Psychiatric Inpatient Hospitalization

Title XVIII of the Social Security Act, §1862 (a)(1)(A) allows coverage and payment for only those services that are considered to be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.

Title XVIII of the Social Security Act, §1862(a)(7) excludes routine physical examinations.

Title XVIII of the Social Security Act, §1812(a)(1) benefits shall consist of payment entitlement for inpatient hospital services or inpatient critical access hospital services for up to 150 days during any spell of illness minus 1 day for each day of such services in excess of 90 received during any preceding spell of illness.

Title XVIII of the Social Security Act, §1812(b)(3) inpatient psychiatric hospital services furnished after a total of 190 days during a lifetime.

Title XVIII of the Social Security Act, §1814(4) medical records document that services were furnished while the individual was receiving intensive treatment, admission and related services for a diagnostic study, or equivalent services.

Title XVIII of the Social Security Act, §§1861(a) and (c) defines the terms “spell of illness” and “inpatient psychiatric hospital services.”

Title XVIII of the Social Security Act, §1861(f)(1) the term "psychiatric hospital" means an institution which is primarily engaged in providing, by or under the supervision of a physician, psychiatric services for the diagnosis and treatment of mentally ill persons.

42 CFR §409.62 describes the lifetime maximum on inpatient psychiatric care.

42 CFR §410.32(2)(iii)(A) psychological diagnostic testing.

42 CFR §411.4(b) Special conditions for services furnished to individuals in custody of penal authorities.

42 CFR §412.23(a) excluded hospitals: classifications-psychiatric hospitals.

42 CFR §412.27 Excluded psychiatric units: Additional requirements.

42 CFR §482.61 Condition of participation: Special medical record requirements for psychiatric hospitals.

CMS Internet-Only Manual, Pub. 100-01, Medicare General Information, Eligibility, and Entitlement Manual, Chapter 4, §10.9

CMS Internet-Only Manual, Pub. 100-01, Medicare General Information, Eligibility, and Entitlement Manual, Chapter 5, §§20.3, 20.4, 20.5, 20.6, 20.7

CMS Internet-Only Manual, Pub. 100-02, Medicare Benefit Policy Manual, Chapter 2, §§10.1, 20, 30, 30.1, 30.2, 30.2.2.1, 30.3.1, 70

CMS Internet-Only Manual, Pub. 100-03, Medicare National Coverage Determinations Manual, Chapter 1, Part 1, §§30.4. 30.5

CMS Internet-Only Manual, Pub. 100-03, Medicare National Coverage Determinations Manual, Chapter 1, Part 2, §§130.1, 130.3, 130.4, 130.6, 130.8 and 160.25

Abstract:

Inpatient psychiatric hospitalization provides 24 hours of daily care in a structured, intensive, and secure setting for patients who cannot be safely and/or adequately managed at a lower level of care. This setting provides daily physician (MD/DO) supervision, 24-hour nursing/treatment team evaluation and observation, diagnostic services, and psychotherapeutic and medical interventions.

Inpatient psychiatric care may be delivered in a psychiatric hospital, a psychiatric hospital acute care unit within a psychiatric institution, or a psychiatric inpatient unit within a general hospital.

Indications:

Medicare patients admitted to inpatient psychiatric hospitalization must be under the care of a physician who is knowledgeable about the patient. The physician must certify/recertify (see Associated Information- Documentation Requirements section) the need for inpatient psychiatric hospitalization. The patient must require active treatment of his/her psychiatric disorder. The patient or legal guardian must provide written informed consent for inpatient psychiatric hospitalization in accordance with state law. If the patient is subject to involuntary or court-ordered commitment, the services must still meet the requirements for medical necessity in order to be covered by Medicare.

Admission Criteria (Intensity of Service):

The patient must require intensive, comprehensive, multimodal treatment including 24 hours per day of medical supervision and coordination because of a mental disorder. The need for 24 hours of supervision may be due to the need for patient safety, psychiatric diagnostic evaluation, potential severe side effects of psychotropic medication associated with medical or psychiatric comorbidities, or evaluation of behaviors consistent with an acute psychiatric disorder for which a medical cause has not been ruled out.

