Georgia Medicare IPF PPS Guide (2026)

When a Georgia Medicare beneficiary in her late 70s with longstanding bipolar disorder enters an acute manic episode with severe agitation and risk to herself, when a Vietnam veteran in his early 70s with treatment-resistant major depression and recent suicidal ideation requires inpatient stabilization, or when an older adult with worsening alcohol use disorder needs medically managed withdrawal in a hospital setting, the question of what kind of facility provides this care, what Medicare pays, and what the beneficiary will face in cost-sharing is fundamentally different from the questions families face for surgical or medical hospitalizations.

Medicare covers inpatient psychiatric care, but it does so under a framework different from acute hospital care. The Georgia Medicare IPF PPS framework, the Medicare Inpatient Psychiatric Facility Prospective Payment System (IPF PPS), governs how Medicare pays psychiatric hospitals and psychiatric units of acute care hospitals. The framework is unique among Medicare hospital PPS systems in that it uses per-diem payment rather than DRG-based per-discharge payment. The framework is also unique in that freestanding psychiatric hospitals are subject to a 190-day lifetime limit on Medicare coverage, while IPF units of acute care hospitals are not.

The IPF PPS framework was authorized by the Balanced Budget Refinement Act of 1999 (BBRA), codified in the Social Security Act, and implemented through federal regulations at 42 CFR Part 412 Subpart N. IPF PPS replaced the cost-based reimbursement system that had previously paid IPFs. The framework pays each Medicare patient day a federal per-diem amount adjusted by patient-level factors (age, DRG category, comorbidities, ECT delivery, variable per-diem decay over the stay) and facility-level factors (wage index, rural status, teaching status, cost of living, emergency department presence).

For Georgia, the IPF landscape includes Medicare-certified IPFs, including freestanding psychiatric hospitals such as Peachford Hospital, Ridgeview Institute, Anchor Hospital, Skyland Trail, and Lakeview Behavioral Health, state-operated Georgia Regional Hospitals (Atlanta, Savannah, East Central Regional, Central State), and IPF units of acute care hospitals at Emory, WellStar, Northside, Augusta University, Memorial Health, and other major Georgia health systems. These facilities serve Georgia Medicare beneficiaries who require inpatient psychiatric stabilization for severe depression, suicidal ideation, mania, psychosis, severe substance use disorders requiring medically managed withdrawal, and acute psychiatric crises requiring 24-hour hospital-level care.

This guide is published by Brevy at brevy.com as part of our mission to be America's most trusted and comprehensive eldercare resource. It covers the statutory authority for IPF PPS, the federal regulations at 42 CFR Part 412 Subpart N, the per-diem payment methodology, the patient-level and facility-level adjustments, the outlier provisions, the 190-day lifetime limit on freestanding psychiatric hospital coverage, the active treatment requirement, the IPF Quality Reporting Program, the Conditions of Participation for psychiatric hospitals, the standard Part A cost-sharing applicable to IPF stays, the distinction between freestanding IPFs and IPF units of acute hospitals, the Georgia Mental Health Code (OCGA Title 37) and 1013/2013 forms for involuntary evaluation, the coordination with the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD), the major Georgia IPFs, and the practical questions Georgia families face when an IPF admission is being considered for an older adult Medicare beneficiary.

By Brevy Care Team · Last verified May 13, 2026

For Georgia Medicare beneficiaries and their families, the IPF setting is the central inpatient resource for acute psychiatric crises in older adults. Untreated or undertreated psychiatric crises in older adults can lead to harm, including suicide (which has high rates in older adults, particularly older men), accidental death, hospitalization for medical complications of untreated psychiatric illness, and loss of function leading to long-term care placement. Access to appropriate IPF care can change the trajectory of an older adult's mental health and functional independence.

Consider a Georgia Medicare beneficiary in his early 70s with longstanding major depression who has been losing weight, withdrawing from family, and expressing thoughts that he would be better off dead. His wife brings him to an emergency department after he stops eating entirely. The ED psychiatrist evaluates him, confirms severe major depression with suicidal ideation, and recommends inpatient psychiatric admission. He agrees voluntarily and is admitted to the hospital's IPF unit.

Over a 10-day IPF stay, he receives medication initiation with close monitoring, daily psychiatrist evaluation, individual and group therapy, nutritional rehabilitation, and discharge planning to ensure he has follow-up psychiatric care, family support, and a safety plan. He is discharged with a clear plan, follow-up appointment within 7 days, and continued support. The trajectory of the next year of his life is different because of the IPF intervention.

The Medicare IPF PPS framework pays for this care under per-diem payment that reflects his age, his comorbidities (he has type 2 diabetes and hypertension), and the daily resources used. The 10-day stay is paid at the IPF unit's facility-adjusted federal per-diem rate, with variable per-diem providing higher payment for the first few days and lower for the last days. Because he is at an IPF unit of an acute care hospital (not a freestanding psychiatric hospital), the 190-day lifetime limit does not apply to this admission. His cost-sharing is the Part A deductible (which his Medigap plan covers), with no coinsurance for days 1-60.

