Medicare Inpatient Psychiatric Services Face Potentially Negative Review Policy

In what appears to be the first of its kind, AdminaStar, a fiscal intermediary for the Medicare program for Indiana, Illinois, Kentucky, and Ohio, has proposed a local medical review policy (LMRP) for inpatient psychiatric care.

The proposal, which would take effect no sooner than January 1, 2004, has several important and potentially negative implications for the review of inpatient care under the Medicare program.

The Office of Healthcare Systems and Financing’s view of this LMRP is that it represents a significant change from the requirements for hospital care from the Centers for Medicare and Medicaid Services (CMS). According to Irvin L. (Sam) Muszynski, J.D., director of the Office of Healthcare Systems and Financing, “The LMRP prescribes in detail the documentation requirements for psychiatric services in a way that goes beyond what an LMRP should do.”

He added that this new policy could be a de facto change in the nature of coverage. Moreover, the detailed review process contemplated by the proposed LMRP is onerous and expensive, takes away resources from patient care, and is reminiscent of the review process for partial hospital services.

APA has raised preliminary objections to the proposed LMRP and is working closely with the National Association of Psychiatric Hospital Systems and the American Hospital Association. Similar LMRPs are being contemplated by other Medicare fiscal intermediaries.