February 3, 2020

Need for nursing facility (NF) services is defined by individual states, all of whom establish NF level of care (LOC) criteria. The LOC assessments are conducted for NF applicants separately from the PASRR process, but Section 1919(b)(3)(F) of the Social Security Act prohibits NFs from admitting any new resident who has serious mental illness (SMI) or an intellectual disability or related condition (ID/RC), unless it has been determined by the State Mental Health Authority (SMHA) or State Intellectual Disability Authority (SIDA) that because of the physical and mental condition of the individual, nursing facility services are needed.

Nursing facility services are defined in the statute at §1919(a)(1) as:

• Skilled nursing care and related services for residents who require medical or nursing care;

• Rehabilitation services for the rehabilitation of injured, disabled, or sick persons; or

• On a regular basis, health-related care and services to individuals who because of their mental or physical condition require care and services (above the level of room and board) which can be made available to them only through institutional facilities.

Section §1919(e)(7)(B) of the Act requires the SMHA and SIDA to evaluate and determine whether an applicant or resident with SMI or ID/RC requires NF services. Such evaluations and determinations are required before an applicant’s admission to a NF and promptly after the NF determines a resident has experienced a significant change in physical or mental status. (See also 42 CFR §483.20(b)(2)(ii)).

PASRR regulations at 42 CFR §483.126 specify that admission of an individual with a mental illness or intellectual disability to a nursing facility (NF) may be considered appropriate only:

• When the individual's needs are such that he or she meets the minimum standards for admission, and

• The individual's needs for treatment do not exceed the level of services which can be delivered in the NF to which the individual is admitted either through NF services alone or, where necessary, through NF services supplemented by specialized services provided by or arranged for by the state.

When making the NF determination, the Level II evaluator must consider:

• The particular nursing facility to which the person has applied and its capability to meet the person’s service needs

• The specialized services available to the person from the state; and

• The other considerations under 42 CFR 483.132(a)

To determine whether a NF applicant or resident requires nursing facility services, the SMHA or SIDA must verify the person meets NF level of care and that NF placement is appropriate. The SMHA and SIDA must make determinations consistent with any Medicaid program rules.

If a person meets a state’s level of care criteria and wishes to enter a NF, his or her choice must be respected, with the PASRR process leading to recommendations that allow the individual to make an informed choice. Within the Level II process, the evaluator should consider whether the NF is the most appropriate placement for the individual, taking into account the person’s total needs and any possible specialized services the person may require.

While again, the individual’s choices must be respected, the SMHA and SIDA may make recommendations to the individual about where she or he may be able to receive services, including other institutional or home and community placements, ensuring that the individual is fully informed of all options. Additionally, the Level II evaluation seeks to ensure the individual is not being inappropriately presumed to meet NF level of care simply because there is a SMI or ID/RC.