CurrentProvidence Health PlanPolicy 307

Residential Mental Health Treatment Facilities

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This policy establishes medical-necessity criteria and minimum program standards for residential mental health treatment facilities, including ASAM Level 3.5 and 3.7 residential substance use disorder treatment centers, for Providence commercial and Medicaid/OHP products.

Policy Summary

PayerProvidence Health Plan

PolicyResidential Mental Health Treatment Facilities

Policy CodePolicy 307

Change TypeAnnual reviewno material changes

Effective DateOct 1, 2026

Last ReviewSep 1, 2026

Next Review DateSep 1, 2027

Key ActionDocument facility licensure, accreditation, staffing, structured treatment, supervision, clinical services, and reintegration planning.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3Residential treatment facility categories

24/7Supervision and monitoring

72 hoursPsychiatrist interview after admission

Weekly

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CurrentProvidence Health PlanPolicy 307

Residential Mental Health Treatment Facilities

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Sign up for Providence Health Plan Policy 307 alerts

Get alerted when Policy 307 changes without checking for updates manually.

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Policy Summary

PayerProvidence Health Plan

PolicyResidential Mental Health Treatment Facilities

Policy CodePolicy 307

Change TypeAnnual reviewno material changes

Effective DateOct 1, 2026

Last ReviewSep 1, 2026

Next Review DateSep 1, 2027

Key ActionDocument facility licensure, accreditation, staffing, structured treatment, supervision, clinical services, and reintegration planning.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3Residential treatment facility categories

24/7Supervision and monitoring

72 hoursPsychiatrist interview after admission

Weekly

Physician visits and individual therapy

Not coveredCustodial placement

2Applicable revenue codes

Residential Treatment Facility Coverage Criteria

Residential mental health treatment center criteria

Residential mental health treatment centers must meet all of the following treatment-center-specific criteria to be considered medically necessary.

Residential mental health facility standards: The facility holds required state licensure and Joint Commission or CARF accreditation for the level of care provided; has a multidisciplinary treatment team led by a Board Certified or Board Eligible psychiatrist; provides a structured treatment program; meets the member's mental and physical health needs; provides 7-days-per-week, 24-hour supervision and monitoring; and focuses treatment on stabilization, functional improvement, and reintegration.

The structured program includes a psychiatrist face-to-face interview within 72 hours of admission, physician visits at least weekly or more often if clinically indicated, individual therapy at least weekly or more often if indicated, and multiple daily group therapy sessions, including family therapy for children/adolescents.

24-hour supervision and clinical availability: The facility provides an onsite nurse available 24/7 who can provide psychiatric nursing services, and a psychiatrist available 24/7 at least by telephone for crisis intervention, medical and psychiatric issues, and medication prescribing.24 hours per day, 7 days per week

Transitional active treatment: The residential program is transitional, is designed to reintegrate the member into continued treatment at less restrictive levels of care, is not based on a preset number of days, and is not primarily for custodial reasons or housing.

Admission and continued stay must be based on active treatment of current clinical presentations.

ASAM Level 3.5 SUD residential criteria

ASAM Level 3.5 residential treatment centers for substance use disorders must meet all of the following treatment-center-specific criteria to be considered medically necessary.

Level 3.5 facility and staffing standards: The facility holds required state licensure and Joint Commission or CARF accreditation, has direct affiliations or close coordination with more and less intensive levels of care or services, provides 24/7 emergency consultation or services, uses licensed or credentialed clinical staff in an interdisciplinary team, has allied health professional staff onsite 24 hours per day, and has one or more SUD-competent clinicians onsite or by telephone 24 hours per day.24 hours per day, 7 days per week

A physician assistant or nurse practitioner may perform designated physician-extender duties where licensed to do so.

Level 3.5 structured treatment program: The program provides an individualized comprehensive biopsychosocial assessment; an individualized treatment plan with short-term measurable goals and activities; interdisciplinary review of assessments, plans, and updates; a physical examination; medical, psychiatric, psychological, laboratory, and toxicology services based on severity and urgency; daily clinical services; random drug screening; evidence-based individual and group therapies; medication education and management; addiction pharmacotherapy; motivational enhancement; counseling and health education; medication-adherence monitoring; community reinforcement; and services for family and significant others.Daily clinical services

ASAM Level 3.7 SUD residential criteria

ASAM Level 3.7 residential treatment centers for substance use disorders must meet all applicable treatment-center-specific criteria to be considered medically necessary.

