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Screening for Mental Illness in Nursing Facility Applicants:
Understanding Federal Requirements
I. Executive Summary
Medicaid law and regulations require States to have a Preadmission Screening and Resident Review (PASRR)1 program to determine whether nursing facility applicants and residents require nursing facility services and specialized mental health care. Congress developed the PASRR program to prevent inappropriate admission and retention of people with mental disabilities in nursing facilities, as part of the Omnibus Budget Reconciliation Act (OBRA) 1987. Several recent studies raise questions concerning the effectiveness of the PASRR program, suggesting that the program creates barriers for persons requiring nursing facility placements and does not ensure access to appropriate psychiatric services.
As part of a larger evaluation of the PASRR program, this paper reviews the literature concerning PASRR and mental health services for persons in nursing facilities. It details the Federal laws and regulations concerning PASRR, reviews key policy issues from the literature, clarifies frequently asked questions regarding the process, and identifies additional policy questions to be studied.
The following is a summary of the findings of the literature review and the key issues concerning the implementation of PASRR.
PASRR Process
- Under the PASRR program, the Medicaid statute prohibits nursing facilities (NFs) from admitting any individual with a serious mental illness (SMI) unless the State Mental Health Authority (SMHA) has determined that the individual requires the level of services the facility provides. Further, the SMHA must determine whether the individual requires specialized services to treat his/her mental illness. If placing the individual in an NF is deemed appropriate and the individual requires specialized mental health services, the State Medicaid agency must provide or arrange for provision of such services. SMHAs also must review the needs of NF residents with SMIs for NF services and specialized care.
- To determine the universe of NF applicants who must have a PASRR (i.e., Level II) evaluation, regulations require that States conduct a Level I screening to identify individuals suspected of mental illness. The Level I identification may be conducted by the State Medicaid agency, the nursing home, or any other agent specified by the State. If Level I identification screening indicates the individual may have a mental illness, a Level II screening must be conducted. The Level II screening requires a two-pronged determination by the State Mental Health Authority: (1) whether the individual requires NF services and (2) whether the individual requires specialized mental health services. Determinations must be based on an independent evaluation conducted by an entity other than the State Mental Health Authority or a nursing home. People with SMI who do not require NF services may not be admitted to the NF. If the individual with SMI needs NF services and specialized services, the State Medicaid agency must provide or arrange for such specialized services.
State Variations in PASRR Implementation
- Under OBRA 1987 and the resulting 1990 and 1992 regulations, no mandated process existed for preadmission screening and no required screening tools were identified for the States to implement. The 1990 and 1992 regulations granted States enormous flexibility in implementing even the most basic operational aspects of PASRR, such as the criteria that trigger a PASRR screen and the very definition of what constitutes specialized services. Consequently, any comparison among States must explicitly identify such differences.
Current Issues and Concerns
- Funding PASRR screens and specialized treatment is a challenge for States. If individuals need specialized services to treat their mental illnesses, the State Medicaid agency ultimately is responsible for providing or arranging for provision of those specialized services. To prevent duplicate payment, no Federal financial participation (FFP) is available to reimburse specialized services that are NF services (other than NF services). However, FFP is available for specialized services that are state plan services. Although the Federal Government will match State expenditures to meet PASRR requirements, it does not fund alternative placements.
- The statutory definition of mental illness (for PASRR) does not include persons with dementia, including Alzheimer's disease and other organic brain disorders, unless their primary diagnosis is an SMI. As a result, the identification and provision of specialized mental health service needs for this population becomes the responsibility of the NF within the nursing facility payment.
- Although diagnosing SMI is subject to Federal minimum requirements, States are allowed to administer their own instruments to screen for suspected mental illness. Hence, an individual might be identified as experiencing an SMI in one State but not in another. Similarly, with no standardized definition for "specialized mental health services," some States limit these services to acute inpatient care; others include a combination of inpatient and community-based services.
1 This program was enacted as part of the Nursing Home Reform Act under the Omnibus Budget Reconciliation Act OBRA 1987, as amended by OBRA 1990, 42 U.S.C. 1396r(e)(7). Originally the program included an annual resident review and was referred to as the Preadmission Screening and Annual Resident Review (PASARR) program. Under the Balanced Budget Amendment of 1996, P.L. 104-315, or 42 USC 1396r, the requirement for "annual" resident review, however, was eliminated and replaced with a requirement to screen when "there is a significant change in physical or mental condition." Therefore, the current program acronym of PASRR will be used to refer to the program throughout this paper.
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