Currentalliance_health_ncPolicy 8A-13

NC Medicaid Substance Abuse Comprehensive Outpatient Treatment (SACOT)

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Defines coverage, eligibility, and program requirements for SACOT (ASAM Level 2.5) for NC Medicaid beneficiaries aged 18 and older, including service components, EPSDT exception language, and general medical necessity criteria.

Policy Summary

Payeralliance_health_nc

PolicyNC Medicaid Substance Abuse Comprehensive Outpatient Treatment (SACOT)

Policy CodePolicy 8A-13

Change TypeNo material changes

Effective Date

Last ReviewJan 1, 2026

Next Review Date

Key ActionEnsure documentation of a completed Comprehensive Clinical Assessment (CCA) or Diagnostic Assessment and a signed service order in the Person-Centered Plan before providing SACOT.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

ASAM 2.5service level designation

18minimum age

No prior approvalprior approval

20+minimum weekly hours

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Currentalliance_health_ncPolicy 8A-13

NC Medicaid Substance Abuse Comprehensive Outpatient Treatment (SACOT)

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Policy Summary

Payeralliance_health_nc

PolicyNC Medicaid Substance Abuse Comprehensive Outpatient Treatment (SACOT)

Policy CodePolicy 8A-13

Change TypeNo material changes

Effective Date

Last ReviewJan 1, 2026

Next Review Date

Key ActionEnsure documentation of a completed Comprehensive Clinical Assessment (CCA) or Diagnostic Assessment and a signed service order in the Person-Centered Plan before providing SACOT.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

ASAM 2.5service level designation

18minimum age

No prior approvalprior approval

20+minimum weekly hours

Conversion therapynot reimbursed

Coverage and Medical Necessity Criteria

Initial Coverage Criteria

Covered when ALL of the following are met

General eligibility and age: Beneficiary enrolled in NC Medicaid; provider verifies eligibility at each service; beneficiary is 18 years of age or older for SACOT coverage; beneficiary meets criteria in Section 3.0.age >= 18

Retroactive eligibility permitted; retro payments may be claimed; some eligibility categories may restrict service

Service intensity and ASAM level: Service is ASAM Level 2.5 (SACOT) providing 20 or more hours of clinically intensive programming per week as specified in the Person-Centered Plan; includes individual, group, and family counseling, medication management (consultation/referral), service coordination, and access to psychiatric, medical, and laboratory services; services provided in amounts/frequencies/intensities appropriate to PCP objectives.>=20 hours/week

Can be provided day, weekend, or evening

Medical necessity general criteria: Procedure/product/service is individualized, consistent with symptoms or confirmed diagnosis, not in excess of needs; can be safely furnished; no equally effective and more conservative or less costly treatment available statewide; not primarily for convenience of beneficiary/caretaker/provider.

General Medicaid medical necessity criteria from Section 3.1

General and Specific Coverage Criteria (Admission)

Covered when ALL of the following are met:

General medical necessity: Service is individualized, consistent with symptoms/diagnosis, not in excess of needs, safely furnished, and no equally effective more conservative or less costly treatment is available statewide; not primarily for convenience.

From Section 3.1

SUD diagnosis: Beneficiary has a current substance use disorder diagnosis per DSM-5 or later.

From 3.2.1.a

ASAM Level 2.5 criteria: Beneficiary meets ASAM Level 2.5 SACOT admission criteria as defined in the ASAM Criteria, Third Edition, 2013.

From 3.2.1.b

Assessment and PCP: A comprehensive clinical assessment (CCA) or diagnostic assessment (DA) must be completed by a licensed professional prior to provision of SACOT; assessment findings and diagnostic information must be documented in the Person-Centered Plan (PCP); amount, duration, frequency, and intensity of services must be documented in the PCP and updated as changes occur.

