Billing and Coding: Psychiatric Inpatient Hospitalization

This article contains coding and other guidelines that complement the Local
Coverage Determination (LCD) for Psychiatric Inpatient Hospitalization.

**National Coverage Provisions:**

_For services in an IPF (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 for the purpose of diagnosis; and_
  * _supervised and evaluated by a physician._

_Such factors as diagnosis, length of hospitalization, and the degree of
functional limitation, while useful as general indicators of the kind of care
most likely being furnished in a given situation, are not controlling in
deciding whether the care was active treatment. Refer to 42 CFR 482.61 on
"Conditions of Participation for Hospitals" for a full description of what
constitutes active treatment_ (CMS Publication 100-02, _Medicare Benefit
Policy Manual_ , Chapter 2, Section 30.2.2.1).

_The services must be provided in accordance with an individualized program of
treatment or diagnosis developed by a physician in conjunction with staff
members of appropriate other disciplines on the basis of a thorough evaluation
of the patient's -strengths and disabilities. The plan of treatment must be
recorded in the patient's medical record in accordance with 42 CFR
412.27(c)(3) and the Conditions of Participation for Hospitals in 42 CFR
482.61._

_The services provided must reasonably be expected to improve the patient's
condition or must be for the purpose of diagnostic study. It is not necessary
that a course of therapy have as its goal the restoration of the patient to a
level which would permit discharge from the institution although the treatment
must, at a minimum, be designed both to reduce or control the patient's
psychotic or neurotic symptoms that necessitated hospitalization and improve
the patient's level of functioning_ (CMS Publication 100-02, _Medicare Benefit
Policy Manual_ , Chapter 2, Section 30.3.2).

_The types of services which meet the above requirements would include not
only psychotherapy, drug therapy, and electroconvulsive therapy, but also such
therapeutic activities as occupational therapy, recreational therapy, and
milieu therapy, provided the therapeutic activities are expected to result in
improvement (as defined above) in the patient's condition. If the only
activities prescribed for the patient are primarily diversional in nature (
i.e., to provide some social or recreational outlet for the patient), it would
not be regarded as treatment to improve the patient's condition. In many large
hospitals these adjunctive services are present and part of the life
experience of every patient. In a case where milieu therapy, (or one of the
other adjunctive therapies) is involved, it is particularly important that
this therapy be a planned program for the particular patient and not one where
life in the hospital is designated as milieu therapy_ (CMS Publication 100-02,
_Medicare Benefit Policy Manual_ , Chapter 2, Section 30.2.3).

In accordance with the above definition of improvement _, the administration
of antidepressant or tranquilizing drugs that are expected to significantly
alleviate a patient's psychotic or neurotic symptoms would be termed active
treatment (assuming that the other elements of the definition are met).
However, the administration of a drug or drugs does not necessarily constitute
active treatment.  _

_Physician participation in the services is an essential ingredient of active
treatment. The services of qualified individuals other than physicians, e.g.,
social workers, occupational therapists, group therapists, attendants, etc.,
must be prescribed and directed by a physician to meet the specific needs of
the individual. In short, the physician must serve as a source of information
and guidance for all members of the therapeutic team who work directly with
the patient in various roles. It is the responsibility of the physician to
periodically evaluate the therapeutic program and determine the extent to
which treatment goals are being realized and whether changes in direction or
emphasis are needed. Such evaluation should be made on the basis of periodic
consultations and conferences with therapists, reviews of the patient's
medical record, and regularly scheduled patient interviews, at least once a
week (_ CMS Publication 100-02 _, Medicare Benefit Policy Manual,_ Chapter 2,
Section 30.2.3).

