Psychiatric Hospital

Key facts

Federal standards

42 CFR Part 482, with special conditions at 482.60 to 482.62

Medicare payment

Inpatient Psychiatric Facility PPS, a per diem system, since 2005

Medicare limit

190 lifetime days in freestanding psychiatric hospitals

CCN range

Last four digits 4000 to 4499

Medicaid restriction

IMD exclusion for facilities with more than 16 beds

What is a psychiatric hospital?

Psychiatric hospitals treat patients whose mental health or substance use conditions require round-the-clock care, such as acute psychosis, severe depression with suicide risk or a manic episode. Stays are generally short and focused on stabilization, followed by discharge to outpatient, partial hospitalization or residential care.

Medicare requires psychiatric hospitals to meet the general hospital Conditions of Participation plus special conditions on medical records and on psychiatric medical and nursing leadership. Many acute care hospitals also run distinct-part psychiatric units, which Medicare pays under the same system as freestanding psychiatric hospitals.

Ownership spans state-run hospitals, which often serve patients under civil or forensic commitment, private for-profit and nonprofit hospitals, and Veterans Affairs facilities.

How payment and coverage rules work

Several federal rules shape who psychiatric hospitals serve and how they are paid:

• Medicare pays inpatient psychiatric facilities a per diem rate adjusted for patient age, diagnosis, comorbidities, day of the stay and local wages.
• Medicare beneficiaries have a 190-day lifetime limit on care in freestanding psychiatric hospitals. The limit does not apply to psychiatric units of general hospitals.
• Medicaid generally cannot pay for care of adults aged 21 to 64 in an institution for mental diseases (IMD), a facility of more than 16 beds primarily treating mental illness. States can obtain exceptions through Section 1115 demonstration waivers and certain managed care and substance use disorder options.
• The Inpatient Psychiatric Facility Quality Reporting Program reduces the annual Medicare update for facilities that do not submit required quality data.

Why psychiatric hospital data matters

Psychiatric bed supply is a common bottleneck, and emergency departments board patients for hours or days when no inpatient bed is available.

• Pharma teams marketing antipsychotics, long-acting injectables and treatments for depression target inpatient units, where therapy is often started or changed.
• Payer network teams must meet behavioral health network adequacy standards, which depend on accurate lists of psychiatric beds by location.
• The IMD exclusion and the 190-day limit help explain why payer mix at freestanding psychiatric hospitals differs from general hospitals.
• Counting capacity requires separating freestanding hospitals from psychiatric units, which carry their own CCN derived from the parent hospital's number.