**Abstract:**  
  
Psychiatric partial hospitalization is a distinct and organized intensive
psychiatric outpatient treatment of less than 24 hours of daily care, designed
to provide patients with profound or disabling mental health conditions an
individualized, coordinated, intensive, comprehensive, and multidisciplinary
treatment program not provided in a regular outpatient setting. Partial
hospitalization services are furnished by a hospital or community mental
health center (CMHC) to patients with acute mental illness in order to avoid
inpatient care through this type of ambulatory care. The Medicare psychiatric
partial hospitalization benefit was established and is intended to furnish
services in lieu of inpatient psychiatric care. Partial Hospitalization
requires admission and certification of need by a psychiatrist or physician
(MD/DO) trained in the diagnosis and treatment of psychiatric illness. Partial
hospitalization programs (PHPs) differ from inpatient hospitalization in the
lack of 24-hour observation, and outpatient management in day programs in 1)
the intensity of the treatment programs and frequency of participation by the
patient and 2) the comprehensive structured program of services provided that
are specified in an individualized treatment plan, formulated by a physician
and the multidisciplinary team, with the patient's involvement.  
  
**Indications:**  
  
Patients admitted to a partial hospitalization program must be under the care
of a physician who is knowledgeable about the patient and certifies the need
for partial hospitalization. The patient or legal guardian must provide
written informed consent for partial hospitalization treatment. The patient
must require comprehensive, multimodal treatment requiring medical supervision
and coordination because of a mental disorder which severely interferes with
multiple areas of daily life, including social, vocational, and/or educational
functioning. Such dysfunction must be of an acute nature and not a chronic
circumstance.  
  
Patients eligible for Medicare coverage of a partial hospitalization program
comprise two groups: those patients who are discharged from an inpatient
hospital treatment program, and the partial hospitalization program is in lieu
of continued inpatient treatment; or those patients who, in the absence of
partial hospitalization, would require inpatient hospitalization. There must
be a reasonable expectation of improvement in the patient's disorder and level
of functioning as a result of the active treatment provided by the partial
hospitalization program. Active treatment directly addresses the presenting
problems requiring admission to the partial hospitalization program. Active
treatment consists of clinically recognized therapeutic interventions
including individual, group, and family psychotherapies, occupational,
activity, and psycho-educational groups pertinent to the patient's illness.
Medical and psychiatric diagnostic evaluation and medication management are
also integral to active treatment. The patient must have the capacity for
active participation in all phases of the multidisciplinary and multimodal
program. If a substance abuse disorder is also present, the program must be
prepared to appropriately treat the co-morbid substance abuse disorder (dual
diagnosis patients). A program comprised primarily of activity, social, or
recreational therapy does not constitute a partial hospitalization program.
Psychosocial programs which provide only a structured environment,
socialization, and/or vocational rehabilitation are not covered by Medicare.  
  
 _**Admission Criteria (Intensity of Service)**_  
In general, patients should be treated in the least intensive and restrictive
setting which meets the needs of their illness. Patients admitted to a partial
hospitalization program do not require the 24-hour-per-day level of care
provided in an inpatient setting, and must have an adequate support system to
sustain/maintain themselves outside the partial hospitalization program and
must not be a danger to themselves or others.  
  
At the same time, a partial hospitalization program level of care must be
necessary to prevent inpatient hospitalization, and there must be evidence of
failure at or inability to benefit from a less intensive outpatient program.  
  
The acute psychiatric condition being treated by a partial hospitalization
program must require active treatment, including a combination of services
such as intensive nursing and medical intervention, psychotherapy,
occupational and activity therapy. Patients must require partial
hospitalization program services at levels of intensity and frequency
comparable to patients in an inpatient setting for similar psychiatric
illnesses.  
  
_**Admission Criteria (Severity of Illness):**_  
Patients admitted to a partial hospitalization program generally must have an
acute onset or decompensation of a covered Axis I mental disorder, as defined
by the _Diagnostic and Statistical Manual of Mental Disorders_ , Fourth
Edition (DSM-IV-TRTM) published by the American Psychiatric Association (2000)
(see the "ICD-10-CM Codes That Support Medical Necessity" section) which
severely interferes with multiple areas of daily life. The degree of
impairment will be severe enough to require a multidisciplinary structured
program, but not so severe that patients are incapable of participating in and
benefiting from an active treatment program, and able to be maintained outside
the program. For patients who do not meet this degree of severity of illness,
and for whom partial hospitalization services are not necessary, professional
services billed to Medicare Part B (e.g., services of psychiatrists and
psychologists) may be medically necessary, even though partial hospitalization
services are not.  
  
Patients admitted for treatment to a partial hospitalization program will not
be in immediate/imminent danger to self, others, or property, but there may be
a recent history of self-mutilation, serious risk taking, or other self-
endangering behavior.  
  