For Georgia, the IPF landscape reflects a mix of private freestanding facilities, state-operated psychiatric hospitals, and hospital-based units. The freestanding facilities tend to focus on private-pay, Medicare, and commercially insured patients. The state Georgia Regional Hospitals serve as safety net facilities, particularly for civil commitment and indigent populations. Hospital-based IPF units provide integrated psychiatric care alongside acute medical services, which is particularly important for older adults with both psychiatric and medical complexity.

The Georgia Mental Health Code governs voluntary and involuntary psychiatric admission. The 1013 form (certificate for involuntary evaluation) and 2013 form (certificate for involuntary inpatient treatment) are central documents in Georgia civil commitment. The 1013 form authorizes a 72-hour involuntary evaluation. If continued involuntary treatment is needed beyond 72 hours, court proceedings and the 2013 form may be involved. The Georgia Crisis and Access Line (GCAL) at 1-800-715-4225 is the 24/7 entry point for Georgia behavioral health crisis services, including mobile crisis evaluation, walk-in crisis centers, and IPF admission coordination.

Brevy publishes this guide and related guides at brevy.com to help Georgia families understand IPF care, what kinds of patients are appropriate, what the IPF stay looks like, what Medicare covers, and how the 190-day lifetime limit and active treatment requirement affect coverage. The right choice depends on the patient's clinical condition, the available facilities, the family situation, and the goals of care.

The pre-PPS cost-based framework

Before IPF PPS, IPFs were paid under a cost-based reimbursement framework. Each IPF filed an annual Medicare cost report identifying its actual Medicare-related costs, and Medicare reimbursed based on those costs subject to upper limits and various adjustments. The framework supported high-cost cases and encouraged investment in psychiatric capacity, but it produced weak incentives for efficiency and substantial payment variability across similar facilities.

The Balanced Budget Refinement Act directed CMS to develop and implement a prospective payment system for IPFs. After several years of development, including data analysis to define case-mix adjustments and facility adjustments, CMS implemented IPF PPS, replacing the prior cost-based framework. The unique per-diem methodology was selected because of the difficulty of predicting psychiatric resource use from admission characteristics alone, the variable course of psychiatric illness, and the substantial role of length of stay in resource consumption. Refer to the current IPF PPS Final Rule for the program's effective date and subsequent rulemaking history.

The transition to IPF PPS was significant for IPF operations. Some IPFs that had relied on high cost reimbursement to support complex cases found PPS more restrictive. Other IPFs that had operated efficiently saw modest changes. Over time, IPF operations adapted to the PPS framework, and the case-mix methodology was refined through multiple rulemaking cycles.

The Georgia Medicare IPF PPS per-diem payment methodology

IPF PPS is the only major Medicare hospital prospective payment system that uses per-diem payment rather than per-discharge payment. The choice reflects the nature of psychiatric care, where length of stay varies substantially based on patient response to treatment, where resource use does not follow predictable DRG patterns, and where the early days of admission are typically the most resource-intensive.

Each Medicare patient day in an IPF produces a payment calculated as:

Federal per-diem base rate × Patient-level adjustments × Facility-level adjustments

The federal per-diem base rate is set annually in the IPF PPS Final Rule. Patient-level adjustments are case-specific (age, DRG, comorbidities, ECT, variable per-diem). Facility-level adjustments are facility-specific (wage index, rural, teaching, COLA, ED presence).

The per-diem methodology means that longer stays produce more total payment, and shorter stays produce less. This is fundamentally different from acute hospital DRG payment, where each discharge produces a single fixed payment regardless of length of stay. The per-diem approach aligns Medicare payment with the underlying cost structure of psychiatric care.

Patient-level adjustments

Age adjustment

The federal per-diem base rate is adjusted upward for older patients. The age adjustment recognizes that older psychiatric patients typically require more resources because of medical comorbidities, slower response to treatment, and more complex discharge planning. The age adjustment factors increase across age categories, with the highest adjustments for the oldest patients.

DRG adjustment (psychiatric MS-DRGs)

Each IPF admission is assigned to one of the psychiatric MS-DRGs based on the principal psychiatric diagnosis. The DRG categories include:

• Acute and chronic alcohol or drug use disorders
• Schizophrenia and other psychotic disorders
• Major depression and other mood disorders
• Bipolar disorder
• Anxiety disorders
• Personality disorders
• Childhood and developmental disorders
• Other psychiatric diagnoses

The DRG adjustment factor varies across DRGs, reflecting expected resource use differences. Some DRGs (such as those involving severe psychotic disorders or complex mood disorders) have higher adjustment factors. For the current MS-DRG list and adjustment factors, consult the most recent IPF PPS Final Rule.

Comorbidity adjustment

The IPF PPS recognizes that medical comorbidities increase resource use. Multiple comorbidity categories can apply to an individual case. The categories include:

• Major medical comorbidities (cardiovascular, pulmonary, renal, hepatic, etc.)
• Specific psychiatric comorbidities
• Drug and alcohol use disorders (as comorbidity to primary diagnosis)
• Other medical complications

Multiple comorbidities stack to produce additional payment. The adjustment recognizes that older adults with both psychiatric and medical complexity require more intensive care. Refer to the current IPF PPS Final Rule for the enumerated comorbidity categories and adjustment factors.

