In 1999 the Balanced Budget Refinement Act mandated the development of a per diem prospective payment for all psychiatric inpatients. To assist Medicare in developing a per diem patient-based payment system, this study surveyed a representative sample of psychiatric inpatient units in 40 facilities for one week in 2001 through 2003 to determine how units are staffed and how staff members spend their time caring for patients. On general adult units, psychiatric staff averaged ten hours per patient per 24-hour day, roughly 55 percent of staff time was involved in psychiatric care, medical-related nursing and personal care accounted for 10 percent of staff time, and milieu time took up 34 percent of staff time. Small general adult and geriatric units required 50 percent more staff time per patient than large units. More research is needed to determine how recent changes in the method of payment affect these facilities.