 **_Discharge Criteria (Intensity of Service):_**  
Patients in partial hospitalization programs may be discharged by either
stepping up to an inpatient level of care, or stepping down to a less
intensive level of outpatient care. Inpatient admission would be required for
patients needing 24-hour supervision because of probability for self-harm,
harm to others, or inability to care for self outside the hospital. Stepping
down to a less intensive level of service than partial hospitalization would
be considered when patients no longer require a multidisciplinary and
multimodal program as described above. These patients would become outpatients
and individual mental health services could then be billed by appropriate
providers. Although partial hospitalization programs may have program
availability of 20 hours or more per week, and patients upon entering a
partial hospitalization program generally would require this higher level of
participation, three hours per day at four days per week would be the minimum
level of active treatment at which it would be reasonable and necessary for a
patient to participate in a partial hospitalization program _must require a
minimum of 20 hours per week of therapeutic services, as evidenced by their
plan of care.*_ Although there may be occasions of unavoidable absences to a
day of PHP participation, patient participation in the program four days per
week, with a total of 20 hours per week of program services as specified in
the plan of care, is the minimum level of active treatment at which it would
be reasonable and necessary for a patient to participate in a partial
hospitalization program. Absences from the partial hospitalization program and
their cause must be documented in the medical record.  
  
*CR 6320  
  
 **_Discharge Criteria (Severity of Illness):_**  
Patients whose clinical condition improves or stabilizes and who cannot
benefit from or do not still require the intensive, multimodal treatment
available in a partial hospitalization program should be stepped down to
outpatient care. Patients unwilling or unable to participate in a partial
hospitalization program would also be appropriate for discharge.  
  
 **_Covered Services:_**

  * Medically necessary diagnostic services related to mental illness.
  * Individual or group psychotherapy with physicians, psychologists, or other mental health professionals authorized or licensed by the state in which they practice (e.g. licensed clinical social worker, certified alcohol and drug counselor). Group therapy size should be limited to ten or fewer individuals participating.
  * Occupational therapy requiring the skills of a qualified occupational therapist. Occupational therapy, if required, must be a component of the physician's treatment plan for the individual. While occupational therapy may include prevocational and vocational assessment and training, when the services are related primarily to specific employment opportunities, work skills, or work settings, they are not covered.
  * Services of other staff (social workers, psychiatric nurses, and others) trained to work with psychiatric patients. Individual, family and group psychotherapy must be performed by individuals authorized or licensed by the state in which they practice to provide these services. With the exception of hospitals receiving payments under Graduate Medical Education (GME) program, Medicare does not pay for the professional services of individuals who are in training and have not yet obtained licensure.
  * Drugs and biologicals that cannot be self-administered and are furnished for therapeutic purposes (subject to the limitations specified in 42 CFR 410.29). For example, oral medications that can be self-administered are not covered. Note: medication must be safe and effective, and approved by the Food and Drug Administration. It cannot be experimental or administered under an investigational protocol.
  * Individualized activity therapies that are individualized to the patient's goals and not primarily recreational or diversionary. These activities must be individualized and essential for the treatment of the patient's diagnosed condition and for progress toward treatment goals. The physician's treatment plan must clearly justify the need for each particular activity therapy modality utilized, and define its role in the treatment of the patient's illness and functional deficits. Providers should not bill activity therapies as individual or group psychotherapy services.
  * Family counseling services for which the primary purpose is the treatment of the patient's condition. Such services include the need to observe the patient's interaction with the family for diagnostic purposes, or to assess the capability of and assist the family members in aiding in the management of the patient. Counseling the family to aid in the management of the patient may include attempts to modify the behavior of the family members. This may be covered if such services are related to the treatment of the patient's condition (CMS Publication 100-03, _Medicare National Coverage Determinations Manual_ , Chapter 1, Section 70.1).
  * Patient training and education, to the extent the training and educational activities are closely and clearly related to the individual's care and treatment of their diagnosed psychiatric condition (CMS Publication 100-03, _Medicare National Coverage Determinations Manual_ , Chapter 1, Section 170.1).

**Limitations:**  
  
The following services do not represent reasonable and necessary partial
hospitalization services and coverage is excluded under Section 1862 (a)(1)(A)
of the Social Security Act:

  * day care programs, which provide primarily social, recreational, or diversional activities, custodial or respite care;
  * programs attempting to maintain psychiatric wellness, e.g. day care programs for the chronically mentally ill;
  * treatment of chronic conditions without acute exacerbation;
  * services to a skilled nursing facility resident that should be expected to be provided by the nursing facility staff;
  * vocational training.