Level 3.7 facility and admission standards: The facility holds required state licensure and Joint Commission or CARF accreditation, and admission includes physician availability to assess the member in person, an SUD-focused nursing assessment by a registered nurse, and an individualized comprehensive biopsychosocial assessment.Physician assessment within 24 hours of admission

The available policy excerpt provides these Level 3.7 requirements but does not include additional requirements beyond the admission assessment standards.

Residential treatment is not covered when admission or continued stay is primarily for custodial purposes rather than active treatment of a current clinical presentation. This includes housing, supportive living, assistance with activities of daily living, maintaining a level of function, or avoiding return to the home environment.

A residential mental health treatment facility that does not meet the required licensure or accreditation, multidisciplinary staffing, structured treatment, 24-hour supervision and monitoring, active-treatment, and reintegration standards is not considered medically necessary under the policy.

Applicable Revenue Codes

Covered Revenue CodesRevenueCovered

1001	Residential Treatment, Psychiatric
1002	Behavioral Health Accommodations Residential Chemical Dependency

Documentation and Denial Risks

Documentation Required

Residential Mental Health Facility Documentation

Residential mental health treatment centers must document that they meet all treatment-center-specific standards before services can be considered medically necessary. Oregon facilities must meet the definition of a residential facility under ORS 430.010; facilities not contracted with Providence Health Plan or not located in Oregon must hold licensure appropriate to their state accreditation requirements.

Licensure and accreditation: State licensure, when required, and Joint Commission or CARF accreditation for the level of care provided.
Clinical leadership and staffing: A multidisciplinary treatment team led by a Board Certified or Board Eligible psychiatrist.
Structured treatment: Psychiatrist face-to-face interview within 72 hours of admission; physician visits at least weekly or more often when clinically indicated; individual therapy at least weekly or more often when indicated; and multiple daily group therapy sessions, including family therapy for children/adolescents.
Whole-person care: Services addressing the member's mental and physical health needs.
24/7 supervision and monitoring: Seven-day-per-week, 24-hour supervision; an onsite nurse available 24/7 for psychiatric nursing services such as observation, crisis intervention, and medication administration; and a psychiatrist available 24/7, at least by phone, for crisis intervention, medical and psychiatric treatment, and prescribing.

Policy Background

Residential mental health treatment facilities are non-hospital facilities that provide intensive psychiatric services and structured treatment programs for individuals with mental health and substance use disorders. These programs generally provide daily individual and group therapy to improve functioning and support reintegration into the community.

Key Definitions

Residential Mental Health Treatment Facility

Facility typeNon-hospital facility offering psychiatric services and treatment programs.

Population servedIndividuals with mental health and substance use disorders.

Program focusIntensive daily individual and group therapy aimed at improving functionality and reintegrating patients into their communities.

ASAM Level 3.5

AdolescentsClinically Managed Medium-Intensity Residential Services.

AdultsClinically Managed High-Intensity Residential Services.

Care setting and purpose

Residential Level-of-Care Criteria

Residential mental health treatment

Residential mental health treatment level of care requires the following facility and active-treatment standards.

Admission and facility standards: The facility must be appropriately licensed and accredited, staffed by a multidisciplinary team led by a Board Certified or Board Eligible psychiatrist, provide a structured treatment program, meet mental and physical health needs, and provide 24-hour supervision and monitoring with required nursing and psychiatric availability.Psychiatrist interview within 72 hours of admission

This policy establishes minimum facility standards and does not address admission criteria for residential mental health treatment for children/adolescents or adults.

Continued residential treatment: Continued stay must be based on active treatment of current clinical presentations, must not be primarily custodial, and must support stabilization, functional improvement, and reintegration into less restrictive treatment services.

The program is not based on a preset number of days.

Covered Treatment Modalities

Residential psychiatric treatment

Covered residential psychiatric treatment includes all of the following modalities and service frequencies:

Residential mental health treatment modalities: The structured program includes psychiatrist assessment, physician visits, individual therapy, and multiple daily group therapy sessions, including family therapy for children/adolescents.Individual therapy and physician visits at least weekly; multiple daily group therapy sessions

Services may occur more frequently when clinically indicated.

Residential substance use disorder treatment

Covered residential substance use disorder treatment includes all of the following modalities and clinical services:

SUD treatment modalities: ASAM residential SUD programs provide evidence-based cognitive, behavioral, and other individual and group therapies, medication education and management, addiction pharmacotherapy, motivational enhancement, recovery-skills development, community reinforcement, and family or significant-other services.

Service Frequency and Facility Monitoring

Physician Visits

ServicePhysician visits during residential treatment.

Minimum frequencyAt least weekly.

