Levels of care

The ASAM Criteria, 4th edition (2023)

The continuum has four broad levels with decimal gradations. x.1 and x.5 levels are clinically managed. x.7 levels are medically managed, meaning medical staff lead treatment planning. [1][2]

Level 1, Outpatient:1.0 Long-Term Remission Monitoring (new); 1.5 Outpatient Therapy (fewer than 9 clinical hours a week); 1.7 Medically Managed Outpatient.
Level 2:2.1 Intensive Outpatient (9–19 hours a week); 2.5 High-Intensity Outpatient (20 or more hours a week; formerly Partial Hospitalization); 2.7 Medically Managed Intensive Outpatient.
Level 3, Residential:3.1 Clinically Managed Low-Intensity; 3.5 Clinically Managed High-Intensity; 3.7 Medically Managed (with 3.7 BIO, biomedically enhanced).
Level 4:Medically Managed Inpatient (plus 4 Psychiatric).
Co-occurring enhanced (COE)standards apply at several levels.

Withdrawal management is no longer a separate track. 3rd edition WM levels map as follows: 1-WM to 1.7, 2-WM to 2.7, 3.2-WM to 3.5, and 3.7-WM to 3.7. [3]

Recovery residences are not a level of care. The 4th edition's admission criteria may recommend a recovery residence in addition to Level 1 or 2 care. [1][2] NARR's four levels (I peer-run, II monitored, III supervised, IV clinical) describe housing support, not clinical intensity. Only Level IV includes clinical treatment. [5]

Placement basics

Placement follows a multidimensional assessment across six dimensions. In the 4th edition these are: (1) intoxication, withdrawal, and addiction medications; (2) biomedical conditions; (3) psychiatric and cognitive conditions; (4) substance use–related risks; (5) recovery environment interactions; (6) person-centered considerations. [4]
Admission should be based on current need, not prerequisites like "failed" prior treatment. [2]
Movement along the continuum should follow progress and outcomes, not a fixed length of stay. [2]
Informed consent and shared decision-making are part of the standard. [2]

Billing and brokering risk points

"Florida model."The 2016 Palm Beach grand jury described it as "outpatient treatment coupled with recovery housing." Patients were billed in PHP or IOP while housed in unregulated homes. Treatment providers often paid for the housing in exchange for referrals, and testimony put the average referral fee at about $500 per patient per week. [7] Florida licenses a version of this as "day or night treatment with community housing" (at least 5 hours a day and 25 hours a week). [11] Florida did not ban common ownership. It treats placing a patient into a provider's own community-housing component as a referral, subject to the certified-residence rule, whether or not the housing is affiliated (Fla. Stat. § 397.4873(4)(b)). [17]
Urine drug testing.The grand jury described confirmatory tests ordered without review, with one patient's insurer billed more than $600,000 in seven months, mostly for drug tests. [7] Because EKRA covers referrals to laboratories, lab kickbacks are covered too. [12]
Level churning.Watch for automatic step-downs on a schedule, or readmission to detox or residential after each relapse with no new assessment. Both cut against ASAM's needs-based placement. The grand jury described patients kept in a treatment–relapse cycle for years. [2][7]
Housing tied to treatment.Common ownership of a sober living home and a treatment program is not prohibited in California. It is regulated: a certified outpatient program or lab that owns, leases, or manages housing for its patients must use a separate housing contract that says the resident pays for housing, that payment does not depend on insurance, and that includes a repayment plan for subsidized rent; the housing offer can't depend on using the program's services (§ 11831.65(a)). Licensed facilities offering discounted post-discharge housing face the same conditions (§ 11831.65(b)). Transportation is limited (§ 11831.65(c)). Owners, officers, directors, and agents must disclose any ownership, control, or financial interest in a recovery residence to DHCS, or the program risks suspension or revocation (§ 11833.05). Referral remuneration is barred (§ 11831.6), and free rent given to induce attendance can also fall under EKRA (18 U.S.C. § 220) and Ins. Code § 750. [6][12][14][15][16]
Room and board.Medi-Cal does not pay for room and board. Counties may use block grant funds for recovery residences. Commercial plans generally cover the clinical service, not the housing. A claim that includes housing, or rent waived in exchange for attendance, is a billing and inducement issue. [18]
Out-of-network targeting.The grand jury found out-of-state patients were targeted because out-of-network plans paid more. [7]

Are levels consistent across states?

The framework is broadly shared. The details are not.

Shared:CMS requires SUD-specific placement criteria in Section 1115 SUD demonstrations, and ASAM is the example CMS names. [13] California's Health & Safety Code § 11834.015 requires DHCS to adopt ASAM or an equivalent as the minimum standard. Every licensed residential AOD facility must hold a DHCS level-of-care designation (3.1, 3.2-WM, 3.3, or 3.5) or an ASAM certification. [9] Pennsylvania replaced its own placement criteria (PCPC) with ASAM for all licensed providers on July 1, 2018. [10]
Different:State license categories don't map one-to-one to ASAM. California's designations still use 3rd-edition numbers (3.2-WM, 3.3). Florida licenses its own service components under Fla. Stat. § 397.311: addictions receiving facility, day or night treatment, day or night treatment with community housing, detoxification, intensive inpatient, and others. [9][11] States also move to the 4th edition on their own schedules. Washington's Medicaid agency, for example, published a 4th-edition transition guide in 2026. [4] Recovery housing varies most: mandatory licensure in Arizona, voluntary certification tied to referral limits in Florida, licensure tied to public funding in Pennsylvania, and no state license for housing-only homes in California.

For practice: verify both the license category and the ASAM level a program claims. Check them against what the patient actually receives.

Levels of care

The ASAM Criteria, 4th edition (2023)

Placement basics

Billing and brokering risk points

Are levels consistent across states?

Sources