**Abstract:**  
  
Inpatient psychiatric hospitalization provides twenty four (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, twenty-four (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 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.  
  
 **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 "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 accord 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  

    1. suicidal ideation or gesture within 72 hours prior to admission
    2. self mutilation (actual or threatened) within 72 hours prior to admission
    3. chronic and continuing self destructive behavior (e.g., bulemic behaviors, substance abuse) that poses a significant and/or immediate threat to life, limb, or bodily function.</ol type=a>
    4. Threat to others requiring 24-hour professional observation:  

      1. assaultive behavior threatening others within 72 hours prior to admission.
      2. significant verbal threat to the safety of others within 72 hours prior to admission.</ol type=a>
      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 Axis I 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: 
        1. Increasing severity of psychiatric symptoms;
        2. Noncompliance with medication regimen due to the severity of psychiatric symptoms;
        3. Inadequate clinical response to psychotropic medications;
        4. Due to the severity of psychiatric symptoms, the patient is unable to participate in an outpatient psychiatric treatment program.</ol type=a>
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:**  
The _italicized_ text in this portion of the policy is quoted verbatim from
CMS Publication 100-02, _Medicare Benefit Policy Manual_ , Chapter 2, Section
30:  
  
__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 restorative needs and potentialities. The plan of treatment
must be recorded in the patient's medical record in accordance with 42 CFR
482.61 on "Conditions of Participation for Hospitals"_ (CMS Publication
100-02, _Medicare Benefit Policy Manual_ , Chapter 2, Section 30.3).  
  
 _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._ Thus, the use of mild tranquilizers or sedatives solely for
the purpose of relieving anxiety or insomnia would not constitute active
treatment (CMS Publication 100-02, _Medicare Benefit Policy Manual_ , Chapter
2, Section 30.2.3).  
  
 _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). (Although it is a CMS requirement that the physician see the
patient at least once per week, this is a dated reference, referring to a time
when patients were hospitalized for long periods of time. The current standard
of practice is that the physician usually sees the patient five times per
week.)  
  
 _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).  
  
 **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 observation for safety, diagnostic
evaluation, or treatment as described above. These patients would become
outpatients, receiving either psychiatric partial hospitalization or
individual outpatient mental health services, rendered and billed by
appropriate providers. It may be appropriate for some patients to receive an
unsupervised pass to leave the hospital for a brief period in order to assess
their readiness for outpatient care.  
  
 **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
observation 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.  
  
 **Qualified Providers:**  
For Medicare coverage, inpatient psychiatric diagnostic and psychotherapy
services rendered to Medicare beneficiaries must be provided by individuals
licensed or otherwise authorized by the state in which they practice, to
render such services. While non-licensed trainees may provide psychotherapy
services as part of a training program, those psychotherapy services rendered
by individuals not licensed or authorized by the state will be considered not
medically necessary, and may contribute to the denial of inpatient psychiatric
claims. The majority of psychotherapy services must be provided by licensed
personnel to assure a satisfactory patient outcome and Medicare coverage. Non-
physician practitioners, licensed or authorized by the state, may perform
duties within their scope of practice, such as individual and/or group
psychotherapy, family counseling, occupational therapy, and diagnostic
services. Providers of inpatient psychiatric services may include:  
  
 _Physicians:_  
1\. Medical Doctor (MD) (See Title XVIII of the Social Security Act, Section
1861[r].)  
  
2\. Doctor of Osteopathy (DO) (See Title XVIII of the Social Security Act,
Section 1861[r].)  
  
 _Nonphysician Clinical Practitioners:_  
1\. Clinical Psychologists (See Title XVIII of the Social Security Act,
Sections 1861[s][2][M] and 1861[hh][2][ii].)  
  
2\. Clinical Nurse Specialists (CNSs), Adult Psychiatric and Mental Health
Nurse Practitioners, or other master's-prepared nurses with appropriate mental
health training and/or experience (See Title XVIII of the Social Security Act,
Sections 1861[s][2][K][ii] and 1861[aa][5][B].)*  
  
3\. Licensed/certified clinical social workers (CSWs), master's-prepared
social workers with additional clinical training AND licensure or state
certification (See Title XVIII of the Social Security Act, Sections
1861[s][2][N] and 1861[hh][1].)  
  
4\. Occupational Therapists (See Title XVIII of the Social Security Act,
Section 1861[g] and 42 CFR Sections 440.110 and 484.4.)  
  
* Medicare requires nurses who provide psychiatric diagnostic evaluation and psychotherapy services to have special training and/or experience beyond the standard curriculum required for an RN. Such nurses should have one or more of the following credentials: MS/MSN - Master of Science in Psychiatric Nursing (or its equivalent); CNS - Clinical Nurse Specialist in Adult Psychiatric and Mental Health Nursing; NP - Adult Psychiatric and Mental Health Nurse Practitioner.  
  
These requirements do not apply to the standard nursing services rendered to
psychiatric inpatients such as nursing evaluations, passing medications,
psychiatric education and training services, and milieu interventions.  
  
 _Other Providers Licensed or Otherwise Authorized by the State:_  
1\. Marriage and Family Therapists (MFTs).  
  
2\. Registered Therapists and Certified Alcohol and Drug Counselors.  
  
3\. Recreational Therapists.  
  
4\. Registered pharmacists who may provide individual medication counseling
and periodic educational groups  
  
5\. Other licensed or certified mental health practitioners whose scope of
practice requires a specific level of supervision (e.g., Psychological
Assistants, MFT interns and non-licensed/certified master's degree in social
work may provide services within the limits of state scope of practice,
licensure, and regulations).  
  
