For most insurers, admission criteria are:
- Imminently dangerous to self, OR
- Imminently dangers to others, OR
- Marked decline in functioning such that the patient is unable to function outside of the hospital setting
AND
- Unable to be managed appropriately in the outpatient setting
Discharge criteria generally mirror these points. I would note that the goal is not to completely eliminate any safety risks, and patients will often remain symptomatic at discharge. This is a critical teaching point for many residents, who often have very unrealistic expectations of what will be accomplished during an inpatient admission. As long as a patient has improved sufficiently such that they are able to continue to engage in treatment after discharge - e.g., a patient who presents acutely psychotic has at least some degree of insight into the potential benefits of continuing to engage in treatment - and you are convinced that the patient is unlikely to kill themselves or others imminently after discharge, you will likely start to receive pressure from payers to discharge. In short, you need to be able to provide a justified answer to the question, "why can't this patient receive the treatment that you're offering in a less restrictive setting (e.g., PHP/IOP, general outpatient follow-up, etc.)?" Some payers are just idiotic - e.g., one payer that we are contracted with will refuse to authorize severely depressed patients with marked neurovegetative symptoms because they argue that the patient doesn't have the ability to actually kill themselves - but if you can make a case in your documentation that inpatient management is necessary and that the patient is receiving benefit, you likely won't have too much trouble.
Whether or not those criteria are appropriate and/or whether patients that do not meet those criteria could benefit from inpatient treatment is another question altogether. I would argue that 1) they are too restrictive and 2) patients can benefit from inpatient admission even if they are not imminently dangerous or profoundly functionally declined, but most payers will disagree. Whether or not that is relevant to your practice will depend on the setting that you're working in and the financial pressures your unit is under. As an example, our unit's contribution to our health system is not providing revenue, thus the fact that we lose 7 figures annually is less of a concern to the broader institution and institutional leadership. Our value is provided elsewhere (teaching, making disposition from the ED easier, a sense that a leading academic institution should provide all available services regardless of other factors, etc.). A free-standing, private psychiatric facility or a psychiatric unit as part of a larger, private healthcare system is unlikely to take the same approach.
I say this as someone who works on an academic inpatient unit.