Continued Stay and Discharge Criteria

Continued stay or discharge is determined by ASAM dimension review; apply the following:

Continued stay at current level is indicated if any ONE of: beneficiary has achieved initial PCP goals and requires this level to meet additional goals; beneficiary is making some progress but has not achieved goals; beneficiary is not making progress or is regressing but has capacity to resolve problems; beneficiary is actively working toward goals and the PCP is modified to identify more effective interventions.

Each of the six ASAM dimensions must be reviewed and documented

Discharge is indicated if any ONE of: SUD signs/symptoms resolved enabling self-directed recovery without SACOT; signs/symptoms have failed to respond or intensified indicating transfer to a more intensive SUD level of care; or the beneficiary or legally responsible person requests discharge.

Each of the six ASAM dimensions must be reviewed and documented

Coverage criteria for SACOT

Covered when ALL of the following organizational, staffing, program operation, and service components are met:

Organizational qualifications: Provider meets Medicaid participation qualifications, holds a current signed DHHS Provider Administrative Participation Agreement, bills only within scope of clinical practice, meets NC Medicaid provider qualification policies, complies with 10A NCAC 27G or tribal/IHS equivalents, is credentialed/contracted by the DHHS designated contractor, achieves national accreditation within one year of enrollment, and is a legally constituted entity capable of meeting enrollment and implementation standards.

From Sections 6.0–6.1

Licensure and facility: Services are provided in a facility licensed by the NC Division of Health Service Regulation Mental Health Licensure and Certification Section under 10A NCAC 27G .4500 SACOT licensure rules, or tribal/IHS equivalents as allowed by federal law.

From 6.1

Crisis response: Provider must provide 24/7 crisis response to beneficiaries receiving SACOT services, either in person, via telehealth, or by telephone as needed.24/7 availability

Staff training timeline

Staff must complete required training according to timeframes:

Prior to service: All staff must receive training in crisis response; opioid antagonist administration (naloxone or other FDA-approved antagonist); harm reduction; and SACOT ASAM Level 2.5 definition and required components prior to providing services.prior to service

Initial training may be waived if equivalent training documented within 48 months prior to hire

Within 90 days of hire: All staff must be trained in ASAM Criteria; Person-Centered Plan instructional elements; trauma-informed care*; and assessment/management of co-occurring conditions within 90 calendar days of hire.≤90 days

Training marked with * must be approved by NC DHHS recognized accreditation entity or nationally recognized program

Within 180 days of hire: All staff must be trained in introductory motivational interviewing*; pregnancy and substance use disorder; and designated therapies/practices/modalities specific to populations served within 180 calendar days of hire.

Beneficiaries must be enrolled in the NC Medicaid program and providers must verify eligibility at each service. Eligibility categories may impose service restrictions that render some beneficiaries ineligible for SACOT; providers must confirm eligibility before rendering or billing for services.

The Medicaid program does not cover certain activities related to SACOT. Examples of non-covered items include: transportation for the beneficiary or family members; any habilitation activities; time spent in recreational activities unless directly tied to planned therapy; clinical and administrative supervision of SACOT staff (treated as an indirect cost included in the rate); services that were not rendered; childcare; academic instruction; interventions not identified on the beneficiary's Person-Centered Plan (PCP); services to family members that do not address the beneficiary's needs as listed on the PCP; and room and board.

Providers must comply with all applicable agreements, federal, state, and local laws and NC Medicaid program requirements in effect at the time of service, including HIPAA and record retention. Federally recognized tribal and Indian Health Service (IHS) providers may be exempt from one or more compliance items to the extent allowed by federal laws and regulations; providers must still meet applicable confidentiality protections (e.g., 42 CFR Part 2) where required.

North Carolina Medicaid explicitly will not reimburse for conversion therapy.

Services are not covered when the beneficiary does not meet the eligibility requirements in Section 2.0, does not meet the medical necessity or admission criteria in Section 3.0, when the service duplicates another provider's billed service, or when the procedure/product/service is experimental, investigational, or part of a clinical trial.