Clinical exceptionMore frequently when clinically indicated.

Individual Therapy

ServiceIndividual therapy during residential treatment.

Minimum frequencyAt least weekly.

Clinical exceptionMore frequently when indicated.

Policy Summary

PayerProvidence Health Plan

PolicyResidential Mental Health Treatment Facilities

Policy CodePolicy 307

Change TypeAnnual reviewno material changes

Effective DateOct 1, 2026

Last ReviewSep 1, 2026

Next Review DateSep 1, 2027

Key ActionDocument facility licensure, accreditation, staffing, structured treatment, supervision, clinical services, and reintegration planning.

SourceLink

On This Page

Activities must support stabilization, recovery-skill development, productive daily activity, and reintegration into family and community living.

Treatment purpose and structure: Treatment focused on stabilization, functional improvement, and reintegration; transitional programming leading to continued treatment at less restrictive levels of care; no preset number of treatment days; and admission or continued stay based on active treatment of the current clinical presentation rather than custodial needs.

Documentation Required

SUD Residential Program Documentation

For SUD residential treatment, document the facility-specific standards applicable to the authorized ASAM level. The record should establish the member's clinical needs, individualized treatment, interdisciplinary oversight, measurable progress, and services supporting recovery and reintegration.

Level 3.5 facility requirements: State licensure when required and Joint Commission or CARF accreditation; direct affiliations or close coordination with more and less intensive levels of care; 24/7 emergency services and telephone or in-person physician or licensed physician-extender consultation; licensed or credentialed clinical staff working with allied health professionals in an interdisciplinary team; allied health professionals onsite 24/7; and a clinician competent in SUD treatment onsite or available by telephone 24/7.
Assessment and planning: An individualized comprehensive biopsychosocial assessment; an individualized treatment plan with short-term, measurable goals and activities; assessment, plan, and updates reflecting clinical progress and reviewed by an interdisciplinary treatment team; and a physical examination within a reasonable time based on the member's medical condition.
Clinical services and monitoring: Medical, psychiatric, psychological, laboratory, and toxicology services based on severity and urgency; daily counseling and clinical monitoring; random drug screening; evidence-based individual and group therapies; medication education and management; addiction pharmacotherapy; educational, occupational, or recreational activities adapted to the member; motivational enhancement; medication-adherence monitoring; and health education.
Recovery and reintegration: Planned activities to stabilize addiction symptoms and develop recovery skills, including relapse prevention, interpersonal choices, and a recovery-supportive social network; counseling and interventions for productive daily activity and, when indicated, reintegration into family living; planned community reinforcement; and services for family and significant others.
Level 3.7 admission documentation: Joint Commission or CARF-accredited and appropriately licensed facility; physician available to assess the member in person within 24 hours of admission; RN-conducted SUD-focused nursing assessment at admission; and an individualized, comprehensive biopsychosocial assessment.

Denial Risk

Residential Mental Health Standards: Denial Risk

Failure to document or maintain any required residential mental health facility standard creates denial risk because the facility may not meet the minimum conditions for medical necessity. These are facility-specific standards and do not establish admission criteria for residential mental health treatment for children/adolescents or adults.

Denial risk applies when required state licensure or applicable accreditation through the Joint Commission or CARF is absent or not appropriate to the level of care.
Denial risk applies when multidisciplinary staffing, Board Certified or Board Eligible psychiatrist leadership, structured treatment, required therapy and visit frequency, or mental and physical health services are not demonstrated.
Denial risk applies when 24/7 supervision and monitoring, an onsite psychiatric nurse, or 24/7 psychiatrist availability is not provided or documented.
Denial risk applies when treatment is not transitional and focused on stabilization, functional improvement, and reintegration, is based on a preset number of days, or lacks evidence of active treatment of the current clinical presentation.

Denial Risk

Custodial or Housing-Based Placement

Admission or continued stay is not medically necessary when the primary purpose is custodial rather than active treatment of the member's current clinical presentation. Custodial care may be present regardless of setting when services primarily provide nonmedical assistance, meet personal needs, maintain a level of function, provide supportive living, or avoid return to the home or community environment.

Do not support residential placement primarily for housing, a supportive living environment, or avoidance of returning to the home environment.
Do not treat assistance with activities of daily living, by itself, as evidence of active residential treatment.
Document the active clinical needs, treatment interventions, measurable progress, and planned transition to less restrictive services supporting admission or continued stay.

Denial Risk

ASAM Residential Standards: Denial Risk

ASAM Level 3.5 and 3.7 residential SUD facilities must meet the applicable treatment-center-specific standards to be considered medically necessary. Missing facility, staffing, assessment, treatment, or monitoring documentation creates denial risk.

