The Code of Federal Regulations (CFR) is clear at §483.102 that PASRR is required for all individuals who apply to or reside in a Medicaid-licensed nursing facility (NF), regardless of insurance type (Medicaid, Medicare, or private pay). Thus, private pay applicants who test positive at Level I could be found at Level II to need specialized services. By definition, however, all services supplied to individuals who have private insurance are not covered by the state. This includes specialized services, whatever those are determined to be.
If an individual enters a NF with private pay, and is judged by PASRR to need specialized services, the state does have an obligation to help arrange for the provision of specialized service -- though not to pay for them, at least not until the individual becomes Medicaid eligible.