Corporate Compliance

Note from the instructor: Review of hospital partial hospitalization outpatient mental health services

Medicare Insider, February 10, 2015

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This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.  
Note from the instructor: Review of hospital partial hospitalization outpatient mental health services
This note is the second note in a three-part series focusing on Medicare rules relating to hospital outpatient and inpatient mental health services (alternatively referred to as “psychiatric services”). Last week we discussed non-partial hospitalization outpatient psychiatric services. This week we will review Medicare rules relating to coverage, coding, billing and payment for partial hospitalization outpatient psychiatric services.
Partial hospitalization services are outpatient psychiatric services provided under a structured program that provides intensive psychiatric care through active treatment. Partial hospitalization is more intense than outpatient day treatment, resembling a highly structured, short term hospital inpatient program.
In order to be covered, all outpatient mental health services, including partial hospitalization services, must be both incident to a physician’s services and reasonable and necessary. They also must meet the following criteria:
  • Be provided under an individualized treatment plan, established by a physician; 
  • Be supervised and periodically evaluated by a physician to determine progress toward treatment goals; and
  • Be for diagnostic study or be reasonably expected to improve the patient’s condition.
Partial hospitalization services are generally provided in lieu of hospitalization. That is, beneficiaries either have been discharged from inpatient psychiatric treatment, and partial hospitalization services are ordered in lieu of continued hospitalization, or they are considered to be at reasonable risk for inpatient hospitalization if they do not receive partial hospitalization services.
In order to be eligible for partial hospitalization, however, beneficiaries must meet certain additional requirements, set out below:
  • Be under the care of a physician who certifies they need 20 hours per week of therapeutic services as evidenced by their care plan;
  • Require a comprehensive, structured multimodal treatment requiring medical supervision and coordination provided under an individualized plan of care;
  • Have a mental disorder which severely interferes with multiple areas of daily life, including social, vocational and/or educational functioning, generally of an acute nature;
  • Generally, have an acute onset or decompensation of an Axis I mental disorder as defined in DMS IV; 
  • Be able to cognitively and emotionally participate in the active treatment process and be capable of tolerating the intensity of a partial hospitalization program (PHP);
  • Not require 24 hour supervision and have an adequate support system to maintain themselves outside the PHP; and
  • Not be an imminent danger to themselves or others.
Certain specific documentation requirements must also be met, including the following:
  • An initial psychiatric evaluation and certification by a physician of the beneficiary’s diagnosis and psychiatric need for partial hospitalization and evidence the beneficiary would require inpatient psychiatric hospitalization if the PHP services were not provided;
  • A recertification by day 18, and every 30 days thereafter, by a physician treating the patient that the beneficiary would require inpatient psychiatric hospitalization in the absence of the PHP services;
  • An individualized active treatment plan prescribed and signed by a physician; and
  • Progress notes documenting the services provided.
Coding and billing
Hospitals should report condition code 41 to indicate a claim for partial hospitalization services. Since there are no specific HCPCS codes for reporting partial hospitalization, hospitals must report the individual services that comprise partial hospitalization, using a defined set of HCPCS codes, along with specified revenue codes. The applicable mental health revenue codes are in the 090X (Behavioral Health Treatment/Services) and 091X (Behavioral Health Treatment/Services – Extension of 090x) series of codes.
Most PHP services have an SI of “P,” but some PHP services are also payable as non-partial hospitalization outpatient mental health services and have status indicator “Q3”. For the complete list of partial hospitalization HCPCS codes, see the 1/1/15 update to the Integrated Outpatient Code Editor Specifications (IOCE), Appendix P, Section B “Partial Hospitalization Services.” In that section, Medicare has set out two lists of HCPCS codes to identify mental health services which qualify for coverage and payment as partial hospitalization services: 
  • “List A,” which is a list of psychotherapy codes approved for partial hospitalization; and
  • “List B,” which is a list of all codes approved for partial hospitalization.
Hospitals should report units of service based on the description of the HCPCS code being reported to ensure proper application of payment grouping and edits. If the HCPCS code does not have a defined time, hospitals should not bill for sessions of fewer than 45 minutes. 
There are two APCs for per diem payment of partial hospitalization services provided in a hospital outpatient department. 
  • APC 0175 “Level I Partial Hospitalization for Hospital-based PHP” when a hospital provides at least three partial hospitalization services from List B, at least one of which is a psychotherapy service on List A.
  • APC 0176 “Level II Partial Hospitalization for Hospital-based PHP” when a hospital provides at least four partial hospitalization services from List B, at least one of which is a psychotherapy service on List A.
For payment purposes, the APC is assigned to a List A service, and the status indicator for all other partial hospitalization services is changed to “N” for packaged. If fewer than three services from List B or no psychotherapy services from List A are provided, each line with a partial hospitalization service on the claim will be denied. (See IOCE Appendix C-a for a summary of the claims adjudication process for partial hospitalization services.)
Future focus
In a future issue of the Medicare Insider we will complete our overview of hospital mental health services by focusing on inpatient psychiatric services.

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