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.
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-TR™) 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.
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.
- 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).
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.
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.