The acute psychiatric condition being evaluated or treated by inpatient psychiatric hospitalization must require active treatment, including a combination of services such as intensive nursing and medical intervention, psychotherapy, occupational and activity therapy. Patients must require inpatient psychiatric hospitalization services at levels of intensity and frequency exceeding what may be rendered in an outpatient setting, including psychiatric partial hospitalization. There must be evidence of failure at, inability to benefit from, or unacceptable risk in an outpatient treatment setting. Claims for care delivered at an inappropriate level of intensity will be denied.

The following parameters are intended to describe the severity of illness and intensity of service that characterize a patient appropriate for inpatient psychiatric hospitalization. These criteria do not represent an all-inclusive list and are intended as guidelines.

Admission Criteria (Severity of Illness):

Examples of inpatient admission criteria include (but are not limited to):

1. Threat to self requiring 24-hour professional observation:

• suicidal ideation or gesture within 72 hours prior to admission;
• self mutilation (actual or threatened) within 72 hours prior to admission;
• chronic and continuing self destructive behavior (e.g., bulimic behaviors, substance abuse) that poses a significant and/or immediate threat to life, limb, or bodily function.

2. Threat to others requiring 24-hour professional observation:

• assaultive behavior threatening others within 72 hours prior to admission
• a significant verbal threat to the safety of others within 72 hours prior to admission.

3. Command hallucinations directing harm to self or others where there is the risk of the patient taking action on them.

4. Acute disordered/bizarre behavior or psychomotor agitation or retardation that interferes with the activities of daily living (ADLs) so that the patient cannot function at a less intensive level of care during evaluation and treatment.

5. Cognitive impairment (disorientation or memory loss) due to an acute psychiatric disorder that endangers the welfare of the patient or others.

6. For patients with a dementing disorder for evaluation or treatment of a psychiatric comorbidity (e.g., risk of suicide, violence, severe depression) warranting inpatient admission.

7. A mental disorder causing major disability in social, interpersonal, occupational, and/or educational functioning that is leading to dangerous or life-threatening functioning, and that can only be addressed in an acute inpatient setting.

8. A mental disorder that causes an inability to maintain adequate nutrition or self-care, and family/community support cannot provide reliable, essential care, so that the patient cannot function at a less intensive level of care during evaluation and treatment.

9. Failure of outpatient psychiatric treatment so that the beneficiary requires 24-hour professional observation and care. Reasons for the failure of outpatient treatment could include:

• increasing severity of psychiatric symptoms;
• noncompliance with medication regimen due to the severity of psychiatric symptoms;
• inadequate clinical response to psychotropic medications;
• the inability of the patient to participate in an outpatient psychiatric treatment program due to the severity of psychiatric symptoms.

NOTE: For all symptom sets or diagnoses: the severity and acuity of symptoms and the likelihood of response to treatment, combined with the requirement for an intensive, 24-hour level of care are the significant factors in determining the necessity of inpatient psychiatric treatment.

Active Treatment:

For services in an inpatient psychiatric facility to be designated as active treatment, they must be:

• provided under an individualized treatment or diagnostic plan;
• reasonably expected to improve the patient’s condition or are for the purpose of diagnosis; and
• supervised and evaluated by a physician.

Discharge Criteria (Intensity of Service):

Patients in inpatient psychiatric care may be discharged by stepping down to a less intensive level of outpatient care. Stepping down to a less intensive level of service than inpatient hospitalization would be considered when patients no longer require 24-hour care for safety, diagnostic evaluation, or active treatment as described above. These patients would become outpatients, receiving either psychiatric partial hospitalization or individual outpatient mental health services.

Discharge Criteria (Severity of Illness):

Patients whose clinical condition improves or stabilizes, who no longer pose an impending threat to self or others, and who do not still require 24-hour care available in an inpatient psychiatric unit should be stepped down to outpatient care. Patients who are persistently unwilling or unable to participate in active treatment of their psychiatric condition would also be appropriate for discharge.

