Objective: To explore the method of formulating critical value (CLV) standards for psychiatric patients and analyze the effect of its clinical application. Methods: Research time: January 2024 to December 2025, the research subjects were 62 psychiatric patients admitted to the psychiatric department of our hospital. According to the different criteria for determining the critical value of the test, they were divided into a research group and a control group, with 31 cases in each group. The research group used the specially formulated critical value standards for psychiatric patients to carry out inspection management, while the control group used conventional clinical inspection risk assessment methods for management. Explore the application effects of the 2 groups. Results: A total of 31 cases of critical value testing occurred in the study group, and 30 cases were correctly identified; a total of 31 cases of critical value testing occurred in the control group, and 23 cases were correctly identified, with a comparison P < 0.05. The incidence of adverse events in the study group was lower (3.23% vs 19.35%), with a comparison P < 0.05. The test report turnaround time and hospitalization time of the study group were shorter than those of the control group, P < 0.05. Conclusion: Combining the clinical characteristics of patients with mental illness, the critical value standard developed through the three-step method of literature review, expert consultation, and clinical verification can effectively improve the accuracy of critical value identification, shorten the turnaround time of test reports, avoid the occurrence of adverse events, and thus improve the prognosis of patients.