Medicare provides payment for outpatient psychiatric hospital services when they are medically reasonable and necessary for the purpose of diagnostic study or be reasonably expected to improve the patient's condition.
Access the below mental health related information from this page.
A CMHC is an entity that provides partial hospitalization services under Part B of the Medicare Program.
For a CMHC to be authorized to provide these services, it must:
- Meet applicable licensing or certification requirements for CMHCs in State where it is located; and
- Outpatient services including specialized outpatient services for children, the elderly, individuals who are chronically mentally ill, and residents of its mental health service area who have been discharged from inpatient treatment at a mental health facility
- Twenty-four-hour emergency care services that provide access to a clinician and appropriate disposition with follow-up documentation of emergency in patient's CMHC medical record
- Day treatment, or other partial hospitalization services, or psychosocial rehabilitation services that provide structured day programs with treatment plans that vary in intensity of services and frequency and duration of services based on patient needs
- At least 40 percent of its services to individuals who are not eligible for benefits under Title XVIII of Social Security Act
- Screening for patients who are being considered for admission to a State mental health facility to determine appropriateness of such admission by an entity that has appropriate clinical personnel and authorization under State law to perform all steps in clinical evaluation process, except for those that must be provided by a 24-hour facility. A CMHC that operates in a State that by law precludes it from providing these services may provide for such services by contract with an approved organization or entity (as determined by the Secretary of the Department of Health and Human Services) that, among other things, meets applicable licensure or certification requirements for CMHCs in State where it is located
Services not covered under a PHP
- Services to hospital inpatients
- Meals, self-administered medications
- Vocational training
View mental health services that may be and are not covered under the Medicare Program.
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Outpatient psychiatric hospital services and supplies must:
- Be medically reasonable and necessary for the purpose of diagnostic study or reasonably be expected to improve the patient's condition. For every service that is billed, the provider must indicate the specific sign, symptom, or patient complaint necessitating the service. Medically necessary services and supplies:
- are proper and needed for diagnosis or treatment of beneficiary's medical condition
- are furnished for diagnosis, direct care, and treatment of beneficiary's medical condition
- meet standards of good medical practice
- are not mainly for convenience of beneficiary, provider, or supplier
- Be furnished under an individualized written plan of care (POC) that states:
- type, amount, frequency, and duration of services to be furnished
- anticipated goals (except when only a few brief services are furnished)
- Be supervised and periodically evaluated by a physician who:
- Prescribes services
- Determines extent to which treatment goals have been reached and whether changes in direction or emphasis are needed
- Provides supervision and direction to therapists involved in patient's treatment
- Documents his/her involvement in patient's medical record
- Be for the purpose of diagnostic study or, at a minimum, designed to reduce or control patient's psychiatric symptoms so as to prevent a relapse or hospitalization and improve or maintain patient's level of functioning
- CMS Internet Only Manual (IOM), Publication 100-04, Medicare Claims Processing Manual, Chapter 4, Section 260 - Explains billing requirements for the Partial Hospitalization Program
- CMS IOM, Publication 100-02, Medicare Benefit Policy Manual, Chapter 6, Section 70 - Defines what outpatient psychiatric services are as well as specific coverage guidelines for the various services provided
- CMS Medicare Learning Network (MLN) Matters (MM) Special Edition (SE)1607
- CMS MLN SE1407 - Psychiatry and Psychotherapy Services
Last Updated Sep 04, 2019
The below are topic specific articles which have been published to "Latest Updates" and sent out in Noridian emails within the past two years. Exclusions to this include time sensitive related announcements such as: Noridian and CMS educational events, Ask-the-Contractor Teleconferences and claims processing downtime.