ECT adjustment

Electroconvulsive therapy (ECT) is a treatment for severe depression and other psychiatric conditions that involves controlled electrical stimulation under anesthesia. ECT delivery requires additional resources (anesthesia, recovery monitoring, specific staff). The IPF PPS provides an ECT adjustment for days on which ECT is delivered. Documentation of the ECT delivery is required.

Variable per-diem adjustment

The variable per-diem adjustment decreases the per-diem amount over the course of the stay. The first several days of admission have higher per-diem payment, with the per-diem decreasing in steps over time. The variable per-diem reflects the higher resource intensity of the early days of admission (initial evaluation, medication initiation, behavioral stabilization, family meetings) compared to later days (continued treatment, discharge planning, transitions).

The variable per-diem provides financial incentives for efficient care while still supporting longer stays for patients who require them.

Facility-level adjustments

Wage index

The wage index adjusts the labor-related portion of the federal per-diem rate for geographic differences in hospital labor costs. IPFs use the same wage index as acute hospitals in their geographic area. The wage index is updated annually.

Rural adjustment

IPFs located in rural areas receive an increased federal per-diem rate. The rural adjustment recognizes that rural IPFs face higher per-unit costs due to lower volume, limited workforce availability, and other rural healthcare cost factors. The specific rural adjustment percentage is set in the current IPF PPS Final Rule.

Teaching adjustment

IPFs with approved graduate medical education programs receive a teaching adjustment based on the resident-to-bed ratio. The adjustment recognizes the higher costs associated with teaching activities.

Cost of Living Adjustment (COLA)

IPFs in Alaska and Hawaii receive a COLA adjustment recognizing higher costs in those states.

Emergency Department adjustment

IPFs with emergency departments receive a first-day adjustment for each admission that comes through the emergency department. The adjustment reflects the higher acuity of patients admitted through the ED and the additional resources used in ED-based admission processing. The current ED adjustment percentage is set in the IPF PPS Final Rule.

Outlier provisions

Short-stay outlier

The IPF PPS recognizes that very short stays have proportionally higher resource use per day due to admission and discharge processing. Short-stay outlier adjustments increase the per-diem for the shortest stays.

High-cost outlier

Cases with extraordinarily high cost can qualify for high-cost outlier payment, providing additional payment beyond the standard per-diem amount. The fixed loss threshold and marginal cost factor are defined in the annual final rule.

The 190-day lifetime limit in Georgia Medicare IPF PPS coverage

Medicare law imposes a 190-day lifetime limit on inpatient psychiatric services in freestanding psychiatric hospitals. The 190-day limit is one of the most consequential elements of Medicare psychiatric coverage and is often misunderstood by beneficiaries and families. For current CMS guidance on the limit and how it is tracked, refer to the current Medicare Benefit Policy Manual.

What the limit covers

The 190-day limit applies to inpatient days in freestanding psychiatric hospitals. These are hospitals licensed and certified specifically as psychiatric hospitals, with separate Medicare provider numbers from acute care hospitals. Examples in Georgia include Peachford Hospital, Ridgeview Institute, Anchor Hospital, Lakeview Behavioral Health, and the state-operated Georgia Regional Hospitals.

What the limit does NOT cover

The 190-day limit does not apply to inpatient psychiatric care in IPF units of acute care hospitals. These are distinct part units (DPUs) within general hospitals. The acute hospital retains its primary Medicare provider number, and the IPF unit operates under the IPF PPS framework. Examples in Georgia include the psychiatric units at Emory University Hospital, WellStar Atlanta Medical Center, Northside Hospital, Augusta University Medical Center, Memorial Health Savannah, and other hospital-based units.

Lifetime accumulation

The 190-day limit is a lifetime count, not a per-spell-of-illness count. Once a beneficiary accumulates 190 days in freestanding psychiatric hospitals over her lifetime, Medicare provides no further coverage for freestanding psychiatric hospital admissions. The count is maintained centrally by Medicare based on claims history.

Coverage exhaustion implications

For beneficiaries with chronic and recurrent severe mental illness who experience multiple psychiatric hospitalizations over their lives, the 190-day limit can be reached. Once exhausted, options include:

• Admission to IPF units of acute hospitals (not subject to the 190-day limit)
• Medicaid coverage if dually eligible (Medicaid does not impose the 190-day limit)
• Private payment
• Alternative levels of care (intensive outpatient, partial hospitalization, residential)

Coverage tracking

Beneficiaries should be aware of their 190-day count, particularly if they have a history of multiple psychiatric hospitalizations. The freestanding IPF can confirm the available days at admission. Medicare resources can verify the count.

Reform discussions

Mental health parity advocates have long argued for elimination of the 190-day lifetime limit. Critics note that Medicare imposes no similar lifetime limit on other inpatient hospital care and that the 190-day limit reflects historical mental health discrimination. Various legislative proposals have aimed to eliminate the limit, but no enactment has occurred to date. Beneficiaries and families should plan for the 190-day limit as it currently exists.

The active treatment requirement

Under Medicare law and implementing CMS guidance, Medicare covers inpatient psychiatric care that constitutes active treatment. Active treatment is the dividing line between covered psychiatric care and non-covered custodial care. Refer to the current CMS Medicare Benefit Policy Manual for the specific statutory and regulatory framework.

