Inpatient Psychiatric Hospital Services - PT (02)

Kentucky Medicaid recognizes psychiatric hospital providers as Provider Type (02). In order to enroll and bill Kentucky Medicaid, a psychiatric hospital facility must be:

  • Enrolled with Medicare
  • Licensed in Kentucky. Hospitals must contact the Office of Inspector General (OIG), Division of Health Care for a survey/license
  • Enrolled as an active Medicaid provider and if applicable enrolled with the managed care organization (MCO) of any beneficiary it serves

Covered Services

Psychiatric hospital services must involve active treatment reasonably expected to improve the beneficiary's condition or prevent further regression so eventually such services no longer are necessary. Periodic medical and social evaluations should determine when a beneficiary's progress makes it possible for their needs to be met appropriately outside the institution. Federal regulations allow beneficiaries to remain in a mental hospital only while there is a certified psychiatric need or such hospitalization is expected to effect clinical recovery or significant symptomatic improvement.

Federal regulations emphasize active treatment as a requirement for inpatient services. Active treatment is defined as the implementation of a professionally developed individual plan of care with treatment objectives and therapies enabling improved functioning to the point that institutional care no longer is necessary.


The following may be used as general guidelines in determining whether a beneficiary meets the criteria for psychiatric hospital benefits:

  • functional psychoses without significant concurrent illness and for whom general hospital or outpatient care is not feasible
  • requires brief periods of protection from consequences of their behavior during acute disturbance or depression episodes (suicide, homicide, refusal to eat, etc.)
  • acute or chronic psychiatric illness requiring 24-hour care for diagnostic evaluation and psychiatric treatment
  • chronic mental illness  requiring protection and management as well as treatment during periods of disruptive behavior that require regular and frequent attendance of a physician
  • severe organic brain disease-related usual behavior, is  unresponsive to medication and cannot be managed at home or in another facility due to physical aggressive or risk of danger to themselves
  • episodes of agitation or restlessness produced by stressful situations which may require brief psychiatric hospital treatment

The following care needs do not meet the criteria for mental hospital care:

  • major medical problems and minor symptoms for which private consultation could be provided instead of mental hospital admission
  • inconsequential lapses of memory and mild disorientation as a result of chronic brain syndrome more effectively treated or managed in the home, long-term care facility, etc., and for which a psychiatric hospital offers little benefit and may even worsen the condition
  • need for only adequate living accommodations, economic aid or social support services

Psychiatric hospitals must meet the coverage provisions and requirements of 907 KAR 10:016 and 907 KAR 10:020 to provide covered services. Any services performed must fall within the scope of practice for the provider. Listing of a service in an administrative regulation is not a guarantee of payment. Providers must follow Kentucky Medicaid regulations. All services must be medically necessary.

Limitations of Service

Admissions for diagnostic purposes are covered only if the diagnostic procedures cannot be performed on an outpatient basis. Beneficiaries may be permitted home visits; however, this must clearly be documented on billing statements as payment cannot be made for these days. Private accommodations will be reimbursed only if medically necessary and ordered by the attending physician. The physician's order and reasons for private accommodations must be maintained in the beneficiary's medical records. If a private room is the only room available, payment will be made until another room becomes available. If all rooms on a particular floor or unit are private rooms, payment will be made.


The Medicaid program will not reimburse for any day in which a beneficiary is not present in the psychiatric hospital. The Medicaid program will not reimburse for a court-ordered psychiatric hospital admission unless the department determines the admission meets the criteria in 907 KAR 10:016 section 3(1). The Medicaid program will not reimburse for an elective  or substance use treatment admission.


Reimbursement for psychiatric hospital services is provided by 907 KAR 10:815 and 907 KAR 10:820.

Duplication of Service

The department will not reimburse for a service provided to a beneficiary by more than one provider of any program in which the same service is covered during the same time period.

Prior Authorizations

CareWise provides prior authorizations for any For Fee for Service (FFS) beneficiaries. Each MCO provides prior authorization for its beneficiaries.

Claims Submission

Kentucky Medicaid currently contracts with DXC to process FFS claims. Each MCO processes its own claims.


Kentucky Medicaid uses the National Correct Coding Initiative (NCCI) edits as well as the McKesson Claim Check System to verify codes that are mutually exclusive or incidental. Kentucky Medicaid also uses Current Procedural Terminology (CPT) codes and Healthcare Common Procedure Coding system (HCPCS) codes. Kentucky Medicaid requires the use of ICD-10 codes on all claims submitted for reimbursement. Kentucky Medicaid requires the use of CMS 1500 billing forms. Providers will need to bill Kentucky Medicaid using the correct CPT codes.

Claim Appeals

Appeal requests made on denied FFS claims must be submitted to DXC. The request must include the reason for the request along with a hard copy claim. Please refer to the MCO if appealing an MCO claim.

Timely Filing

Claims must be received within 12 months of the date of service or six months from the Medicare pay date whichever is longer, or within 12 months of the last Kentucky Medicaid denial. Please refer to the MCO if appealing an MCO claim.

Provider Contact Information

If you can't find the information you need or have additional questions, please direct your inquiries to:
Billing Questions - DXC - (800) 807-1232
General Provider Questions - (855) 824-5615
Office of Transportation Delivery at (888) 941-7433
Prior Authorization - CareWise - (800) 292-2392
Provider Enrollment or Revalidation - (877) 838-5085 assistance -DXC - (800) 205-4696
Pharmacy Questions - (800) 432-7005
Pharmacy Clinical Support Questions - (800) 477-3071
Pharmacy Prior Authorization - (800) 477-3071
Physician Administered Drug (PAD) List - Pharmacy Branch - (502) 564-6890

Provider MCO Information

Anthem - (800) 205-5870
Aetna Better Health of KY - (855) 300-5528
Humana - (855) 852-7005
Passport Health Plan- (800) 578-0775
WellCare of KY - (877) 389-9457

Report Fraud and Abuse

(800) 372-2970


902 KAR - Cabinet for Health and Family Services - Public Health Title page

902 KAR 20:180 Psychiatric hospitals; operation and services

907 KAR Cabinet for Health and Family Services - DMS Title page

907 KAR 10:016 Coverage regarding inpatient psychiatric hospital services

907 KAR 10:020 Coverage regarding outpatient psychiatric hospital services

907 KAR 10:815 Reimbursement for Inpatient hospital services

907 KAR 10:820 Reimbursement for outpatient psychiatric hospital services

Provider Resources

MAP Form Home

PT 02 - Psychiatric Hospital Provider Summary

Provider Letters

Provider Letter A-105: COVID-19 Guidance for all Medicaid Providers

General Provider Letter #A-103 - IMD Expansion

Provider Letter regarding Ordering, Referring Prescribing Providers

Billing Information

Psychiatric Hospital Billing Instructions
Fee and Rate Schedules

Contact Information