Billing, Codes, and Service Units

Claim Typesmixed

CMS-1500/837P	Professional claim type
UB-04/837I	Institutional claim type

Diagnosis and Procedural Codingmixed

ICD-10-CM	Diagnosis coding system to highest level of specificity
PCS	Procedural Coding System (use current edition)

Covered HCPCS Codes / Billing unitHCPCSCovered

H2035

Comprehensive outpatient substance abuse services, per hour (Billing Unit = 1 unit = 1 hour)

Staff-to-Beneficiary Ratio (Group Counseling)

Staff-to-beneficiary ratio for group counselingAt least one Clinical Staff per ten (10) or fewer beneficiaries when facilitating a group counseling session.

Clinical Staff definitionClinical Staff as identified in Section 6.2 (Licensed Clinical Staff: LCAS/LCAS-A, LCSW/LCSWA, LCMHC/LCMHCA, LMFT/LMFTA, Licensed Psychologist).

Certified Clinical Staff coverageCertified Clinical Staff (CADC, CADC-I, Registrant) responsibilities must be covered by Licensed Clinical Staff when Certified Clinical Staff are not available.

Minimum Daily Billable Service Duration

Minimum daily billable service duration>= 4 hours per day — a minimum of four (4) hours per day of SACOT services must be provided to bill for services.

Provider Requirements, Claims, and Documentation

Prior Authorization

Prior approval still required for <21 when service requires it

If the service requires prior approval, prior approval remains required for beneficiaries under 21 despite EPSDT protections; see NCTracks guidance for EPSDT and prior approval details.

Prior Authorization

No prior approval required for SACOT

Medicaid does not require prior approval for SACOT services — providers may bill without prior authorization for SACOT.

Billing Rule

Program Background

Substance Abuse Comprehensive Outpatient Treatment (SACOT) is an ASAM Level 2.5 clinically intensive partial hospitalization program for adults with a primary substance use disorder. SACOT provides structured programming of 20 or more hours per week and includes individual, group, and family counseling; medication management and coordination with prescribers; access to psychiatric, medical, and laboratory services (for example, biochemical monitoring such as urine drug screening); and service coordination to support recovery objectives documented in the Person-Centered Plan.

Key Terms and Definitions

ASAM Criteria, Third Edition

DefinitionASAM Criteria, Third Edition: a comprehensive set of treatment standards using six dimensions for biopsychosocial assessment and service planning (acute intoxication/withdrawal; biomedical conditions; emotional/behavioral/cognitive conditions; readiness to change; relapse/continued use potential; recovery and living environment).

PurposeUsed to determine ASAM level of care, including ASAM Level 2.5 (SACOT) admission criteria.

Use in policyASAM Criteria referenced for admission and continued stay/discharge decisions in SACOT coverage criteria.

Medication Assisted Treatment (MAT)

DefinitionMedication Assisted Treatment (MAT): the use of FDA‑approved medications combined with counseling and behavioral therapies to provide a 'whole patient' approach to treating substance use disorders.

Program support

Policy Version and Revision History

2026-01-01original_effective_dateLatest

Policy originally implemented as a stand-alone Substance Abuse Comprehensive Outpatient Treatment (SACOT) policy

Policy Summary

Payeralliance_health_nc

PolicyNC Medicaid Substance Abuse Comprehensive Outpatient Treatment (SACOT)

Policy CodePolicy 8A-13

Change TypeNo material changes

Effective Date

Last ReviewJan 1, 2026

Next Review Date

Key ActionEnsure documentation of a completed Comprehensive Clinical Assessment (CCA) or Diagnostic Assessment and a signed service order in the Person-Centered Plan before providing SACOT.