Active treatment standards

Active treatment requires:

• Individualized plan of care: Specific to the patient's diagnosis, condition, and goals
• Multidisciplinary treatment team: Psychiatrist, nursing, social work, therapy, etc.
• Documented progress: Regular documentation of treatment delivery and patient response
• Reasonable expectation of improvement: Treatment that has a realistic potential for benefit
• Treatment that requires inpatient hospital setting: Not deliverable in lower-acuity setting

Plan of care requirements

The plan of care must be developed at or shortly after admission. It must address:

• Patient's primary psychiatric diagnosis and treatment needs
• Specific treatment goals
• Treatment modalities (medications, therapy, etc.)
• Discharge criteria
• Discharge planning

The plan of care is updated regularly as the patient's condition evolves.

Documentation requirements

Daily documentation must demonstrate:

• Psychiatrist progress notes
• Nursing notes
• Therapy notes (individual, group, family, recreation)
• Treatment team conferences
• Medication management
• Response to treatment
• Discharge planning activities

Coverage denials

Inadequate active treatment documentation can result in coverage denials. CMS contractors and the QIO (Acentra Health in Georgia) review records and may deny coverage for days where active treatment standards are not met. The bright line between active treatment and custodial care is sometimes contested, particularly for patients with chronic illness and slow improvement.

Custodial care exclusion

Medicare does not cover custodial care. Custodial care is care primarily focused on assistance with activities of daily living, supervision for safety, or maintaining current function without active treatment toward improvement. Long-term placement of psychiatric patients without active treatment goals would be custodial and not covered.

Multidisciplinary treatment team

IPF care is delivered by a multidisciplinary treatment team. The required disciplines include:

• Psychiatrist (M.D. or D.O. specializing in psychiatry, often with geriatric psychiatry expertise for older adult care)
• Psychiatric nurses (RNs with psychiatric-mental health training)
• Social workers (LCSW or equivalent, for discharge planning, family work, community resource coordination)
• Recreation or activity therapists (for therapeutic activities, structured engagement)
• Other disciplines as applicable (psychology, occupational therapy, dietitians, pharmacists, etc.)

Team conferences occur regularly (often daily or several times per week), with documentation in the medical record. Team members participate based on the patient's needs.

The psychiatrist has daily contact with the patient and oversees the plan of care. Nursing provides 24-hour care. Social work coordinates discharge planning, family communication, and community resource arrangements. Therapy disciplines provide structured therapeutic interventions.

The team approach is one of the defining characteristics of IPF care. It enables comprehensive assessment, coordinated intervention, and effective discharge planning.

IPF Quality Reporting Program (IPF QRP)

The IPF Quality Reporting Program (IPF QRP) requires IPFs to report specific quality measures. IPFs that fail to report face a reduction in the annual market basket update; consult the current IPF PPS Final Rule for the exact reduction.

HBIPS measures

The Hospital-Based Inpatient Psychiatric Services (HBIPS) measures focus on:

• HBIPS-2: Hours of physical restraint use
• HBIPS-3: Hours of seclusion use
• HBIPS-5: Discharged on multiple antipsychotic medications

These measures address inpatient psychiatric care quality and safety.

Other IPF QRP measures

• 30-day follow-up after hospitalization for mental illness (with mental health practitioner)
• Substance use treatment initiation and engagement
• Tobacco use treatment provided
• Influenza immunization
• Patient experience of care (limited)
• Transition record documentation

Public reporting

IPF QRP measures are publicly reported on Medicare Care Compare. Families can compare IPFs based on the publicly reported quality data.

42 CFR Part 482 Conditions of Participation

IPFs participate in Medicare as hospitals and are subject to the hospital Conditions of Participation at 42 CFR Part 482. In addition to the general hospital CoPs, IPFs must meet the special requirements at 42 CFR Part 482 Subpart E for psychiatric hospitals.

Subpart E special requirements

• Medical records: specific content requirements including identification data, provisional or admitting diagnosis, reasons for admission, social service records, consultations, complete history and physical, physician progress notes, nursing care reports, and multidisciplinary treatment plans
• Special medical staff: director of inpatient psychiatric services, qualified medical staff
• Special nursing services: director of psychiatric nursing services, adequate psychiatric staffing
• Special staff requirements: continuing education, training in psychiatric care

The special requirements ensure that IPFs maintain appropriate clinical infrastructure for psychiatric care.

Standard Part A cost-sharing

IPF care is paid under standard Medicare Part A inpatient cost-sharing. The IPF admission counts as an acute hospital admission for cost-sharing purposes.

• Days 1-60: Patient pays the Part A deductible ($1,736 in 2026), no daily coinsurance after the deductible
• Days 61-90: Daily coinsurance ($434/day in 2026)
• Lifetime reserve days (up to 60 lifetime): Daily coinsurance ($868/day in 2026)
• After 90 days plus lifetime reserve in a single spell of illness: Patient responsible for full cost

For freestanding psychiatric hospitals, the 190-day lifetime limit applies in addition to standard cost-sharing. Once 190 days are exhausted, Medicare provides no further coverage in freestanding IPFs.

The spell of illness framework applies. An IPF admission within the same spell of illness as a prior acute hospital admission does not require a separate deductible. The 60-day break between spells applies to IPF admissions just as to acute hospital admissions.

