Psychiatric Partial Hospitalization Programs (PHP) — Coverage Criteria
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Policy governing medical necessity, coverage criteria, and billing for Psychiatric Partial Hospitalization Programs for Blue Cross Blue Shield of North Carolina members, affecting providers who deliver PHP services.
New policy developed to provide coverage for Psychiatric Partial Hospitalization Programs when medical criteria are met.
Clarified timing for physician or physician extender evaluation: within 7 treatment days of admission, or within 3 treatment days for specific circumstances (Withdrawal Management; MAT; Co-Occurring Mental Health Disorders; Medical Co- morbidities).
Added description that a partial hospitalization is a day or evening (non-residential) alternative to a hospital or free-standing setting with inpatient-level intensity.
Statement added: Partial hospitalization programs are not covered for telehealth or virtual services.
Billing/Coding section updated for clarity and alignment with reimbursement policy with no change to policy statement.
When Treatment is Covered / Not Covered
Initial Admission Criteria
Treatment for Psychiatric Partial Hospitalization Programs may be considered medically necessary when members meet ALL the criteria listed below.
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Continued Stay Criteria
Must meet ALL of the following to continue PHP:
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General coverage statement
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Partial hospitalization programs are explicitly excluded when delivered via telehealth or virtual platforms. The policy states: Partial hospitalization programs are not covered for telehealth or virtual services.
A later revision reiterates and clarifies the exclusion: the policy language added on 3/12/25 specifies that Partial hospitalization programs are not covered for telehealth or virtual services, and this statement appears in the When Not Covered section.
Services for Psychiatric Partial Hospitalization Programs are considered not medically necessary when the member does not meet ALL of the criteria listed in the "When Treatment is Covered" section. When the required admission or continued-stay criteria are not fully satisfied, coverage is not supported.
The policy makes clear in both the implementation notes and the When Not Covered language that services provided as telehealth/virtual partial hospitalization will not be covered and may be denied. In other words, a PHP delivered remotely does not meet the covered service definition and is excluded from coverage.
Billing and Service Codes
| H0035 | Partial hospitalization services — mental health |
Provider Responsibilities and Administrative Requirements
Prior authorization required (H0035)
Coverage for PHP services may be subject to prior authorization by Blue Cross Blue Shield of North Carolina or its designee. Applicable service code: H0035.
- Applicable service code: H0035
- Coverage may require prior authorization by BCBSNC or its designee
Medical necessity required for coverage
Coverage is provided only when the medical necessity criteria in this policy are met. This policy was implemented effective 7/1/2024 and requires compliance with the documented medical necessity criteria and guidelines.
- Policy effective date: 7/1/2024
- Coverage contingent on meeting the policy’s medical necessity criteria
No step-therapy prerequisite
Failure of treatment at a less intensive level of care is not a prerequisite for admission; the policy explicitly states that no step-therapy requirement is imposed prior to PHP admission.
- Failure at a lower level is not required for benefit coverage
Medical record requests and letters of support
BCBSNC may request medical records to determine medical necessity. Letters of support or explanation may be useful but are not sufficient unless they include all specific information needed for the medical necessity determination.
- BCBSNC may request medical records for determination of medical necessity
- Letters of support are insufficient unless they include all required information
Timing of physician/physician-extender evaluation
A physician or physician extender must evaluate the client within 7 treatment days of admission; evaluation must occur within 3 treatment days of admission for Withdrawal Management, Medication Assisted Treatment (MAT), Co-Occurring Mental Health Disorders, or Medical Co-morbidities.
- Physician/physician extender evaluation within 7 treatment days of admission
- Within 3 treatment days for Withdrawal Management, MAT, co-occurring mental health disorders, or medical co-morbidities
Denial risk when admission criteria are not met
Services are considered not medically necessary and may be denied when the member does not meet ALL criteria listed in the "When Treatment is Covered" section of this policy.
- Noncoverage/denial risk if not all specified admission criteria are met
Telehealth/virtual PHP explicitly not covered
Partial hospitalization programs delivered as telehealth or virtual services are not covered and may be denied if provided via telehealth/virtual partial hospitalization.
- Partial hospitalization programs are not covered for telehealth or virtual services
- Services delivered as telehealth/virtual PHP may be denied
Level of Care — Partial Hospitalization Program (PHP)
Services and Treatment Components
General PHP services (multidisciplinary behavioral health)
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Partial Hospitalization — treatment modality description
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Units and Per‑diem Rules
Key Definitions
Clinical Background and Rationale
Psychiatric Partial Hospitalization Programs (PHP) are structured, non-residential outpatient services provided under licensed supervision and physician direction. They are intended to deliver inpatient-level intensity treatment during day or evening hours while the member returns to their home each day, providing multidisciplinary assessment, daily licensed practitioner evaluation, individualized treatment planning, medication management, safety planning, and coordination with community supports to stabilize the member and transition to a lower level of care.
Policy Changes and Review Timeline
New policy developed and notification given for effective date 2024-07-01; BCBSNC will provide coverage for Psychiatric Partial Hospitalization Programs when medical criteria are met; Medical Director review completed 03/2024.
Specialty Matched Consultant Advisory Panel review; clarified physician/physician extender evaluation timing to within 7 treatment days of admission or within 3 treatment days in specified circumstances (Withdrawal Management; MAT; Co-occurring mental health disorders; medical co-morbidities); Medical Director review 06/2024.
Minor edits throughout policy including updated description defining partial hospitalization as a day or evening non-residential treatment (hospital or free-standing) and explicit insertion of telehealth exclusion into the 'When Not Covered' section stating partial hospitalization programs are not covered for telehealth or virtual services; Medical Director review 02/2025.
References added and Billing/Coding section updated for clarity and alignment with reimbursement policy with no change to the clinical policy statement; Specialty Matched Consultant Advisory Panel review 06/2025 and Medical Director review 06/2025.
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