Substance Use Disorder Billing: Levels of Care and the Confidentiality Rule

Substance use disorder billing starts with the level the payer bought

A payer buys a level of care. The diagnosis supports the claim, but the level decides the benefit, the code and the review. An office visit, a structured evening program and a 24-hour residential stay sit in different benefit categories, each with its own authorization language and its own documentation test.

The continuum most plans and providers use is published by the American Society of Addiction Medicine, which owns and licenses The ASAM Criteria. Its fourth edition organizes treatment into four broad levels, from outpatient through residential to medically managed inpatient, with decimal levels marking intensity inside each one. It is copyrighted, so this article names it rather than reproducing it.

The level is a set of service hours and staffing requirements the plan can audit, not a label the chart carries. A program billing H0015 has to show that it operated at least 3 hours a day and 3 days a week, because that is what the code says the program is. An authorization, in turn, is written for a level and a span of days or sessions.

The Medicare benefit that pays for medication in an opioid treatment program

Medicare Part B pays an opioid treatment program with a bundled payment built on weekly episodes of care, a benefit that began January 1, 2020. To bill it, the program must be enrolled in Medicare, certified by SAMHSA, accredited and holding a provider agreement. There is no patient copayment, and the Part B deductible applies.

The threshold to bill a full episode is one service. If any drug or non-drug service was furnished during the seven-day episode, the matching weekly bundle can be billed. A week with no medication but at least one non-drug service bills G2074, the bundle without the drug. Only the enrolled program can bill these codes.

The claim format follows the filer. A hospital-based program bills the CMS-1450 with type of bill 013x, a critical access hospital with 085x, and a freestanding program with 087x. A professional claim uses the CMS-1500 and place of service 58.

The medication codes, and the setting that changes which ones work

The medication does not travel with the code. Inside a program the drug sits in the weekly bundle, so nothing else is billed for it. In an office, treatment is billed as a monthly bundle of management, coordination, therapy and counseling, and the medication is covered separately, often through the patient’s Part D plan.

The office-based codes are G2086 for the first calendar month at 70 minutes or more, G2087 for a later month at 60 minutes or more, and G2088 for each additional 30 minutes beyond 120. The settings do not share codes. CMS states that clinicians cannot use the program codes to bill for office-based treatment.

Telehealth does not change the setting marker. The Consolidated Appropriations Act, 2021 permanently removed the geographic and originating-site restrictions on behavioral health telehealth, so a patient’s home can be the originating site and audio-only technology is permitted. CMS states that the in-person visit condition in section 1834(m) applies after December 31, 2027.

Testing codes, and the frequency limits welded to them

Drug testing here splits into two families. Presumptive testing reports the presence or absence of a drug or drug class, billed with 80305, 80306 or 80307. Definitive testing identifies specific drugs and metabolites with a concentration, billed with G0480 through G0483, tiered by how many drug classes the profile reports.

The frequency limits attach to the code family, not to the laboratory. The controlled substance testing policy pays one presumptive result per patient per date of service regardless of how many providers bill, and holds a definitive code to the same per-day limit.

That policy then sets frequency by stage of abstinence. From 0 to 90 consecutive days, presumptive testing is expected at 1 to 3 a week, and more than 3 in one week is not covered. Past 90 days it drops to 1 to 3 a month. Definitive testing runs at not more than 1 profile a week in the first 30 days, then 1 to 3 a month.

Authorization by level, and the criteria a plan applies

Authorization tracks the level, and it differs between payers. In one commercial plan’s grid, partial hospitalization at ASAM level 2.5 needs prior authorization, while the level 2.1 intensive outpatient program needs notification at admission and authorization only after 15 sessions. Another large commercial payer requires authorization for every outpatient partial hospitalization and intensive outpatient service its policy lists.

Read the payer’s grid rather than a general rule. The same revenue code can sit under notification at one plan and authorization at another, and the session count that flips one into the other is plan specific. That count belongs on the authorization log beside the date.

The clinical test behind the request is usually a level-of-care criteria set. The one most often named here is The ASAM Criteria, published and owned by the American Society of Addiction Medicine. Plans license other criteria products too: one commercial behavioral health policy states that its utilization review clinicians apply InterQual criteria. A medical necessity appeal has to answer the version the plan applied.

The confidentiality rule that is unique to this service line

One federal rule reaches this service line and almost nothing else in a billing office. Records of a patient’s substance use disorder treatment are governed by 42 CFR Part 2, which sits on top of HIPAA. A Part 2 program is a federally assisted program providing substance use disorder diagnosis, treatment or referral. The regulation defines records to include information created, received or acquired by the program, and billing information is named in that definition.

The difference from HIPAA is in the default. HIPAA lets a covered entity use and disclose protected health information for treatment, payment and health care operations. Part 2 states that records subject to it may be used or disclosed only as permitted by Part 2. The restriction applies whether or not the program believes the requester already has the information, has other means of obtaining it, has a subpoena, or asserts another justification.

Two provisions matter to billing staff. A single consent can cover all future uses and disclosures for treatment, payment and health care operations, and a covered entity that receives records under it may redisclose them as HIPAA allows, other than in legal proceedings against the patient. Part 2 has no catch-all provision permitting a disclosure because another law requires it. The version to work from is the final rule effective April 16, 2024, with compliance required by February 16, 2026.

The denials that recur in this service line

Five denials repeat here, and each has a different owner. Naming the owner is what stops the same denial arriving again next month.

CARC 15 is the code most denial reports still show for a missing authorization. X12 stopped it on May 1, 2018, and modified CARC 197 on the same date. A report carrying CARC 15 volume in 2026 is running on a retired list. Read 197 as absent, 198 as exceeded, and 284 as a number that is valid but does not apply to the billed service.

The level-change denial is the one to design around. When the clinician moves a patient up or down, the payer sees a service outside the authorized span of days or sessions. The request for the new level has to go out on or before the day of the change, with the record that explains the move. The setting denial is usually a contracting problem wearing a coding disguise: a plan may buy residential care at a licensed facility and not at a sober living home.

1. 01

   Before the first visit at a new level

   Read the payer’s authorization grid for that level and record whether it triggers notification, authorization, or neither. Note the session count that changes the trigger.

2. 02

   On the day the level changes

   File the request for the new level the same day. A level change mid-episode without a new authorization is the denial this step exists to prevent.

3. 03

   When the testing order is written

   Check the order against the documented abstinence interval and the frequency ceiling before the specimen is drawn. A frequency limit cannot be corrected after the fact.

4. 04

   Before the claim leaves

   Confirm the code family matches the setting the plan buys, and that place of service and revenue code agree with each other and with the authorization on file.

5. 05

   At the appeal

   Send the medical necessity record for a coverage denial and the authorization trail for an authorization denial. They need different paper.

Two neighbors share the same payer logic: behavioral health carve-outs, where a separate vendor owns the authorization, and behavioral health diagnosis coding, where the diagnosis has to support the level the plan paid for.

Questions practices ask us about this