What counts as a partial hospitalization program
Starting a partial hospitalization program (PHP) begins with the federal rule text, because Medicare's rule gives the program its definition, its hours threshold and its patient profile.
Every rule quoted in this guide is a Medicare coverage rule. None of them is a state licensing standard, and commercial payers can set their own terms.
The federal definition
Medicare defines partial hospitalization services as "a distinct and organized intensive ambulatory treatment program that offers less than 24-hour daily care other than in an individual's home or in an inpatient or residential setting."[1]
In plain terms, a PHP treats patients for part of the day and does not house them.
The 20-hour threshold
Medicare describes partial hospitalization as intended for patients who "Require a minimum of 20 hours per week of therapeutic services as evidenced in their plan of care."[2]
The intensive outpatient rule uses the same wording with a 9-hour minimum, so the line between a PHP and an IOP is the number of treatment hours each week.[3]
Who the program is for
The rule also says these patients "Do not require 24-hour care" and "Have a mental health or substance use disorder diagnosis."[2]
Those are conditions for Medicare coverage, not admission criteria. Your clinical leadership writes the program's own admission criteria.
Services a PHP provides
Medicare's rule lists the services a covered partial hospitalization program can include:[2]
- Individual and group therapy with physicians, psychologists or other mental health professionals, including substance use disorder professionals, to the extent state law allows
- Occupational therapy
- Services of social workers and trained psychiatric nurses
- Drugs and biologicals furnished for therapeutic purposes
- Activity therapies
- Family counseling
- Patient training and education
- Diagnostic services
Medicare's list is not the only one
Your state's rules and each commercial payer can add service requirements of their own. Read both before you design the weekly schedule.
The state decides how a PHP is licensed
A PHP needs whatever license or certification your state requires for that level of care, and licensing requirements vary by state and by level of care.
Some states license a PHP under an outpatient category and others name it separately. Your state's treatment program regulator is the first call.
Pacific Viking builds the licensing roadmap with you. It does not give legal advice, and your healthcare counsel confirms what your state requires.
Physician certification and the plan of care
Medicare requires partial hospitalization services to be furnished "in accordance with a physician certification and plan of care as specified under § 424.24(e) of this chapter."[2]
Plan the physician's role before you hire, because Medicare coverage for every Medicare patient depends on that certification and plan of care.
Where a PHP can be based for Medicare
Medicare names community mental health centers (CMHCs) as one setting for partial hospitalization. The rule says Medicare Part B "covers partial hospitalization services furnished by or under arrangements made by a CMHC if they are provided by a CMHC as defined in § 410.2 that has in effect a provider agreement."[4]
A CMHC is a specific federal designation, defined in 42 CFR 410.2, with requirements of its own. Check them before you plan a PHP around one.[1]
Staffing, schedule and space
Three planning questions shape a PHP before it opens. Who will staff a schedule built around Medicare's 20-hour weekly threshold for PHP patients, how will the day be scheduled, and does the space fit both group and individual sessions?[2]
Pacific Viking's launch work covers operational infrastructure, staffing models and leadership hiring. This guide gives no staffing ratio, salary or space figure, because those come from your state's rules and your payer contracts.
Payer enrollment and utilization review
Payer enrollment means credentialing the program with each insurer and negotiating a contract before you bill.
Utilization review is the payer's check that each patient still meets its criteria for the level of care, and it shapes how a PHP documents each day of treatment.
Pacific Viking consults on credentialing, payer contracting and utilization review. It is not a billing company and does not submit claims.
When to bring in a consultant
A PHP depends on three pieces lining up: the state license, a physician role that meets Medicare's certification and plan-of-care rule, and payer contracts that decide how each treatment day is reviewed. Bring in a consultant when you need all three planned together rather than one after another.
Pacific Viking's PHP consulting covers licensing, operations, staffing and census stability for programs nationwide. Your healthcare counsel advises on the law, and the state agency decides on the license.
This guide is general information, not legal, billing or financial advice. Confirm current requirements with the agency and your counsel.
Sources
- [1]42 CFR 410.2, Medicare definitions · Electronic Code of Federal Regulations (eCFR) · ecfr.gov/current/title-42/section-410.2
Last checked Nov 12, 2026 - [2]42 CFR 410.43, Medicare partial hospitalization services · Electronic Code of Federal Regulations (eCFR) · ecfr.gov/current/title-42/section-410.43
Last checked Nov 12, 2026 - [3]42 CFR 410.44, Medicare intensive outpatient services · Electronic Code of Federal Regulations (eCFR) · ecfr.gov/current/title-42/section-410.44
Last checked Nov 12, 2026 - [4]42 CFR 410.110, partial hospitalization services furnished by CMHCs · Electronic Code of Federal Regulations (eCFR) · ecfr.gov/current/title-42/section-410.110
Last checked Nov 12, 2026