Limitations:

1. Failure to provide documentation to support the necessity of test(s) or treatment(s) may result in denial of claims or services. This includes medical records:

• that do not support that the services are reasonable and necessary;
• in which the documentation is illegible; or
• where medical necessity for inpatient psychiatric services is not appropriately certified by the physician.

2. The following services do not represent reasonable and medically necessary inpatient psychiatric services and coverage is excluded:

• services which are primarily social, recreational or diversion activities, or custodial or respite care;
• services attempting to maintain psychiatric wellness for the chronically mentally ill;
• treatment of chronic conditions without acute exacerbation;
• vocational training;
• when supporting medical records fail to document the required level of physician supervision and treatment planning process;
• electrosleep therapy;
• electrical aversion therapy for treatment of alcoholism;
• hemodialysis for the treatment of schizophrenia;
• transcendental meditation;
• multiple electroconvulsive therapy (MECT).

3. It is not reasonable and medically necessary to provide inpatient psychiatric hospital services to the following types of patients:

• patients who require primarily social, custodial, recreational, or respite care;
• patients whose clinical acuity requires less than 24 hours of supervised care per day;
• patients who have met the criteria for discharge from inpatient hospitalization;
• patients whose symptoms are the result of a medical condition that requires a medical/surgical setting for appropriate treatment;
• patients whose primary problem is a physical health problem without a concurrent major psychiatric episode;
• patients with alcohol or substance abuse problems who do not have a combined need for active treatment and psychiatric care that can only be provided in the inpatient hospital setting;
• patients for whom admission to a psychiatric hospital is being used as an alternative to incarceration.

4. Coverage criteria specified in this Local Coverage Determination (LCD) shall be applied to the entire medical record to determine medical necessity.

N/A

N/A

Documentation Requirements

Documentation supporting medical necessity should be legible, maintained in the patient's medical record, and must be made available to the A/B MAC upon request.

Inpatient Psychiatric Facility Services Certification and Recertification Requirements:

There is a difference in the content of the certification and recertification statements. The required physician's statement should certify that the inpatient psychiatric facility admission was medically necessary for either: (1) treatment which could reasonably be expected to improve the patient's condition, or (2) diagnostic study.

The physician's recertification should state each of the following:

1. that inpatient psychiatric hospital services furnished since the previous certification or recertification were, and continue to be, medically necessary for either:

• treatment which could reasonably be expected to improve the patient's condition; or
• diagnostic study;

2. the hospital records indicate that the services furnished were either intensive treatment services, admission and related services necessary for diagnostic study, or equivalent services, and

3. effective July 1, 2006, physicians will also be required to include a statement recertifying that the patient continues to need, on a daily basis, active treatment furnished directly by or requiring the supervision of inpatient psychiatric facility personnel.

Initial Psychiatric Evaluation:

The initial psychiatric evaluation with medical history and physical examination should be performed within 24 hours of admission, but in no case later than 60 hours after admission, in order to establish medical necessity for psychiatric inpatient hospitalization services. In order to support the medical necessity of admission, the documentation in the initial psychiatric evaluation should include, whenever available, the following items:

• patient’s chief complaint;
• a description of the acute illness or exacerbation of chronic illness requiring admission;
• current medical history, including medications and evidence of failure at or inability to benefit from a less intensive outpatient program;
• past psychiatric and medical history;
• history of substance abuse;
• family, vocational and social history;
• mental status examination, including general appearance and behavior, orientation, affect, motor activity, thought content, long and short term memory, estimate of intelligence, capacity for self harm and harm to others, insight, judgment, capacity for ADLs;
• physical examination;
• formulation of the patient’s status, including an assessment of the reasonable expectation that the patient will make timely and significant practical improvement in the presenting acute symptoms as a result of the psychiatric inpatient hospitalization services; and
• diagnosis/diagnoses.

A team approach may be used in developing the initial psychiatric evaluation and the plan of treatment (see Plan of Treatment section below), but the physician (MD/DO) must personally document the mental status examination, physical examination, diagnosis, and certification. It will not always be possible to obtain all the suggested information at the time of evaluation. In such cases, the limited information that is obtained and documented, must still be sufficient to support the need for an inpatient level of care.

