Green’s Dictionary of Slang

psycho v.

[SE psychoanalyse]

1. (Aus.) to work out a person’s state of mind.

[UK]J. Cary Moonlight (1995) 169: ‘It’s a complex,’ said Kathy. ‘We ought to get her psychoed.’.
[Aus]‘No. 35’ Argot in G. Simes DAUS (1993).

2. to suspend or dismiss a person from work for psychological reasons.

[US]M. McAlary Crack War (1991) 58: Richie was suspended right then and there [...] Psychoed him right out of the job.

In phrases

psycho (off) (v.)

(UK prison) to be sent to a psychiatric prison.

[UK]J. Hoskison Inside 44: I wanted to get psychoed off.
psycho out (v.)

to subject to psychiatric tests.

[US]W. Eastlake Castle Keep (1966) 145: You haven’t been psychoed out.