Substance Abuse Treatment
Covered by Insurance in California (SB 855)

• If you or a loved one needs detox, inpatient rehab, or outpatient substance abuse treatment, California law may require your health insurance plan to cover it.
• Under Senate Bill 855 (SB 855), insurance companies must follow accepted clinical standards when determining medical necessity for mental health and substance use disorder treatment. This means coverage decisions must be based on real medical guidelines — not cost-cutting internal rules.
  • Source: California Department of Insurance SB 855 Fact Sheet
  • Clinical Guidelines for Substance Abuse Treatment
• SB 855 applies to most individual and employer health plans regulated by the state of California, including many plans offered through Covered California. The law significantly strengthens mental health parity protections and expands access to medically necessary care, including residential treatment when appropriate.
  • medicare.gov/ /mental-health-substance-use-disorder

How to Get Substance Abuse Treatment Covered – Step by Step

Most people don’t realize there is a process to getting treatment approved. Understanding the steps can make the difference between a denial and getting the care you need.

• Step 1: Clinical Evaluation –
  • A licensed professional determines the level of care needed (detox, outpatient, or residential).
• Step 2: Level of Care Determination –
  • Based on clinical standards such as ASAM criteria.
• Step 3: Insurance Submission –
  • Documentation is submitted to your health plan.
• Step 4: Approval or Denial –
  • Many claims are initially denied.
• Step 5: Appeal Using SB 855 –
  • You have strong appeal rights if treatment is medically necessary.

What SB 855 Means for You

• Insurance cannot deny medically necessary substance abuse treatment.
• Plans must follow accepted clinical guidelines, not internal cost-saving rules.
• Coverage must include the appropriate level of care, including residential rehab.
• Treatment cannot be limited to short-term care only.
• If no adequate local provider is available, insurance must allow out-of-network care.

In practical terms, this means you are not limited to providers in your immediate area. If a quality treatment facility is not available locally, you may be able to receive care at a facility located farther away — even 50, 100, or 200 miles from home — if that is what meets medical necessity.   Source: Steinberg Institute – Mental Health Parity Enforcement

7 Tests to Find a Quality Substance Abuse Treatment Facility

Not all rehab facilities are equal. Some are excellent, while others may provide minimal care or focus primarily on billing insurance. Use these seven tests to evaluate any detox or rehab program.

• 1. Licensed and Accredited – Look for state licensing and national accreditation (CARF, Joint Commission).
• 2. Proper Insurance Handling – The facility should work directly with your insurance and handle authorizations.
• 3. Medical and Clinical Staff – Treatment should involve doctors, nurses, and licensed addiction professionals.
• 4. Individualized Treatment Plan – Avoid one-size-fits-all programs.
• 5. Continuum of Care – Includes detox, residential, outpatient, and aftercare planning.
• 6. Transparency – Clear explanation of services, expectations, and costs.
• 7. Insurance Coordination – Will assist with appeals and documentation if needed.
• LA County Website to Find Treatment Centers
  • public health.lacounty.gov/sapc/

Common Problems (And How We Help)

• “Insurance denied my rehab.” – Denials are common, but often reversible under SB 855.
• “No providers in my network.” – You may qualify for out-of-network coverage.
• “I don’t know where to start.” – We help guide you step-by-step.
• “I’m worried about scams.” – We help identify legitimate, licensed providers.

Resources

• medicaid.gov/ substance-use-disorders
• Understanding Your Mental Health & Substance Use Disorder Benefits Department of Labor pdf

Get Help Understanding Your Options

You don’t have to figure this out alone. As a licensed California insurance agent, we can help you understand your benefits, explain your options, and guide you through the process of getting treatment covered — at no additional cost to you.

• Email [email protected]
• Schedule a Zoom Consultation

Educational information only. We do not provide medical advice or treatment placement services. We can help you understand your insurance options and connect with appropriate licensed providers.