_When the physician periodically evaluates the therapeutic program to
determine the extent to which treatment goals are being realized and whether
changes in direction or emphasis are needed (based on consultations and
conferences with therapists, review of the patient's progress as recorded on
the medical record and the physician's periodic conversations with the
patient), active treatment would be indicated. A finding that a patient is not
receiving active treatment will not in itself preclude payment for physicians'
services under Medicare Part B. As long as the professional services rendered
by the physician are reasonable and necessary for the care of the patient,
such services would be reimbursable under the medical insurance program._ (CMS
Publication 100-02, _Medicare Benefit Policy Manual_ , Chapter 2, Section
30.2.3).

_The period of time covered by the physician's certification is referred to a
period of active treatment. This period should include all days on which
inpatient psychiatric facility services were provided because of the
individual's need for active treatment (not just the days on which specific
therapeutic or diagnostic services are rendered). For example, a patient's
program of treatment may necessitate the discontinuance of therapy for a
period of time or it may include a period of observation, either in
preparation for or as a follow-up to therapy, while only maintenance or
protective services are furnished. If such periods were essential to the
overall treatment plan, they would be regarded as part of the period of active
treatment_ (CMS Publication 100-02, _Medicare Benefit Policy Manual_ , Chapter
2, Section 30.2.2.1).

_The fact that a patient is under the supervision of a physician does not
necessarily mean the patient is getting active treatment. For example, medical
supervision of a patient may be necessary to assure the early detection of
significant changes in his/her condition; however, in the absence of a
specific program of therapy designed to effect improvement, a finding that the
patient is receiving active treatment would be precluded (_ CMS Publication
100-02 _, Medicare Benefit Policy Manual,_ Chapter 2, Section 30.2.2.1).

_The program's definition of active treatment does not automatically exclude
from coverage services rendered to patients who have conditions that
ordinarily result in progressive physical and/or mental deterioration.
Although patients with such diagnosis will most commonly be receiving
custodial care, they may also receive services which meet the program's
definition of active treatment (e.g., where a patient with Alzheimer's disease
or Pick's disease received services designed to alleviate the effects of
paralysis, epileptic seizures, or some other neurological symptom, or where a
patient in the terminal stages of any disease received life- supportive care).
A period of hospitalization during which services of this kind were furnished
would be regarded as a period of active treatment._ (CMS Publication 100-02,
_Medicare Benefit Policy Manual_ , Chapter 2, Section 30.2.2.1).  



_Payment may be made for items and services furnished in or by a participating
State or local government hospital, including a psychiatric or tuberculosis
hospital, which serves the general community. A psychiatric hospital to which
patients convicted of crimes are committed involuntarily is considered to be
serving the general community if State law provides for voluntary commitment
to the institution. However, payment may not be made for services furnished in
or by State or local hospitals which serve only a special category of the
population, but do not serve the general community, e.g., prison hospitals._

This policy does NOT address the following issues:

1\. _Life Time Limits and Spell of Illness Limits_ to psychiatric
hospitalization services as defined by the CMS Publication 100-02, _Medicare
Benefit Policy Manual_ , Chapters 3 and 4. Nothing in this policy can be used
to either expand or contract those limits; however, coverage may be denied for
medical necessity reasons even though the beneficiary has not exhausted the
life time limit or spell of illness limit for psychiatric hospitalization
services.  
2\. _Notice to Beneficiaries_ as described in CMS Publication 100-04,
_Medicare Claims Processing Manual_ , Chapter 1, Sections 60 - 60.1.1.  
3\. _Psychiatric Advance Directives_ as defined in 42 CFR Section
482.13(b)(3). All requirements related to Psychiatric Advance Directives must
be met as part of the Hospital Conditions of Participation for Patients
Rights.  
4\. _Chemical or Physical Restraints, Seclusion, or Behavior Management_
within a psychiatric plan of care. These issues are addressed extensively in
the Hospital Patient's Rights Legislation published in 64 FR 36070, July 2,
1999. All applicable requirements described in this publication must be met.  
5\. _Certification of Facilities_ as psychiatric hospitals, psychiatric
Inpatient Units within a Psychiatric Institution, or Psychiatric Inpatient
Units within a General Hospital as defined in CMS Publication 100-01,
_Medicare General Information, Eligibility, and Entitlement Manual_ , Chapter
5, Sections 20.3, 20.4, 20.5, 20.6 and 20.7. All requirements described in the
Medicare interpretive manuals apply.6. _Items and Services Furnished, Paid for
or Authorized by Governmental Entities_ as defined by CMS Publication 100-02,
_Medicare Benefit Policy Manual_ , Chapter 16, Section 50.3.1.