_Other Comments Related to Qualified Providers:_  
1\. Unlicensed psychology interns are not considered to be a covered provider
of service.  
  
2\. Supervision of trainees must at least meet the state-mandated supervision
requirements. Such supervision need not occur on the inpatient psychiatric
unit but must be documented and documentation must be maintained in the
hospital and available for inspection upon request by Medicare or submitted to
Medicare when requested.  
  
3\. Routine services provided as a part of the care of psychiatric inpatients,
oftentimes performed by bachelor degree level psychiatric technicians, under
the direction of the nursing service, need to conform to local state licensing
or certification requirements, if any.  
  
NOTE: Limits of local, state or federal scope of practice acts, legislation,
and licensure regulations apply to all practitioners within an inpatient
psychiatric treatment unit. In all cases, the most restrictive limit shall
apply (e.g., who may or may not perform individual or group psychotherapy, and
for what conditions).  
  
 **Limitations:**  

        1. Failure to provide documentation to support the necessity of test(s) or treatment(s) may result in denial of claims or services under Sections 1862(a)(1)(A) and 1833(e) of the Title XVIII of the Social Security Act. This includes medical records: 
          1. that do not support the reasonableness and necessity of service(s) furnished;
          2. in which the documentation is illegible; or
          3. where medical necessity for inpatient psychiatric services is not appropriately certified by the physician.</ol type=a>
          4. The following services do not represent reasonable and medically necessary inpatient psychiatric services and coverage is excluded under Title XVIII of the Social Security Act, Section 1862(a)(1)(A): 
            1. Services which are primarily social, recreational or diversion activities, or custodial or respite care;
            2. Services attempting to maintain psychiatric wellness for the chronically mentally ill;
            3. Treatment of chronic conditions without acute exacerbation;
            4. Vocational training;
            5. Medical records that fail to document the required level of physician supervision and treatment planning process;
            6. Electrosleep therapy (CMS Publication 100-03, Chapter 1, Section 30.4);
            7. Electrical Aversion Therapy for treatment of alcoholism (CMS Publication 100-03, Chapter 1, Section 130.4);
            8. Hemodialysis for the treatment of schizophrenia (CMS Publication 100-03, Chapter 1, Section 130.8);
            9. Transcendental Meditation (CMS Publication 100-03, Chapter 1, Section 30.5);
            10. Multiple Electroconvulsive Therapy (MECT) (CMS Publication 100-03, Chapter 1, Section 160.25).</ol type=a>
            11. It is not reasonable and medically necessary to provide inpatient psychiatric hospital services to the following types of patients, and coverage is excluded under Title XVIII of the Social Security Act, Section 1862(a)(1)(A): 
              1. Patients who require primarily social, custodial, recreational, or respite care;
              2. Patients whose clinical acuity requires less than twenty-four (24) hours of supervised care per day;
              3. Patients who have met the criteria for discharge from inpatient hospitalization;
              4. Patients whose symptoms are the result of a medical condition that requires a medical/surgical setting for appropriate treatment;
              5. Patients whose primary problem is a physical health problem without a concurrent major psychiatric episode;
              6. 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. (CMS Publication 100-03, Chapter 1, Section 130.1 and 130.6, respectively);
              7. Patients for whom admission to a psychiatric hospital is being used as an alternative to incarceration.</ol type=a>
              8. Listing an _ICD-10-CM_ code in the Mental Disorders category does not assure coverage of the specific service. Upon medical review, coverage criteria specified in this Local Coverage Determination shall be applied to the entire medical record to determine medical necessity.  
  

              9. 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.
**Other Comments:**  
  
For claims submitted to the Part A MAC: this coverage determination also
applies within states outside the primary geographic jurisdiction with
facilities that have nominated CGS Administrators, LLC to process their
claims.  
  
Bill type codes only apply to providers who bill these services to the Part A
MAC. Bill type codes do not apply to physicians, other professionals and
suppliers who bill these services to the carrier or Part B MAC.  
  
Limitation of liability and refund requirements apply when denials are likely,
whether based on medical necessity or other coverage reasons. The
provider/supplier must notify the beneficiary in writing, prior to rendering
the service, if the provider/supplier is aware that the test, item or
procedure may not be covered by Medicare. The limitation of liability and
refund requirements do not apply when the test, item or procedure is
statutorily excluded, has no Medicare benefit category or is rendered for
screening purposes.  
  
For outpatient settings other than CORFs, references to "physicians"
throughout this policy include non-physicians, such as nurse practitioners,
clinical nurse specialists and physician assistants. Such non-physician
practitioners, with certain exceptions, may certify, order and establish the
plan of care for Psychiatric Inpatient Services as authorized by State law.
(See Sections 1861(s)(2) and 1862(a)(14) of Title XVIII of the Social Security
Act; 42 CFR, Sections 410.74, 410.75, 410.76 and 419.22; 58 FR 18543, April 7,
2000.)  
  
  
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: _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._  
7\. _Items and Services Furnished by Physicians Under Part B:_ Professional
services billed to Medicare Part B (e.g., services of psychiatrists and
psychologists) may be medically necessary, even though psychiatric inpatient
hospitalization services are not.  
  
Notices to beneficiaries' requirements apply. See number 2 above.  
  
If the facility portion of inpatient psychiatric services is denied as not
medically necessary this does not mean that the physician service is also not
medically necessary. The physician service to the patient may be medically
necessary even though the level of service rendered in an inpatient
psychiatric facility is not medically necessary.  
  
Physician visits to a patient must involve a face-to-face encounter. Physician
visits that only comprise team conferences or discussion with staff can not be
billed to the carrier.