The following services are excluded from the scope of partial hospitalization
services defined in Section 1861(ff) of the Social Security Act:

  * services to hospital inpatients;
  * meals, self-administered medications, transportation;
  * professional physician services, physician assistant services, and clinical psychologist services.

It is not reasonable and necessary to provide partial hospitalization services
to the following types of patients and coverage is excluded under Section
1862(a)(1)(A) of the Social Security Act:

  * patients who cannot or refuse to participate (due to their behavioral, cognitive, or emotional status, e.g. individuals with persistent substance abuse, moderate to severe mental retardation or organic brain syndrome) with active treatment of their mental disorder, or who cannot tolerate the intensity of a partial hospitalization program;
  * patients who require 24-hour supervision because of the severity of their mental disorder or their safety or security risk;
  * patients who require primarily social, custodial, recreational, or respite care;
  * patients with multiple absences or who are persistently non-compliant;
  * patients who do not participate in active treatment for a minimum of 3 hours per day, 4 days per week;
  * patients whose plan of care does not support the need for active treatment for a minimum of four days per week, with a total of 20 hours per week of program services;
  * patients who have met the criteria for discharge from the partial hospitalization program, or who require inpatient hospitalization.

**General Comments:**  
  
 **_Sites of Service:_**  
Partial hospitalization services may be covered under Medicare when they are
provided in a hospital outpatient department or a Medicare-certified Community
Mental Health Center (CMHC). Partial hospitalization services rendered within
a hospital outpatient department are considered "incident to" a physician's
(MD/DO) services and require physician supervision. The physician supervision
requirement is presumed to be met when services are performed on hospital
premises (i.e., certified as part of the hospital). If a hospital outpatient
department operates a partial hospitalization program offsite, the services
must be rendered under the direct supervision of a physician (MD/DO). Partial
hospitalization services provided in a CMHC require general supervision by a
physician (MD/DO). This means that a physician must be at least available by
telephone, but is not required to be on the premises of the CMHC at all times.
CMHCs must meet applicable certification or licensure requirements of the
state in which they operate, and additionally be certified by Medicare. A CMHC
is a Medicare provider of services only with respect to the furnishing of
partial hospitalization services under Sec. 1866(e)(2) of the Act. CMS's
definition of a CMHC is based on Sec. 1916(c)(4) of the Public Health Service
(PHS) Act. The PHS definition of a CMHC is cross- referenced in Section
1861(ff) of the Act.  
  
 **_Professional Services Related to Psychiatric Partial Hospitalization:_  
  
Note: The following billing requirements also apply to CMHC providers.** (See
CMS Publication 100-04, _Medicare Claims Processing Manual_ , Chapter 4,
Section 260.1 [B].)  
 _ _The professional services listed below when provided in all hospital
outpatient departments are separately covered and paid as the professional
services of physicians and other practitioners. These professional services
are unbundled and these practitioners (other than physician assistants [PA])
bill the Medicare Part B carrier directly for the professional services
furnished to hospital outpatient partial hospitalization patients. The
hospital can also serve as a billing agent for these professionals by billing
the Part B carrier on their behalf under their billing number for their
professional services. The professional services of a PA can be billed to the
carrier only by the PA's employer. The following direct professional services
are unbundled and not paid as partial hospitalization services:__

  * Physician services that meet the criteria of _42 CFR 415.102,_ for payment on a fee schedule basis;
  * Physician assistant (PA) services as defined in _ 1861(s)(2)(K)(i)_ of the Act;
  * Nurse practitioner and clinical nurse specialist services, as defined in 1861(s)(2)(K)(ii) of the Act; and
  * Clinical psychologist services as defined in _ 1861(ii)_ of the Act.

_The services of other practitioners (including clinical social workers and
occupational therapists), are bundled when furnished to hospital patients,
including partial hospitalization patients. The hospital must bill_ [their FI]
_for such nonphysician practitioner services as partial hospitalization
services. [P]ayment for the services_ [is made] _to the hospital.  
  
PA services can only be billed by the actual employer of the PA. The employer
of a PA may be such entities or individuals such as a physician, medical
group, professional corporation, hospital, SNF, or nursing facility. For
example, if a physician is the employer of the PA and the PA renders services
in the hospital, the physician and not the hospital is responsible for billing
the carrier on Form CMS 1500 for the services of the PA_ (CMS Publication
100-04, _Medicare Claims Processing Manual_ , Chapter 4, Section 260.1[B]).
(See Appendix for a list of the professional services of physicians, physician
assistants, nurse practitioners, psychiatric clinical nurse specialists and
clinical psychologists to partial hospitalization patients that are billed to
the carrier.)  
  
See CMS Publication 100-04, _Medicare Claims Processing Manual_ , Chapter 4,
Section 260.1.1[C] for billing requirements for CMHCs.  
  
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