Inpatient Psychiatric Facility Coverage and Documentation

on Tuesday, 05 June 2018. All News Items | MAC Reviews | Documentation | Coding | Billing

It Takes a Village

We often associate the term “it takes a village” with the raising of children. It is true that parents, grandparents, relatives, teachers, coaches, church members, healthcare providers, and/or others often play key roles in bringing up a physically and emotionally healthy, well-adjusted young person. But what brought the “it takes a village” phrase to my mind today was listening to a replay of Palmetto GBA’s webcast on Inpatient Psychiatric Facility (IPF) coverage and documentation requirements.

Palmetto likely offered this educational session in preparation for and in response to their Targeted Probe and Educate (TPE) medical review of DRG 885, Psychoses. This is a target review area for both Palmetto’s Jurisdictions -  J and M. First Coast, the Medicare Administrative Contractor (MAC) for Jurisdiction N, also has a planned TPE review for this DRG. The Palmetto webcast reminded providers that other Medicare review entities such as the CERT contractor, Recovery Auditors, and the Office of Inspector General (OIG) could review inpatient psych or any other Medicare services.

According to the webcast, the “villagers” involved and their concerns and responsibilities for IPF services are listed below. Many tasks will involve the input of multiple staff and are a shared responsibility – more evidence that “it takes a village.”


  • Patient must be under the care of a physician
  • Write admission and other orders for patient’s care
  • Perform a psychiatric evaluation of the patient at admission to include
    • Medical history and mental status
    • Onset of illness and admission circumstances
    • Patient attitudes and behaviors
    • An estimate of intellectual functioning, memory functioning & orientation; and
    • A descriptive inventory of patient’s assets
  • Certify/recertify the need (medical necessity) for inpatient care, which includes
    • Patient psychiatric condition severe enough to warrant inpatient care
    • Need for active treatment
    • Intensive, comprehensive, multimodal treatments exceeding the level and intensity of those that may be rendered in an outpatient setting
    • Generally, an expectation of improvement of the patient’s condition or for diagnostic purpose
  • Establish a treatment plan that includes
    • Substantiated diagnosis
    • Short-term & long-range goals
    • Specific treatment modalities utilized
    • Each treatment team member’s responsibilities
    • Adequate documentation to justify diagnosis & treatment/rehabilitation activities carried out
  • Document H&P, evaluations, examinations, treatment plan, progress notes, and discharge summary

Clinicians (Nurses, Social Workers)

  • Perform and document assessments and interviews
  • Provide and document treatments including description of service, content and purpose, patient’s response and correlation to treatment plan goals

Utilization Review, Social Services, Discharge Planning

  • Appropriate utilization of patient benefit days and lifetime reserve days in appropriate setting


  • Submit correct type of bill (TOB) with appropriate revenue and occurrence codes
  • Special considerations for
    • Admission source “D” for patients transferred from acute care hospital to their psych distinct part unit (prevents overpayment due to ER adjustment)
    • One day payment window
    • Interrupted stays and occurrence span code 74
    • Services provided by other facilities during IPF stay


  • Assignment of correct primary and secondary diagnosis codes to the highest degree of specificity
  • Discharge status code

These are just some of the coverage and documentation requirements to support Medicare inpatient psychiatric services. I recommend providers who offer inpatient psychiatric services listen to this webcast (located on Palmetto’s Past Events webpage) whether you are in Palmetto’s jurisdictions or not. The information applies universally to all Medicare inpatient psych services. Palmetto also shared some of their findings from TPE reviews so far as well as some of the CERT findings. Providers need to pay special attention to make sure their records include:

  • Physician’s orders for admission and other services. Be sure all orders include a legible signature, a date, and the author’s credentials. If signatures are illegible, send an attestation log with the documentation upon review.
  • Valid and timely certifications and recertifications.
  • An initial psychiatric evaluation at the time of admission or no later than 60 hours after admission
  • Documentation that services and treatments are related to improving the patient’s condition
  • A valid, individualized treatment plan that supports psychotherapy with type, amount, frequency, duration, diagnosis & anticipated goals
  • Documentation of active treatments during billing period
  • Complete and sufficient documentation

You may want to hold a town hall meeting for all the villagers to communicate, coordinate and understand their individual and shared responsibilities. Sometime it takes a village meeting to guide a village.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it. .

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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