SourceLink

On This Page

From Admission Criteria (3.2) and 3.2.1/3.2. Admission Criteria

Service order: A signed service order by a physician, licensed psychologist, physician assistant, or nurse practitioner is required prior to or on the first day of SACOT; the service order is valid for up to 12 months and must be revisited annually.12 months validity

Refer to Section 5.4 for service order requirements

Staffing and supervision: Required staff include Clinical Supervisor and Licensed Clinical Staff (LCAS/LCAS-A, LCSW/LCSWA, LCMHC/LCMHCA, LMFT/LMFTA, Licensed Psychologist) and Certified Clinical Staff (CADC, CADC-I, Registrant); roles defined; minimum one Clinical Staff per ten or fewer beneficiaries for group sessions; Clinical Supervisor may cover responsibilities when Certified Clinical Staff unavailable.1:10 ratio

Clinical Supervisor responsibilities and CADC coordination specified

Program operation hours: SACOT must operate at least 20 hours per week, offering a minimum of four hours scheduled services per service day, with in-person services available at least five days per week and no more than two consecutive days without services.20 hours/week; 4 hours/service day; ≥5 days/week

Length of stay and frequency may vary based on recovery

Service components: Program must include individual, group, and family counseling; coordination/referral for ancillary services; biochemical assessments (e.g., urine drug screens); relapse prevention, life skills, physical and reproductive health education; planned therapies adapted to developmental stage; and service coordination activities; continuous access to psychiatric assessment/treatment when warranted.

From SACOT program components

Care coordination and MAT: SACOT shall support beneficiaries prescribed or benefiting from medications including Medication Assisted Treatment (MAT); coordination with prescribing physicians and care management providers is required; toxicology and psychiatric/medical services can be billed separately.

From 6.1 and 6.3

Naloxone and overdose response: Program must ensure staff have access to naloxone or other FDA-approved opioid antagonist on site and that staff receive training on its use; programs must have policies on use, storage, and staff education regarding naloxone.

From 6.3–6.4

Training marked with * must be approved as noted

Annually: All staff must receive continuing education in evidence-based treatment practices, including crisis response and cultural competency, on an annual basis.annual

Staff hired prior to policy effective date must complete required training within one year of the original effective date; documentation of staff training must be maintained by the program

Monitoring and auditsPHPs, PIHPs and provider agencies shall monitor utilization via service record reviews and internal audits of units billed.

Tribal/IHS noteFederally recognized tribal or IHS providers may be entitled to alternate reimbursement methodologies under federal laws and regulations.

Claims and billing guidance: follow NCTracks and Medicaid billing guides

Follow NCTracks Provider Claims and Billing Assistance Guide, Medicaid bulletins, fee schedules, and NC Medicaid clinical coverage policies for coverage and reimbursement rules.

Billing Rule

Claim form and code billing: CMS‑1500 or UB‑04; H2035 = 1 hour

Submit claims on the appropriate professional (CMS-1500/837P) or institutional (UB-04/837I) form and comply with national coding guidelines; H2035 is billed per hour (billing unit = 1 hour).

Step Therapy

Concurrent treatment limitations — one provider per episode; no duplicate SUD levels

Do not provide or bill SACOT during the same episode of care (except admission/discharge day) as other specified SUD levels of care; only one provider organization may bill for SACOT in an episode of care.

Applies to SAIOP, individual/family/group SUD therapy, ASAM Levels 3.1–3.7, Partial Hospitalization, and similar services.
Peer Support Services may be billed concurrently if medically necessary.

Note

Not applicable

Not applicable.

Documentation Required

EPSDT documentation required to exceed policy limits for <21

For beneficiaries under 21, documentation must demonstrate EPSDT criteria (medical necessity to correct or ameliorate) to exceed policy limits; prior approval requirements still apply if the service requires prior approval.

Documentation Required

Documentation and assessment requirements — CCA/DA, PCP, service order, DHHS manual

Document service records consistent with the DHHS Records Management and Documentation Manual; complete and maintain the comprehensive clinical assessment/diagnostic assessment and Person-Centered Plan (PCP) with required elements, and update them as changes occur. Staff who provide services must accurately document billed services.

