code, and claim type. Do not assume that a code is payable because another payer accepts it.

4. Apply Payer-Specific Billing Controls

Commercial Payers

Commercial plans commonly use CPT codes for professional services. They may use S-codes, H-codes, or contract-specific residential and IOP codes for facility services.

Confirm:

• Network status.
• Behavioral health administrator.
• Authorization number.
• Approved level of care.
• Per-diem or unit requirements.
• Daily attendance requirements.
• Required modifiers.
• Claim submission deadline.
• Timely filing limit.
• Patient responsibility rules.

Do not apply one commercial payer’s policy to another commercial payer.

Medicaid and Managed Care

Medicaid programs frequently use HCPCS H-codes, T-codes, S-codes, or state-specific procedure codes. Requirements differ by state and managed care organization.

Confirm the state fee schedule. Review the provider manual. Check whether the claim is professional or institutional.

Verify:

• Required assessment code.
• Approved ASAM level.
• Daily or 15-minute unit definition.
• Revenue code.
• Modifier requirements.
• Service authorization.
• Place of service.
• Encounter or threshold requirements.
• Documentation retention rules.

Use current Medicaid guidance. ASAM identifies Medicaid behavioral health resources for operational review.

Medicare

Use Medicare-specific instructions for outpatient services, IOP, OTP services, and drug testing.

Medicare now covers intensive outpatient services for qualifying behavioral health and substance use disorder treatment. Review the current CMS intensive outpatient program billing requirements.

Follow Medicare OTP requirements for bundled services. Review CMS office-based SUD treatment billing guidance when applicable.

5. Control Urine Drug Screen and Laboratory Billing

Separate presumptive testing, definitive testing, and routine urinalysis. Each service requires a distinct clinical and coding review.

Common presumptive drug screen codes include:

• 80305: Qualitative drug screen using a non-instrumented method.
• 80306: Qualitative drug screen using an instrumented method.
• 80307: Qualitative drug screen using a high-complexity instrumented method.

Common definitive testing codes include:

• G0480: Definitive drug testing for one to seven drug classes.
• G0481: Definitive drug testing for one to seven drug classes under the applicable code definition.
• G0482: Definitive drug testing for eight to fourteen drug classes.
• G0483: Definitive drug testing for fifteen or more drug classes.

Review the current code descriptors before publication or claim submission. Confirm the method, number of drug classes, laboratory certification, and payer requirements.

Codes 81001 through 81003 generally relate to urinalysis procedures. Do not use routine urinalysis codes as a substitute for a drug screen.

Document:

• Clinical reason for testing.
• Treatment or monitoring purpose.
• Test method.
• Collection date.
• Ordering provider.
• Laboratory performing the service.
• Results and clinical response.
• Frequency justification.

Do not order or bill testing automatically without clinical support. Excessive or unsupported testing may create medical necessity denials, audits, or recoupment risk.

6. Manage Residential Per-Diem Billing

Residential treatment often uses bundled per-diem billing. The claim may represent a defined day of treatment rather than each individual service.

Before billing, confirm:

• Admission date.
• Registration date.
• Actual treatment start date.
• Approved level of care.
• Authorized dates.
• Daily attendance.
• Covered services included in the bundle.
• Services excluded from the bundle.
• Discharge date.
• Leave or absence days.
• Transfer date.
• Readmission date.
• Required revenue code.
• Required condition code or modifier.

Do not bill a full per diem when the payer defines a partial-day or discharge-day rule. Do not bill overlapping residential, IOP, PHP, or detox services without confirming that the payer permits the combination.

Compare the charge record to the census and clinical record. Resolve date differences before claim submission.

Treat admission, registration, and discharge dates as separate data points. A registration date does not always establish a billable treatment day. A discharge date does not always support a full per diem.

7. Calculate Patient Responsibility and Sliding Scales

Inform patients about financial responsibility before treatment whenever possible. Use verified benefits. State that payer estimates are not guarantees of payment.

Calculate and record:

• Deductible.
• Copayment.
• Coinsurance.
• Noncovered services.
• Out-of-network responsibility.
• Self-pay balance.
• Deposit requirements.
• Sliding-scale adjustment.
• Financial assistance approval.
• Payment plan terms.

Create a written sliding-scale policy. Apply it consistently. Base adjustments on documented financial criteria. Obtain required patient acknowledgments. Do not change the balance without recording the reason and approval.

Separate insurance billing from patient billing. Post payer payments, contractual adjustments, and denials before sending statements. Return inaccurate statements to billing for correction.

8. Build an SUD Denial and AR Recovery Process

SUD denials often relate to authorization, level of care, dates, documentation, code selection, bundled services, eligibility, and payer carve-outs.

Categorize denials by root cause:

• No authorization.
• Incorrect authorization number.
• Expired authorization.
• Level of care mismatch.
• Missing ASAM support.
• Incorrect CPT or HCPCS code.
• Invalid modifier.
• Incorrect revenue code.
• Duplicate per-diem billing.
• Ineligible provider or facility.
• Behavioral health carve-out mismatch.
• Drug testing medical necessity.
• Timely filing.
• Coordination of benefits.
• Patient responsibility error.

Assign every denial to a staff member. Set a due date. Submit corrected claims or appeals promptly.

For aged accounts, separate claims by payer, balance, age, and denial reason. Start with high-value claims and claims within the appeal or timely filing period.

Use the five behavioral health AR recovery strategies to structure follow-up. Include substance abuse claims in weekly AR reporting.

Track:

• Clean claim rate.
• Initial denial rate.
• Authorization denial rate.
• Average days in AR.
• Insurance AR over 90 days.
• Appeal overturn rate.
• Cash collected by payer.
• Write-offs by root cause.
• Patient balance aging.

Review results monthly. Correct the workflow that created the denial.

Addiction Treatment Billing Checklist

Complete these actions:

• Verify eligibility before admission.
• Confirm behavioral health carve-outs.
• Check network participation.
• Obtain required authorization.
• Document the ASAM level of care.
• Match CPT or HCPCS codes to the service.
• Confirm payer-specific units and modifiers.
• Separate presumptive testing from definitive testing.
• Reconcile admission and discharge dates.
• Review residential per-diem rules.
• Calculate patient responsibility accurately.
• Apply sliding-scale adjustments consistently.
• Submit clean claims on schedule.
• Assign every denial.
• Appeal supported SUD claims.
• Work aged AR weekly.
• Track payer and service-line KPIs.
• Review coding and payer manuals regularly.

Garrett Legacy Group provides specialized substance abuse billing services, behavioral health billing services, behavioral health RCM services, behavioral health AR recovery, and behavioral health credentialing services.

Review the seven behavioral health RCM mistakes and guide to selecting mental health billing services for additional controls.

Share This Draft

• Share this guide with your billing supervisor.
• Send it to your clinical documentation team.
• Review it with your admissions staff.
• Use the checklist during your next revenue cycle meeting.
• Bookmark it for staff training.
• Contact Garrett Legacy Group for a focused billing review.

Contact Information

• Email: glginfo@garrettlegacygroup.com
• Phone: 979-461-6108
• Website: garrettlegacygroup.com

Author: Penny, Content Specialist Garrett Legacy Group LLC

Status: Draft for Jay Garrett’s review. Do not schedule.