Most Medigap plans cover the Part A deductible and coinsurance, eliminating beneficiary out-of-pocket cost for the IPF stay (except for excluded services and beyond the 190-day limit in freestanding IPFs). Medicare Advantage plans handle cost-sharing differently and may have plan-specific copays for IPF admissions.

No three-day qualifying stay requirement

Unlike SNF, IPF admission does not require a three-day qualifying hospital stay. Patients can be admitted to an IPF:

• From the emergency department directly
• From outpatient settings if clinical criteria met
• From the community for voluntary admission
• Under civil commitment (involuntary) per state law

For Georgia, voluntary admission is the patient's choice. Involuntary admission proceeds under the Georgia Mental Health Code. The 1013 form (certificate for involuntary evaluation) authorizes a 72-hour involuntary evaluation. If continued involuntary treatment is needed, the 2013 form and court proceedings may be involved.

The lack of a three-day stay requirement allows direct IPF admission when appropriate, ensuring timely access to psychiatric care.

Freestanding IPF vs IPF unit of acute hospital

There are two structural categories of IPFs in Georgia and nationally:

Freestanding psychiatric hospital

A freestanding psychiatric hospital operates independently and is licensed as a psychiatric hospital. It has its own Medicare provider number, its own administration, its own physical facility, and its own clinical and administrative leadership. Examples in Georgia include Peachford Hospital (UHS), Ridgeview Institute, Anchor Hospital, Skyland Trail, Lakeview Behavioral Health (UHS), and the state-operated Georgia Regional Hospitals.

Freestanding IPFs are subject to the 190-day lifetime limit under Medicare law.

IPF unit of acute care hospital (distinct part unit)

An IPF unit operates within an acute care hospital but functions as a distinct IPF for Medicare purposes. The acute hospital retains its primary Medicare provider number, and the IPF unit operates under IPF PPS. Examples in Georgia include the psychiatric units at Emory University Hospital, WellStar Atlanta Medical Center, Northside Hospital, Augusta University Medical Center, Memorial Health Savannah, and other hospital-based units.

IPF units of acute care hospitals are NOT subject to the 190-day lifetime limit. This is a significant coverage advantage for patients with chronic and recurrent mental illness who may approach or exceed the 190-day count in freestanding IPFs.

Same payment framework

Both categories of IPF are paid under the same IPF PPS framework. The per-diem methodology, the patient-level and facility-level adjustments, the outlier provisions, and the IPF QRP all apply to both freestanding and DPU IPFs. The structural difference primarily affects the 190-day lifetime limit applicability.

Worked example 1: GA IPF acute psychiatric admission scenario

Consider a 74-year-old Georgia Medicare beneficiary with major depression, recently widowed, who has been losing weight and expressing thoughts that he would be "better off gone." His daughter brings him to an Emory University Hospital emergency department after he refuses to eat for three days. The ED psychiatrist evaluates him, confirms severe major depression with suicidal ideation, and recommends inpatient admission. He agrees voluntarily.

IPF admission

• Admitted to the Emory Behavioral Health IPF unit (DPU of acute hospital)
• 190-day lifetime limit does NOT apply (IPF unit, not freestanding)
• Cost-sharing follows standard Part A framework

IPF course

• Day 1-3: Initial evaluation, suicide precautions, medication initiation (escitalopram), nutritional rehabilitation begun, family meetings
• Day 4-7: Continued medication adjustment, individual and group therapy, structured activities, family work
• Day 8-10: Improvement in mood and engagement, discharge planning, follow-up psychiatric appointment scheduled
• Day 11: Discharged home with family support, follow-up psychiatric appointment in 5 days, safety plan in place

Payment calculation

• 11 days × federal per-diem base rate × patient-level adjustments (age, DRG for major depression, comorbidity for hypertension and diabetes, no ECT, variable per-diem with higher payment for early days decreasing thereafter) × facility-level adjustments (Atlanta wage index, no rural adjustment, Emory teaching adjustment, no COLA, ED adjustment for first day)
• ED adjustment provides first-day adjustment
• Total IPF payment reflects daily resource use over the stay

Beneficiary cost-sharing

• Part A deductible: covered by Medigap
• Days 1-60 (all 11 IPF days): no coinsurance after deductible
• Day count in spell of illness: 11 days of IPF (within days 1-60, no coinsurance applies)

Outcome

The patient recovers from the acute depressive episode, continues outpatient psychiatric care, reconnects with family, and returns to his prior level of function over the next several months. The IPF admission was the turning point for his recovery.

Worked example 2: IPF per-diem payment calculation

Consider a 70-year-old Georgia Medicare beneficiary admitted to Peachford Hospital (freestanding IPF) for 8 days with treatment for bipolar disorder with manic episode. She has comorbid hypertension and type 2 diabetes. The illustrative figures below show the structure of the calculation; the actual federal per-diem base rate and adjustment factors are set annually in the IPF PPS Final Rule.

