MedicaidCoverageMedium impact
Managed Care Entity Bulletin 130: Clarification on Payment for Psychiatric Inpatient Hospital Stays and Use of Administratively Necessary Days
MassHealth·MA · Psychiatry·Claims & Billing
Effective date
Jul 1, 2025
We identified it
Jun 18, 2026
Summary
MassHealth clarifies that psychiatric inpatient hospital stays must continue to be paid as medically necessary even when patients are awaiting discharge to another inpatient facility. MCEs can only move patients to Administratively Necessary Days (AND) status after a clinical case review confirms the patient is ready for discharge to a lower level of care, not another inpatient facility.
Action Required
Immediately: Billing team must ensure psychiatric inpatient stays are billed as medically necessary when patients await discharge to another inpatient facility (not AND status). Update authorization processes to require clinical case review before any AND status designation. Train staff that AND status only applies when patient is ready for lower level of care (community-based), not transfer to another inpatient facility.