For Level 3.5, denial risk includes failure to document required licensure or accreditation, coordination with more and less intensive services, 24/7 emergency and clinical coverage, interdisciplinary staffing, individualized assessment and treatment planning, measurable goals, progress review, physical examination, clinically indicated medical and behavioral health services, daily clinical monitoring, random drug screening, medication monitoring, recovery programming, community reinforcement, or family services.
For Level 3.7, denial risk includes failure to document required licensure or accreditation, physician in-person assessment within 24 hours of admission, RN SUD-focused nursing assessment at admission, or an individualized comprehensive biopsychosocial assessment.
Records should demonstrate treatment appropriate to the applicable ASAM level, including clinical progress and services designed to support stabilization, recovery, and reintegration into less restrictive care.

Note

Product-Specific Coverage Rules

Coverage and medical-necessity review depend on the member's product. Apply the Oregon Health Plan requirements first for OHP members, and apply Providence commercial medical-policy criteria when applicable and when no controlling OHP criteria govern.

Oregon Health Plan: Services for OHP members follow the OHP Prioritized List and Oregon Administrative Rules as the primary coverage resources. The medical-policy criteria may be applied when the OARs and OHP Prioritized List do not provide applicable criteria.
Commercial products: Apply the applicable Providence Health Plan medical-necessity rules and document compliance with the residential facility standards described in this policy.
Medicare: This Company policy applies to Medicare Plan members only when directed by a separate Medicare policy. Investigational services are considered not medically necessary for Medicare members.

Provides 24-hour care with trained counselors to stabilize multidimensional imminent danger and prepare patients for outpatient treatment.

Treatment milieuPatients are able to tolerate and use a full active milieu or therapeutic community.

Clinical resourcesA 24-hour treatment setting staffed by designated addiction treatment, mental health, and general medical personnel.

ASAM Level 3.7

AdolescentsMedically Monitored High-Intensity Inpatient Services.

AdultsMedically Monitored Intensive Inpatient Services Withdrawal Management.

Nursing and physician availabilityProvides 24-hour nursing care with a physician available for significant problems in Dimensions 1, 2, or 3.

Clinical needIntended for patients with subacute biomedical or emotional, behavioral, or cognitive problems severe enough to require inpatient treatment.

Withdrawal-management contextPatients require medication and have a recent history of withdrawal management at a less intensive level of care, with past and current inability to complete withdrawal management and enter continuing addiction treatment.

Custodial Care

Nonmedical assistanceAssistance with activities of daily living.

Personal needs or functionHealth-related services provided primarily to meet the member’s personal needs or maintain a level of function, regardless of setting.

Supportive living or home avoidanceRemaining in treatment for a supportive living environment or to avoid returning to the home environment rather than receiving active treatment.

ASAM Level 3.5 residential SUD treatment

ASAM Level 3.5 residential SUD treatment requires the following level-of-care and active-treatment standards.

Admission and program standards: The facility must meet applicable licensure, accreditation, coordination, staffing, assessment, treatment planning, medical service, daily clinical service, monitoring, therapy, medication, recovery, and family-service requirements for Level 3.5 residential SUD treatment.24-hour staffing and clinical availability

The program is intended to stabilize addiction symptoms and prepare the member for less restrictive continuing treatment.

Active treatment and reintegration: Treatment must include ongoing clinical monitoring, counseling, recovery-skill development, evidence-based therapies, medication management and adherence monitoring, community reinforcement, and planned reintegration into family and community living or less restrictive services.Daily clinical services

ASAM Level 3.7 residential SUD treatment

ASAM Level 3.7 residential SUD treatment requires the following admission and facility standards.

Facility and admission assessment standards: The facility must hold required state licensure and Joint Commission or CARF accreditation. Admission must include physician availability for an in-person assessment, an SUD-focused RN nursing assessment, and an individualized comprehensive biopsychosocial assessment.Physician assessment within 24 hours of admission

The available policy excerpt does not provide additional Level 3.7 criteria beyond these standards.

Daily clinical services for Level 3.5

Services are adapted to the member's condition, stage of readiness, and treatment needs.

Group Therapy and Facility Monitoring

Group therapyMultiple daily group therapy sessions.

SupervisionSupervision is provided 7 days per week, 24 hours per day.

Monitoring and clinical availabilityThe facility provides 24-hour monitoring, with an onsite nurse available 24/7 and a psychiatrist available 24/7 at least by telephone.