Federal per-diem base rate

• Set annually in the IPF PPS Final Rule (the figure below is illustrative only)
• Illustrative example: $900 per diem

Patient-level adjustments (illustrative)

• Age adjustment: applied for age category
• DRG adjustment: applied for psychotic disorders DRG
• Comorbidity adjustment: applied for hypertension and diabetes
• ECT adjustment: not applicable (no ECT delivered)
• Variable per-diem adjustment: highest on Day 1, decreasing in steps across the stay

Facility-level adjustments

• Wage index (Atlanta area): applied
• Rural adjustment: not applicable (urban facility)
• Teaching adjustment: not applicable
• COLA: not applicable
• ED adjustment: not applicable (Peachford does not have ED)

Per-day calculation structure

Each day's payment equals the federal per-diem base rate multiplied by the applicable patient-level and facility-level adjustments, with the variable per-diem factor changing day by day across the stay.

Total payment

Sum of all 8 days, with each day calculated with that day's variable per-diem adjustment, all other adjustments held constant.

Beneficiary cost-sharing

• Part A deductible: $1,736 (covered by Medigap)
• All 8 days within days 1-60: no coinsurance

190-day count impact

• Peachford is freestanding IPF
• 8 days count against the 190-day lifetime limit
• Beneficiary's 190-day count is reduced by 8

Lesson

The per-diem methodology with multiple adjustments produces payment that aligns with the actual cost of care for the specific patient and facility. Adjustments accumulate multiplicatively.

Worked example 3: 190-day lifetime limit scenario

Consider a Georgia Medicare beneficiary with longstanding bipolar disorder who has been hospitalized multiple times over her lifetime. Her cumulative inpatient psychiatric days in freestanding IPFs over the years approach the 190-day lifetime cap, leaving just a handful of days remaining.

She now experiences another psychiatric crisis requiring inpatient admission.

Coverage analysis

• 190-day count: near the limit
• Next freestanding IPF admission would exhaust the 190-day limit after only a few days
• Medicare coverage in freestanding IPFs is essentially exhausted

Options

1. Continued freestanding IPF admission: Medicare covers the remaining days, then no further Medicare coverage in freestanding IPF
2. Admit to IPF unit of acute hospital (not subject to 190-day limit): Medicare covers full stay under standard Part A framework
3. Medicaid coverage (if dually eligible): Medicaid does not impose 190-day limit
4. Private payment for continued freestanding IPF stay beyond the cap

Recommendation

For this beneficiary, admission to an IPF unit of an acute hospital is preferable to avoid 190-day limit exhaustion. The hospital-based unit provides equivalent IPF PPS-paid care without the lifetime cap. Her family and case manager work with the receiving facility to coordinate this admission.

Lesson

The 190-day lifetime limit can constrain coverage for beneficiaries with chronic recurrent severe mental illness. Awareness of the count and strategic site-of-care choices are important. The distinction between freestanding IPFs and IPF units of acute hospitals matters significantly for chronic patients.

Worked example 4: Active treatment documentation

Consider a Georgia Medicare beneficiary admitted to a Lakeview Behavioral Health (freestanding IPF) for major depression on day 1 of a planned 7-day admission.

Active treatment plan

• Plan of care developed on Day 1: Major depression, suicidal ideation; goals: stabilize mood, ensure safety, initiate medication, develop discharge plan
• Multidisciplinary team: Psychiatrist, RN, LCSW, recreation therapist
• Treatment modalities: SSRI initiation, individual therapy, group therapy, structured activities
• Discharge criteria: Mood improvement, resolved suicidal ideation, plan for outpatient follow-up, family engagement

Daily documentation

• Day 1: Psychiatrist H&P, plan of care, treatment goals, medication started, family meeting documented
• Day 2: Psychiatrist progress note, nursing notes, group therapy attended, individual therapy session, recreation therapy
• Day 3: Continued documentation of progress, medication adjustment, treatment plan review
• Day 4-6: Continued treatment team activity, daily psychiatrist notes, therapy participation
• Day 7: Discharge planning finalized, follow-up appointment scheduled, family meeting, discharge summary

Audit consideration

Each day's documentation must demonstrate active treatment. The QIO may review records, particularly for stays approaching or exceeding average length of stay. Documentation gaps can result in coverage denials.

Lesson

Active treatment documentation is essential for Medicare coverage. The bright line between active treatment and custodial care must be demonstrated in daily documentation. Coverage denials are sometimes appealed when documentation supports active treatment that was reviewed as inadequate.

Worked example 5: Freestanding IPF vs IPF unit coverage

Consider two Georgia Medicare beneficiaries with similar clinical presentations admitted to different IPFs.

Patient A: Admitted to Peachford Hospital (freestanding IPF)

• Major depression with suicidal ideation, 12-day admission
• Medicare covers: per-diem payment per IPF PPS
• 12 days count against 190-day lifetime limit
• Beneficiary cost-sharing: Part A deductible (Medigap covers), no coinsurance (days 1-12 within first 60)

Patient B: Admitted to Emory University Hospital IPF unit (DPU)

• Major depression with suicidal ideation, 12-day admission
• Medicare covers: per-diem payment per IPF PPS (same methodology)
• 12 days do NOT count against 190-day lifetime limit (DPU not subject to limit)
• Beneficiary cost-sharing: Part A deductible (Medigap covers), no coinsurance (days 1-12 within first 60)

Comparison

• Payment to facility: Same IPF PPS methodology
• Beneficiary cost-sharing: Same
• 190-day count impact: Different (freestanding counts, DPU does not)

Strategic implication

For beneficiaries with chronic mental illness and concerns about future psychiatric hospitalization, the DPU choice preserves 190-day lifetime coverage. For beneficiaries with no concerns about future hospitalization, either choice may be appropriate based on clinical factors and facility availability.

