Assessing the Regulatory Burden on Inpatient Psychiatric Facilities

Health Highlights

Editor’s Note: Inpatient psychiatric facilities operate under a heavy burden of federal regulatory requirements. In a new report commissioned by the National Association of Behavioral Health (NABH), summarized below, Manatt Health assesses the burden that certain federal laws and regulations impose on inpatient psychiatric facilities. Click here to download a free copy of the full report.


Inpatient psychiatric facilities offer critical support to Americans with severe mental health needs. Only 16% of licensed mental health facilities offer acute inpatient services, providing round-the-clock care for patients with psychiatric emergencies. These inpatient facilities help patients through times of crisis until it is safe for them to continue treatment in a community setting (or, if appropriate, to transfer to a residential facility for long-term care).

Government regulation and oversight play a critical role in ensuring that patients receive quality care in a safe setting. To that end, the federal government has defined myriad requirements for hospitals, as well as an additional set of rules specific to inpatient psychiatric facilities. Complying with all those rules comes at a cost, however. In a report for NABH, Manatt Health focuses on assessing the burden imposed by three federal regulatory domains that attach to participation in the Medicare program:

  • A set of Centers for Medicare & Medicaid Services (CMS) regulations specific to psychiatric facilities regarding medical records, patient evaluations and staffing requirements. These requirements are commonly called “B-tags” in reference to CMS’s detailed interpretive guidance, which assigns a “tag” number to each element that must be verified during an on-site compliance survey.
  • The need to address “ligature risk points,” defined as locations where a patient might attach a cord-like object for the purpose of hanging or self-strangulation. CMS has directed psychiatric facilities to address ligature risk as part of the general requirement to provide care in a safe setting.
  • The Emergency Medical Treatment and Labor Act (EMTALA), also known as the anti-dumping law, which requires hospitals to have a “qualified medical person” (QMP) screen all patients for emergency medical conditions and, if an emergency condition is identified, to stabilize the patient before he or she may be discharged or transferred.

Based on our survey of 62 inpatient psychiatric facilities, we estimate that these three regulatory areas, taken together, impose $1.7 billion in compliance costs each year nationwide. Put another way, these burdens represent 4.8% of an average facility’s annual revenue for all inpatient psychiatric services from all sources.

The B-Tag Requirements: Key Findings and Recommendations

CMS issued the conditions of participation (CoPs) in 1966 and the interpretive guidance in the 1980s. Neither the rules nor the guidance for psychiatric patient evaluations, medical records and staffing have been meaningfully updated since they were issued.

As enforced today, the B-tags produce frequent citations and impose large costs on providers, mostly through low-value documentation requirements. Among our respondents, almost 80% of freestanding psychiatric hospitals report at least one B-tag citation in their most recent three compliance surveys. Nationwide the B-tags impose an estimated $622 million in compliance costs each year.

Many in the industry believe that these requirements are no longer appropriate in today’s care environment and should be eliminated. We recommend that CMS convene a commission (with representation from inpatient psychiatric providers) to determine whether these psychiatric hospital CoPs remain relevant and whether some—or all—should be revised or discarded.

Ligature Risk: Key Findings and Recommendations

Psychiatric providers care deeply about keeping patients safe, which includes protecting them from self-harm or suicidal behaviors. As CMS has recognized, however, providers cannot feasibly create “ligature-free” environments that are completely devoid of potential ligature attachment points. Nonetheless, some surveyors demand major changes to psychiatric facilities’ infrastructure or staffing to address perceived issues that carry only minimal risk for patients.

Approximately 60% of our respondents reported a ligature-related citation in the last two years. When asked about costs over the last five years and the projected next fiscal year, respondent facilities reported, on average, more than $15,600 per psychiatric bed on physical plant and equipment costs to address ligature-related issues. To address these issues, CMS should issue guidance that:

  • Standardizes survey practices by adopting an evidence-based approach;
  • Minimizes the risk of redundant renovations (such as a future surveyor issuing citations based on an already approved feature for a prescribed period); and
  • Clarifies that inpatient facilities don’t need to design highly ligature-resistant spaces in areas that are under constant supervision, such as nursing stations.

EMTALA: Key Findings and Recommendations

Congress passed EMTALA to ensure that any patient who presents to an emergency department (ED) would be screened for emergency medical conditions and, if necessary, stabilized, irrespective of the patient’s ability to pay. In recent years, however, some regulators have begun interpreting EMTALA in a manner that imposes new requirements on psychiatric facilities.

For example, EMTALA permits each provider to determine which clinicians are designated as QMPs who may screen patients for medical conditions. Some regulators, however, are using EMTALA to raise the baseline licensure requirements for QMPs in inpatient psychiatric facilities, failing to account for the widespread shortage of clinicians with psychiatric expertise. Among those who made changes in response to the new interpretation, the average cost was more than $900 per 100 days of inpatient care. CMS and the U.S. Department of Health and Human Services Office of the Inspector General (OIG) should ensure that surveyors respect EMTALA’s clear direction that each provider’s medical staff may decide for itself which clinicians are competent to screen for emergency medical conditions, subject to applicable state licensure laws that define the clinical scope of practice.

In another example, some psychiatric facilities do not accept involuntarily committed patients and have long maintained a policy of transferring such patients to more appropriate facilities, often in accordance with standing transfer agreements established under state-run programs. Some regulators, however, are now requiring all inpatient psychiatric facilities with an ED to admit involuntarily committed patients, notwithstanding the risks to other patients and staff. EMTALA should not be used to address the shortage of facilities that treat involuntarily committed patients. Federal regulators should respect state procedures for involuntary commitment, including state arrangements for facility designation and patient transfer.



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