The inpatient mental health
per diem payment system applies to services covered that are provided
in a Medicare DRG-exempt psychiatric hospitals and a Medicare DRG-exempt
unit of a hospital. In addition, any psychiatric hospital that does
not participate in Medicare, or any hospital that has a psychiatric
unit that has not been so designated for exemption from Medicare
DRG because the hospital does not participate in Medicare, must
be designated as a psychiatric hospital or psychiatric specialty
unit for purposes of the inpatient mental health per diem payment
system upon demonstrating that it meets the same Medicare criteria.
The contractor is responsible for requesting from a hospital that
does not participate in Medicare sufficient information from that
hospital which will allow it to make a determination as to whether
the hospital meets the Medicare criteria in order to designate it
as a DRG-exempt hospital or unit. The inpatient mental health per
diem payment system does not apply to mental health services provided
in non-psychiatric hospitals or non-psychiatric units. Substance
Use Disorder Rehabilitation Facilities (SUDRFs) are not reimbursed
under the inpatient mental health per diem payment system (see
Section 3).