Lesson

The freestanding vs DPU distinction matters most for the 190-day lifetime limit and for beneficiaries with chronic recurrent mental illness. Clinical factors, facility-specific quality, geographic access, and family preferences also drive the choice.

Worked example 6: Civil commitment 1013 form pathway

Consider a 73-year-old Georgia man with severe dementia who has become increasingly agitated and aggressive at home. His daughter calls 988 (Suicide and Crisis Lifeline). A crisis evaluator dispatches mobile crisis. The crisis team determines he is at risk of harm to himself and others due to behavioral disturbance from dementia with psychotic features. He refuses voluntary evaluation.

Georgia 1013 process

• 1013 form: Certificate completed by physician, psychologist, clinical social worker, or other qualified mental health professional certifying that the person appears to be mentally ill and requires involuntary evaluation
• 72-hour evaluation period: Authorizes transportation to a designated facility for evaluation
• Designated facility: Receives the patient and conducts evaluation

Hospitalization decision

• Within 72 hours, the facility evaluates the patient
• If continued involuntary treatment is needed, a 2013 form is initiated, with court proceedings
• If voluntary admission is appropriate (patient agrees after stabilization), conversion to voluntary status

Medicare coverage

• Inpatient IPF coverage applies regardless of voluntary or involuntary status, as long as Medicare admission criteria are met
• Active treatment requirement applies
• Same IPF PPS payment methodology

IPF admission

• Patient admitted to Georgia Regional Hospital Atlanta or other appropriate facility
• 1013 status converts to voluntary or formal civil commitment as appropriate
• Treatment team manages dementia-related behavioral symptoms

Discharge planning

• Discharge planning addresses living situation, family resources, behavioral plan, medication management
• May discharge to home with family support and home care
• May discharge to memory care or skilled nursing for long-term placement if home is not safe

Lesson

The Georgia 1013 process provides the legal framework for involuntary psychiatric evaluation when voluntary admission is not feasible due to the patient's condition. The process applies to dementia with severe behavioral symptoms as well as primary psychiatric illness. Medicare coverage applies under IPF PPS regardless of voluntary or involuntary admission status.

14 best practices for Georgia IPF care

1. Coordinate with Georgia Crisis and Access Line (GCAL): 1-800-715-4225 for crisis triage and IPF admission coordination, available 24/7.

2. Verify 190-day lifetime count for freestanding IPF admissions: Particularly for patients with prior psychiatric hospitalizations. Strategic choice between freestanding and DPU IPF when 190-day exhaustion is a concern.

3. Document active treatment thoroughly: Daily psychiatrist notes, multidisciplinary team conferences, treatment goals and progress, discharge planning activities.

4. Develop and update individualized plan of care: Specific to the patient's diagnosis, condition, and goals. Updated as the patient's condition evolves.

5. Engage family in treatment and discharge planning: Family meetings, education about diagnosis and treatment, post-discharge support planning.

6. Coordinate discharge planning from admission: Begin planning Day 1, identify likely discharge setting, ensure follow-up appointments scheduled.

7. Ensure 30-day follow-up after discharge: Quality measure and clinical priority. Reduces readmission and supports recovery.

8. Provide substance use treatment when indicated: Many psychiatric patients have co-occurring substance use disorders. Initiation and engagement during IPF stay supports recovery.

9. Address tobacco use: Tobacco use treatment is an IPF QRP measure. Most patients with mental illness use tobacco at higher rates than the general population.

10. Minimize use of physical restraints and seclusion: HBIPS measures track restraint and seclusion hours. Best practices use therapeutic interventions, de-escalation, and environmental design to reduce restraint use.

11. Coordinate with primary care for medical complexity: Older adults with psychiatric illness often have medical comorbidities. Coordination ensures continued medical management.

12. Participate fully in IPF QRP: Quality reporting is required, and quality outcomes are publicly visible. Strong participation supports compliance and public reputation.

13. Coordinate with Acentra Health QIO: For utilization review, beneficiary complaints, and quality of care concerns.

14. Provide geriatric psychiatry expertise for older adult patients: Older adults have specific medication considerations, cognitive considerations, and care needs that benefit from geriatric psychiatry expertise.

14 common issues and how to address them

1. 190-day lifetime limit exhaustion in freestanding IPFs: Once exhausted, no further Medicare coverage in freestanding IPFs. Address by tracking count, choosing DPU IPF when appropriate, considering Medicaid coverage for dual-eligible.

2. Active treatment documentation challenges: Coverage denials for inadequate documentation. Address through robust daily documentation, multidisciplinary participation, plan of care updates.

3. Slow improvement in chronic mental illness: Coverage challenges for patients with slow or limited improvement. Address through documentation of incremental progress, prevention of deterioration, ongoing active treatment.

4. Coordination with civil commitment proceedings: 1013 and 2013 form processes. Address through clinical-legal coordination, attorney involvement when needed, family communication.

5. 30-day readmissions: Quality measure and clinical concern. Address through robust discharge planning, follow-up coordination, family engagement.