Physician Orders:

Physician orders should include, but are not limited to, the following items:

1. the types of psychiatric and medical therapy services and medications;
2. laboratory and other diagnostic testing;
3. allergies;
4. provisional diagnosis(es); and
5. types and duration of precautions (e.g., constant observation X 24 hours due to suicidal plans, restraints).

Plan of Treatment:

The plan of treatment is the tool used by the physician and multi-disciplinary treatment team to implement the physician-ordered services and move the patient toward the expected outcomes and goals. Although the plan of treatment is a requirement, the format and specific items to be included are up to the provider. Documentation of the parameters below is suggested to support the medical necessity for the inpatient services throughout the patient’s stay.

1. This individualized, comprehensive, outcome-oriented plan of treatment should be developed:

• within the first 3 program days after admission;
• by the physician, the multidisciplinary treatment team, and the patient; and 
• should be based upon the problems identified in the physician’s diagnostic evaluation, psychosocial and nursing assessments.

2. The treatment plan should include:

• the specific treatments ordered, including the type, amount, frequency, and duration of the services to be furnished;
• the expected outcome for each problem addressed; and
• outcomes that are measurable, functional, time-framed, and directly related to the cause of the patient’s admission.

3. Treatment plan updates should show the treatment plan to be reflective of active treatment, as indicated by documentation of changes in the type, amount, frequency, and duration of the treatment services rendered as the patient moves toward expected outcomes. Treatment plan updates should be documented at least weekly, as the physician and treatment team assess the patient’s current clinical status and make necessary changes. Lack of progress and its relationship to active treatment and reasonable expectation of improvement should also be noted.

4. The initial treatment plan and updated plans must be signed by the physician and those mental health professionals contributing to the treatment plan.

Progress Notes:

General:

A separate progress note should be written for each significant diagnostic and therapeutic service rendered and should be written by the team member rendering the service. Although each progress note may not contain every element, progress notes should include a description of the nature of the treatment service, the patient’s status (e.g., behavior, verbalizations, mental status) during the course of the service, the patient’s response to the therapeutic intervention and its relation to the long or short term goals in the treatment plan. Each progress note should be legible, dated and signed, and include the credentials of the rendering provider. It should be clear from the progress notes how the particular service relates to the overall plan of care.

Physician Progress Notes:

Physician progress notes should be recorded at each patient encounter and contain pertinent patient history, changes in signs and symptoms with special attention to changes to the patient’s mental status, and results of any diagnostic testing. The notes should also include an appraisal of the patient’s status and progress, and the immediate plans for continued treatment or discharge. The course of the patient’s inpatient diagnostic evaluation and treatment should be able to be inferred from reading the physician progress notes.

Individual and Group Psychotherapy and Patient Education and Training Progress Notes:

Individual and group psychotherapy and patient education and training progress notes should describe the service being rendered, (i.e., name of group, group type, brief description of the content of the individual session or group), the patient’s communications, and response or lack of response to the intervention. Each progress note should reflect the particular characteristics of the therapeutic/educational encounter to distinguish it from other similar interventions.

Discharge Plan:

It is expected as a matter of good quality of care that careful discharge planning occur to enable a successful transition to outpatient care.

This LCD is being revised in order to adhere to CMS requirements per Chapter 13, Section 13.5.1 of the Program Integrity Manual, to remove all coding from LCDs. There has been no change in coverage with this LCD revision. Title XVIII of the Social Security Act 1833(e) prohibits Medicare payment for any claim lacking the necessary documentation to process the claim was removed from the CMS National Coverage Policy section of this LCD and placed in the related Billing and Coding: Psychiatric Inpatient Hospitalization A56614 article.

Anderson AJ, Micheels P, Cuoco L, Byrne T. Criteria based voluntary and involuntary psychiatric admissions modeling. International Journal of Psychosocial Rehabilitation. 1998;2(2):176-188.

Goldman RL, Weir CR, Turner CW, Smith CB. Validity of utilization management criteria for psychiatry. Am J Psychiatry. 1997;154(3):349-354.

• Psychiatric Inpatient
• Psychiatric