Mental Health Referrals From Insurance Case Managers: Balancing Care With Coverage

If you’ve been dealing with a mental health condition, navigating insurance coverage for your care plan can be extremely overwhelming. You may be considering therapy, inpatient treatment, or residential options, but insurance jargon can confuse the process.
Insurance case managers bridge the gap between you, insurance companies, and mental health treatment providers. Connecting to mental health treatments with insurance help allows you to access the care you need that’s within your plan’s coverage limits.
If the cost of treatment is weighing on you, Mission Connection can help you explore all the available payment options open to you. This article can also work as a useful guide for understanding mental health referrals from insurance case managers, as it explores:
- Who insurance case managers are
- How case managers make mental health referrals
- Referrals to services that don’t require insurance
- Balancing your care with coverage requirements
- Typical mental health treatments covered by insurers
- Deciding between different therapeutic options

Who Are Insurance Case Managers?
Case managers typically take into account people’s health and psychosocial goals, helping individuals and their families navigate services that are often complicated. However, not all case managers will assist with insurance issues, so they won’t always be able to provide mental health care coordination with insurance companies.1
This is where insurance case managers can step in. These professionals oversee healthcare plans and insurance cases to ensure that all claims are reasonable, legitimate, and necessary. Insurance case managers may also be medical professionals with strong medical knowledge, allowing them to understand client cases more deeply.2
Based on this information, it’s clear that insurance case managers have a dual role. They ensure clients receive the healthcare they need while also preventing insurance companies from spending unnecessarily.2
If you’re particularly worried about navigating insurance, make sure you get a case manager who can help with this concern specifically. As mentioned, many case managers only help with planning mental health treatment. While this is still an extremely useful form of support, you might prefer to speak with someone who is skilled in managing the insurance process.3
How Do Case Managers Make Mental Health Referrals?
Firstly, when you start working with a case manager, they’ll conduct an initial evaluation of your mental health and care so far. For instance, they will likely:
- Gather background information
- Identify your symptoms, concerns, and goals
- Assess any immediate safety risks
Additionally, your case manager will conduct ongoing assessments, checking in with your progress and making any necessary adjustments to your treatment plan. When doing so, they’ll track any changes in your symptoms, evaluate the effectiveness of your current treatments, identify new challenges, and assess whether you need additional services and referrals.3
If you do need to be referred to other services, case managers can help you obtain a list of mental health service providers from your health insurance company. This may be an online directory of in-network professionals and services, and they’ll assist you with identifying which services are within your coverage limits.3
When choosing between mental health treatment programs with insurance coverage, your case manager may encourage you to consider their location, training, specialism, and years of practice. This will allow you to connect with the best match and get the most beneficial treatment.3
You may decide to contact your chosen provider yourself or ask your case manager to help you. However, before approving your treatment, mental health insurance referral requirements typically call for clinical information from you and your physician to determine that it’s medically necessary.4
Referrals to Services That Don’t Need Insurance
- Mental health organizations: Such as the National Alliance on Mental Illness (NAMI), which can also provide referrals and useful resources.
- Professional directories: Such as the American Psychological Association, American Psychiatric Association, or American Medical Association.3
These forms of support can be useful if you’re limited by finances. Most case managers will be well-situated in your local area to recommend good services that have worked well for previous clients.
Balancing Care With Coverage
- Prioritizing urgent cases
- Integrating services across different providers
Mental health referrals from insurance case managers are likely to be well-informed, but you may want to have more involvement in your care plan. Mental health is just as important as physical health, but there’s often still a stigma felt by people with mental health conditions. In situations such as this, the mental health parity law could come in useful. Many Americans aren’t aware of this law, but it’s useful to know about.
The mental health parity law requires insurance companies to treat mental health, behavioral health, and substance use disorders equally to physical health ailments. For example, insurers couldn’t charge a $50 copay for an office visit to a psychologist but $25 for an office visit to a surgeon.6
This means your coverage shouldn’t be unfair or skewed just because it’s for mental, not physical, health. You may feel more secure in your care plan if you find out more about this law and what you’re entitled to.
Additionally, if there are delays caused by challenges between coverage and care, it may be useful to ask your case manager for other services that don’t require insurance. This way, you can still access mental health support while you wait.
What Will Your Insurance Cover?