6. Restraint and seclusion use: HBIPS measures and patient safety concern. Address through de-escalation training, environmental design, multidisciplinary team strategies.

7. Substance use co-occurring with primary psychiatric: Affects treatment planning and discharge. Address through integrated treatment, withdrawal management, post-discharge SUD resources.

8. Dementia with behavioral symptoms: Older adult patients in IPF for dementia-related behavioral disturbance. Address through geriatric psychiatry expertise, environmental modification, behavioral interventions, careful medication.

9. Family resistance to involuntary commitment: Families may be reluctant to pursue 1013. Address through GCAL coordination, education, support.

10. Medication management complexity in older adults: Polypharmacy, drug interactions, side effects. Address through careful medication review, pharmacist consultation, slow titration.

11. Discharge planning to inadequate community resources: Limited community mental health capacity. Address through warm handoffs, intensive outpatient programs, ACT services where available, family engagement.

12. Coordination with primary care medical conditions: Older adults have multiple medical conditions. Address through hospitalist consultation, primary care communication, medication reconciliation.

13. Insurance coverage transitions during stay: Medicare Advantage prior authorization, plan changes. Address through case management, insurance verification, appeals when needed.

14. OIG audits of psychiatric admissions: Audits focus on active treatment and medical necessity. Address through audit-ready documentation, internal compliance reviews.

A few more common questions:

Who admits patients to IPFs? IPF admissions can come from emergency departments, outpatient settings, direct community admission for voluntary patients, and civil commitment processes for involuntary patients. Unlike SNF, IPF admission does not require a three-day qualifying hospital stay.

What is a freestanding psychiatric hospital vs. an IPF unit of an acute care hospital? A freestanding psychiatric hospital is a hospital licensed and Medicare-certified specifically for psychiatric care, with its own Medicare provider number. An IPF unit (distinct part unit, DPU) is a psychiatric unit within an acute care hospital; the acute hospital retains its primary Medicare provider number, and the IPF unit operates under IPF PPS payment methodology.

What kinds of patients does an IPF serve? IPFs serve patients with acute psychiatric crises including severe depression with suicidal ideation, mania, psychotic disorders, severe substance use disorders requiring medically managed withdrawal, dementia with severe behavioral symptoms, and other conditions requiring inpatient hospital-level psychiatric care.

Will Medigap cover IPF cost-sharing? Yes, most Medigap plans cover the Part A deductible and coinsurance. However, Medigap does not extend coverage beyond Medicare's 190-day lifetime limit in freestanding IPFs.

How long is a typical IPF stay? IPF stays typically range from 7 to 14 days for acute admissions, with some stays longer for complex cases. The variable per-diem methodology recognizes higher resource use in the early days of admission.

What are the patient-level adjustments? Patient-level adjustments include age (older patients receive higher per-diem), DRG (psychiatric MS-DRGs), comorbidity (multiple categories), ECT delivery, and variable per-diem (decreasing over the stay).

What are the facility-level adjustments? Facility-level adjustments include wage index, rural adjustment, teaching adjustment for IPFs with residency programs, COLA for Alaska and Hawaii, and a first-day adjustment for IPFs with emergency departments.

What is electroconvulsive therapy (ECT)? ECT is a treatment for severe depression and other psychiatric conditions involving controlled electrical stimulation under anesthesia. IPFs that deliver ECT receive an additional per-diem adjustment for ECT days. ECT can be highly effective for treatment-resistant severe depression in older adults.

What is the Georgia 1013 form? The 1013 form is the certificate under the Georgia Mental Health Code authorizing involuntary psychiatric evaluation for up to 72 hours. It is completed by a physician, psychologist, clinical social worker, or other qualified mental health professional certifying that the person appears to be mentally ill and requires involuntary evaluation.

What is the Georgia 2013 form? The 2013 form is the certificate under the Georgia Mental Health Code for continued involuntary inpatient treatment beyond the 1013's 72-hour evaluation period. It involves court proceedings and procedural protections.

What is the Georgia Crisis and Access Line (GCAL)? GCAL at 1-800-715-4225 is the 24/7 entry point for Georgia behavioral health crisis services. GCAL connects callers to mobile crisis evaluation, walk-in crisis centers, IPF admission coordination, and other behavioral health resources.

Can a Medicare Advantage plan cover IPF care? Yes, Medicare Advantage plans must cover IPF services that traditional Medicare covers. The plan may have its own copays, prior authorization requirements, and network restrictions. Families should check plan-specific terms.

What is the role of the QIO for IPF care? The Quality Improvement Organization (Acentra Health for Georgia) reviews care quality, beneficiary complaints, utilization review, and discharge appeals. The QIO is the appeal route for beneficiaries who disagree with IPF discharge timing.

How does the variable per-diem work? The variable per-diem decreases over the course of the stay. Day 1 has the highest adjustment, with the adjustment decreasing in steps over time. By later days, the adjustment is below 1.0. The variable per-diem reflects higher resource use in the early days of admission.

Who can help my family with IPF coverage questions? GeorgiaCares SHIP provides free Medicare counseling at 1-866-552-4464. Medicare Rights Center at 1-800-333-4114 provides national assistance. NAMI Georgia at 770-408-0625 supports families affected by mental illness. The IPF social worker and case manager address case-specific questions.