**Coding Information:**

Procedure codes may be subject to National Correct Coding Initiative (NCCI)
edits or OPPS packaging edits. Refer to NCCI and OPPS requirements prior to
billing Medicare.

For services requiring a referring/ordering physician, the name and NPI of the
referring/ordering physician must be reported on the claim.

A claim submitted without a valid ICD-10-CM diagnosis code will be returned to
the provider as an incomplete claim under Section 1833(e) of the Social
Security Act.

The diagnosis code(s) must best describe the patient's condition for which the
service was performed. For diagnostic tests, report the result of the test if
known; otherwise the symptoms prompting the performance of the test should be
reported.

**Documentation Requirements:**  
  
Documentation that supports medical necessity and active treatment may take
many forms. These documentation requirements are intended to help providers
identify those documentation elements that will best support the medical
necessity of the services they render. It is not expected that every item of
these documentation requirements will appear in every record. Upon medical
review, the IPF record will be reviewed as a whole, and services may be denied
only if there is insufficient documentation to support the medical necessity
of the claim.  
  
The patient's medical record must contain documentation that fully supports
the medical necessity for services included within the related LCD. (See
"Indications and Limitations of Coverage.") This documentation includes, but
is not limited to, relevant medical history, physical examination, and results
of pertinent diagnostic tests or procedures.

_The reasons for admission must be clearly documented as stated by the patient
or others significantly involved, or both._

Listing an _ICD-10-CM_ code in the Mental Disorders category (F01- F99) does
not assure coverage of the specific service. Upon medical review, coverage
criteria specified in the related Local Coverage Determination shall be
applied to the entire medical record to determine medical necessity.

Medicare contractors may automatically deny a claim without any manual review
if a National Coverage Determination (NCD) or a Local Coverage Determination
(LCD) specifies the circumstances under which a service is denied and those
circumstances exist, or the service is specifically excluded from Medicare
coverage by statute.

  
  
**Inpatient Psychiatric Facility Services Certification and Recertification
Requirements:**

_  
The physician's recertification should state:  
_

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

    1. _Treatment which could reasonably be expected to improve the patient's condition;_  
  

    2. _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_

  1. _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._

For convenience, the period covered by the physician's certification and
recertification is referred to a period during which the patient was receiving
active treatment. If the patient remains in the hospital but the period of
"active treatment" ends (e.g., because the treatment cannot reasonably be
expected to improve the patient's condition, or because intensive treatment
services are not being furnished), program payment can no longer be made even
though the patient has not yet exhausted his/her benefits. Where the period of
"active treatment" ends, the physician is to indicate the ending date in
making his recertification. If "active treatment" thereafter resumes, the
physician should indicate, in making his recertification, the date on which it
resumed (CMS Publication 100-01, _Medicare General Information, Eligibility,
and Entitlement Manual_ , Chapter 4, Section 10.9)  
  
 **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 of 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;
  * Description of 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 activities of daily living (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
  * _ICD-10-CM/_ DSM-5TM diagnoses, including all five axes of the multiaxial assessment as described in the DSM-5TM.

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:  

    1. within the first three (3) program days after admission;
    2. by the physician, the multidisciplinary treatment team, and the patient; and should be
    3. based upon the problems identified in the physician's diagnostic evaluation, psychosocial and nursing assessments.
  2. The treatment plan should include: 
      1. the specific treatments ordered, including the type, amount, frequency, and duration of the services to be furnished;
      2. the expected outcome for each problem addressed; and
      3. contain 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 (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.