We applied an American medical necessity scale, Level of Care Utilization System for Psychiatric and Addiction Services (LOCUS), to psychiatric practice in Japan. This is an exploratory analysis of empirical data of 272 patients. We examined the relationships between levels of care of LOCUS and clinical variables, contribution of care levels on admission decision, and changes in care levels over time. Inpatients showed significantly higher levels of care than outpatients. Levels of care showed significant strong inverse correlations to Global Assessment Scale (GAS) scores, and significant moderate correlations to admission types, care environment, and diagnostic subgroups in almost all groups. Levels of care contributed as much to the admission decision as GAS scores. Levels of care significantly decreased from the time of admission to discharge. Our preliminary evidence indicates that LOCUS is valid and sensitive to change, and applicable for clinical use in Japan.