- Partial hospitalization
- Inpatient hospitalization
- Outpatient treatment
- Emergency care
Medicare is similarly limited, typically covering the same options as above, but with limited prescription drugs.7
If you go through the Health Insurance Marketplace, every health plan must cover these ten types of services:
- Hospitalization
- Mental, behavioral, and substance use care
- Outpatient treatment
- Laboratory services
- Emergency services
- Wellness and disease management
- Rehabilitation and habilitation
- Maternity and newborn care
- Children’s care, dental, and vision
If you choose to go through Medicaid, mental health services will vary across different states.7 However, it generally includes:
- Partial hospitalization
- Inpatient hospitalization
- Outpatient treatment
- Residential care
- Crisis intervention
- Non-emergency transportation
- Psychiatric rehabilitation
- Peer support services
- Long-term care
- Case management
- Early Periodic Screening, Diagnosis, and Treatment (EPSDT) services for children
Additionally, Medicaid plans sometimes also cover in-home and family support, psychosocial rehabilitation, assertive community treatment (ACT), and multisystemic therapy (MST).7
While these lists are not exhaustive, they should give you a general idea of what kinds of services are covered by different types of insurers. Your insurance case manager will be able to give you a more specific list of your options.
Deciding Between Therapy Options
There are many mental health services suited to different needs. Your case manager will make a recommendation based on what they know about your health and what your insurer covers. These recommendations might include options such as the following:
Insurance-Approved Counseling and Therapy Programs
These may be suitable for individuals or families. Your case manager might recommend this option if your symptoms are mild to moderate and don’t require intensive monitoring. The counseling could include cognitive behavioral therapy (CBT), which examines automatic thoughts and actions that contribute to poor mental health. It also teaches coping skills and stress reduction techniques if it’s mindfulness-based CBT.
Talking Therapies
Outpatient Services
Your case manager may recommend outpatient services if you need more structured support than regular counseling can offer. You may not need 24-hour care, but would perhaps benefit from regular therapy sessions and consistent support from a mental health team.
Inpatient Services
Residential Treatment
Mission Connection: Check Your Coverage With Us
At Mission Connection, we understand that many people often need comprehensive mental health care that supports them more than traditional, once-a-week psychotherapy. This is why we offer a wide range of services, including telehealth, individual and group therapy, and partial hospitalization programs.
Our services can also be tailored to those needing medication management, trauma-informed care, and many other specific needs.
We work closely with top health insurance providers to give our clients quality mental healthcare. Get in touch to speak to one of our dedicated team members who can promptly verify your insurance coverage and begin enrolling you into our services.
References
- Giardino, A. P., & De Jesus, O. (2023). Case management. In StatPearls. StatPearls Publishing. https://www.ncbi.nlm.nih.gov/books/NBK562214/
- Insuranceopedia. (2016, August 10). Insurance case management. Insuranceopedia. https://www.insuranceopedia.com/definition/34/insurance-case-management
- Moran, M. (2024, September 17). Effective case management in mental health: A how-to guide. AIHCP. https://aihcp.net/2024/09/17/effective-case-management-in-mental-health-a-how-to-guide/
- Pestaina, K., & Pollitz, K. (2022, May 20). Examining prior authorization in health insurance. KFF. https://www.kff.org/policy-watch/examining-prior-authorization-in-health-insurance/
- Overcoming case management challenges in healthcare. (2024, April 19). Acuity International. https://acuityinternational.com/blog/case-management-challenges-in-healthcare/
- American Psychological Association. (2014). Does your insurance cover mental health services? American Psychological Association. https://www.apa.org/topics/managed-care-insurance/parity-guide
- Types of health insurance. (2024, May 14). National Alliance on Mental Illness (NAMI). https://www.nami.org/your-journey/individuals-with-mental-illness/understanding-health-insurance/types-of-health-insurance/
- Coley, D. (2023). Examining the effects of outpatient treatment for depression relapse following inpatient psychiatric hospitalization (Doctor of Nursing Practice Projects, 68). Arkansas State University. https://arch.astate.edu/cgi/viewcontent.cgi?article=1067&context=dnp-projects&utm
- Ojo, S., Okoye, T. O., Olaniyi, S. A., Ofochukwu, V. C., Obi, M. O., Nwokolo, A. S., Okeke-Moffatt, C., Iyun, O. B., Idemudia, E. A., Obodo, O. R., Mokwenye, V. C., & Okobi, O. E. (2024). Ensuring continuity of care: Effective strategies for the post-hospitalization transition of psychiatric patients in a family medicine outpatient clinic. Cureus, 16(1), e52263. https://doi.org/10.7759/cureus.52263
- National Alliance on Mental Illness. (2022, August 3). What to expect during an inpatient stay. NAMI. https://www.nami.org/people/what-to-expect-during-an-inpatient-stay/
- Herbell, K., & Ault, S. (2021). Differences in treatment approaches by residential treatment facilities. Residential Treatment for Children & Youth, 38(4), 281–304. https://doi.org/10.1080/0886571x.2021.1910613