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CMS Bulletin May Help PRTF and Inpatient
December 3, 2012

The Centers of Medicare and Medicaid Services (CMS) has released a “CMSC Informational Bulletin” announcing its Departmental Appeals Board decisions which “clarified that other covered services can be furnished as part of the inpatient psychiatric facility benefit even when payment was made to an individual practitioner or supplier other than the inpatient psychiatric facility itself, when such services are furnished to a child residing in such a facility, authorized under the child’s plan of care, and provided under an arrangement with the facility.” CMS has historically prohibited states from claiming expenditures under the inpatient psychiatric facility benefit unless the expenditures were made to qualified providers of such services. This had the effect of denying coverage for other medically necessary Medicaid items and services, such as prescription drugs or practitioner services that were not included by the state as part of the rate paid to the facility for care. These items and services would be available under other benefit categories for individuals such as the benefit for Early and Periodic Screening, Diagnostic and Treatment (EPSDT), and states had separate payment methodologies for such items and services.

Following the release of this bulletin, PCPA asked the Office of Mental Health and Substance Abuse Services (OMHSAS) to inquire of CMS whether this decision also applies to Psychiatric Residential Treatment Facilities (PRTF) which are viewed by CMS as non-hospital psychiatric inpatient services. The response received by OMHSAS was that “it definitely does apply to PRTFs. This bulletin provides some flexibility that many states have been asking for in relation to PRTFs and payment for things like medical services and psychotropic medications that were not included in the per diem.”

The implications of this change are not yet clear, but psychiatric hospital and PRTF providers should begin to examine what health care, medications, and other services are provided to consumers, but not covered in the per diem. PCPA will continue to track if and how OMHSAS and the HealthChoices contractors apply this new level of flexibility.

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