CCA/DA must be completed prior to provision of SACOT and documented in the PCP.
Service order must be completed by an authorized clinician prior to or on first day of SACOT.

Documentation Required

Service record and notes must document progress and billed services

Service records must document the nature and course of the beneficiary's progress in treatment; the staff member who provided the service must accurately document billed services and meet DHHS Records Management and Documentation Manual requirements.

Billing Rule

Coding specificity and documentation — use most specific codes; H2035 per hour

Report ICD-10-CM/PCS and CPT/HCPCS/UB-04 codes to the highest level of specificity in effect at the time of service; use current codebooks and, when no specific code exists, report appropriate unlisted codes with special report. H2035 is the designated HCPCS code for SACOT (billing unit = 1 hour).

Follow current CPT, HCPCS, and UB-04 Data Specifications Manual instructions.
Use most specific diagnosis and procedure codes that support medical necessity.

Denial Risk

Eligibility verification denial risk — verify Medicaid enrollment each visit

Service may be denied if the beneficiary is not enrolled in NC Medicaid or if eligibility is not verified at the time of service.

Denial Risk

Coverage exclusion risk — non‑coverage when eligibility/criteria unmet or duplicate/experimental

Services are not covered if the beneficiary does not meet Section 2.0 eligibility or Section 3.0 criteria, duplicates another provider's service, or is experimental/investigational/part of a clinical trial.

Denial Risk

Documentation noncompliance may trigger claim denial

Failure to document the nature and course of a beneficiary's progress or to meet DHHS Records Management and Documentation Manual requirements may result in claim denial.

Billing Rule

Billing unit and place‑of‑service requirements — ≥4 hours/day and licensed facility

A minimum of four (4) hours per day of SACOT services must be provided to bill for services; billing may be denied if less than the required minimum or if services are not provided in a facility licensed under 10A NCAC 27G .4500.

Billing unit: H2035 = 1 hour; ensure cumulative billed hours meet 4-hour minimum per service day.
Place of service requirement: facility licensed under 10A NCAC 27G .4500.

SACOT shall support beneficiaries prescribed or who would benefit from medications including MAT; coordination with prescribing physicians is required.

BillingCoordination and needed toxicology testing and psychiatric/medical services can be billed separately from SACOT.

Telehealth

DefinitionTelehealth: the use of two‑way real‑time interactive audio and video to provide and support health care services when participants are in different physical locations (per Policy 1‑H).

Availability for consultationsPsychiatric and other medical consultation must be available by telephone, telehealth, and in person for SACOT programs.

Policy cross‑referenceTelehealth is governed by Clinical Coverage Policy 1‑H referenced in the SACOT policy.

Comprehensive Clinical Assessment (CCA) / Diagnostic Assessment (DA)

DefinitionComprehensive Clinical Assessment (CCA) / Diagnostic Assessment (DA): an assessment completed by a licensed professional to determine ASAM level of care for admission and discharge planning; must be completed prior to provision of SACOT and documented in the Person‑Centered Plan (PCP).

Required elementsAssessment must demonstrate medical necessity, include relevant diagnostic information, and be updated as changes occur; substantially equivalent assessments may be used if they contain required elements.

BillingCCA, DA, or reassessment can be billed separately from SACOT.

SACOT Program Components

Core componentsIncludes individual, group, and family counseling; coordination and referral for ancillary services; biochemical assessments (e.g., urine drug screens); relapse prevention and support system education; life skills and crisis planning; physical and reproductive health education; and planned therapies delivered individually and in groups.

Access to specialty servicesWhile receiving SACOT, beneficiaries must have continuous access to psychiatric assessment and treatment services when indicated; programs must have agreements to ensure availability.

Care coordination and MATService coordination activities and coordination with MAT providers and prescribing physicians are required.

Naloxone requirementPrograms must ensure staff have access to naloxone or other FDA‑approved opioid antagonist on site and staff training on its use; policies on use, storage, and education are required.