Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
YOUNGER NURSING FACILITY 
RESIDENTS WITH MENTAL ILLNESS: 
Preadmission Screening and 
Resident Review (PASRR) 
Implementation and Oversight 
JANUARY 2001 
OEI-05-99-00700  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), mandated by Public Law 95-452, as 
amended by Public Law 100-504, is to protect the integrity of the Department of Health and 
Human Services programs as well as the health and welfare of beneficiaries served by them.  This 
statutory mission is carried out through a nationwide program of audits, investigations, 
inspections, sanctions, and fraud alerts.  The Inspector General informs the Secretary of program 
and management problems and recommends legislative, regulatory, and operational approaches to 
correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Chicago Regional Office prepared this report under the direction of William C. Moran, 
Regional Inspector General and Natalie Coen, Deputy Regional Inspector General.  Principal OEI 
staff included: 
REGION  HEADQUARTERS 
Emily Melnick, Project Leader
 Susan Burbach, Program Specialist 
Ianna Kachoris, Program Analyst
 Bambi Straw, Program Specialist 
Stacy Thompson, Intern
 Linda Moscoe, Program Analyst 
Kristine Zeabart, Intern
 Brian Ritchie, Program Analyst 
To obtain copies of this report, please call the Chicago Regional Office at 312-353-4124. 
Reports are also available on the World Wide Web at our home page address: 
http://www.dhhs.gov/progorg/oei  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To examine the safeguards that ensure the appropriate admission and mental health 
treatment of younger Medicaid beneficiaries, ages 22 to 64, who have a serious mental 
illness and reside in nursing facilities. 
BACKGROUND 
This inspection is one in a series of Office of Inspector General reports on individuals with 
mental illness in nursing facilities.  A follow-up inspection to this report, Younger 
Nursing Facility Residents with Mental Illness: A Population Unidentified (OEI-05-99-
00701) is an attempt to determine the extent to which younger individuals with mental 
illness reside in nursing facilities. 
Preadmission Screening and Resident Review (PASRR) -- Nursing Facility 
Admission Requirements 
The Social Security Act does not allow a nursing facility to admit any resident who has a 
serious mental illness unless the State mental health authority has determined that the 
individual, because of a physical and mental condition, requires the level of services 
provided by a nursing facility.  In addition, the State mental health authority must 
determine whether an individual requires specialized services for their mental illness, and 
must provide such services. 
The Omnibus Budget Reconciliation Act of 1987 (OBRA-87) mandated Preadmission 
Screening and Resident Reviews (PASRR).  The intent of the PASRR process is to ensure 
that only individuals with serious mental illness who are in need of nursing facility care be 
admitted and continue to reside in nursing facilities, and to determine whether persons 
with serious mental illness need specialized mental health services. 
The Olmstead Decision 
The 1999 Olmstead Supreme Court decision mandates that States provide community-
based treatment for persons with mental disabilities when the States treatment 
professionals determine that such placement is appropriate.  States must take into 
consideration their resources and the needs of other people with mental disabilities in 
making such determinations. 
We collected information and data from Medicaid programs and from surveys of State 
officials involved in mental health services and nursing home care. We made onsite visits 
to 19 purposively-selected nursing facilities in five States. 
i 
PASRR Implementation and Oversight  OEI-05-99-00700  We reviewed detailed information about 187 nursing facility resident Medicaid 
beneficiaries, ages 22 to 64, with a serious mental illness. 
FINDINGS 
Preadmission Screening and Resident Reviews are not in compliance with 
Federal requirements 
The PASRR system is the primary mechanism by which individuals with mental illness in 
nursing facilities are monitored.  We found little evidence that Level I PASRRs, which are 
screens to identify an individuals mental illness, are completed.  Only 47 percent (88 of 
187) of residents we sampled in the five case study States had a Level I PASRR screen in 
their nursing facility records.  An initial Level II PASRR confirms the existence of a 
serious mental illness, the need for nursing facility services and the specialized services a 
resident may need.  Our case file review revealed that only 41 percent (77 of 187) files had 
any evidence of a Level II PASRR.  Most of these residents had only a determination 
letter or a form with the signature from a State contracted physician, not the actual 
assessment in their record. 
Level II PASRR reviews, hereafter referred to as reassessments, are triggered by a 
significant change in a residents mental health condition.  These reassessments rarely 
occur.  Sixteen of the 19 nursing facilities we visited had never contacted the appropriate 
State agency about a significant change in a residents mental health status.  Our case file 
review indicated that only 29 percent (22 of 77) of individuals with an initial Level II 
PASRR, also had a Level II PASRR reassessment.  All of these reassessments were 
completed at the time when an annual reassessment requirement was still in effect. The 
annual reassessment requirement was repealed in 1996. 
PASRR does not ensure that mental health needs are assessed 
The Federal definition of serious mental illness puts forth multiple conditions to be met 
to classify an individual as requiring a Level II PASRR mental health assessment.  This 
may enable States to avoid assessment of some residents with serious mental illness. 
Nursing facilities have their own admissions process to determine their ability to care for 
an applicant, which may not incorporate the PASRR assessment. 
The Level I PASRR screen is viewed by many nursing facilities in all five States we visited 
primarily as an indication of eligibility for Medicaid reimbursement, not as an evaluation 
tool. 
ii 
PASRR Implementation and Oversight  OEI-05-99-00700  States may violate the intent of the Federal requirement to provide mental health 
services 
States definitions of specialized services may enable them to avoid their responsibility 
to provide mental health services.  Four of the 5 States we visited and 15 of the States 
responding to our survey define specialized services as 24-hour inpatient psychiatric 
treatment.  Under this definition, a nursing facility is not a 24-hour psychiatric treatment 
facility and residents in nursing facilities are excluded from receiving specialized 
services.  Limiting the definition in this way excludes the provision of certain mental 
health services to individuals in nursing facilities and relieves States of their responsibility 
to provide this care. 
Nursing facilities receive little information from the State regarding the Level II PASRR 
mental health evaluations.  In the few cases where nursing facilities receive specific 
information, it is in the form of recommended services which the State does not require 
them to provide. 
Many respondents, including State agencies, Long-Term Care Ombudsmen, mental health 
advocates and nursing facilities, indicated that they are concerned that younger individuals 
with mental illness are not receiving mental health treatment in nursing facilities. 
PASRR systems function with little State and Federal oversight 
States do not routinely ensure that Level I PASRR identification forms accurately reflect 
an applicants mental health status.  States do not have a systematic process to ensure that 
an individual is getting the mental health services that were indicated as necessary or 
recommended on the Level II PASRR or Level II PASRR reassessment. 
Most States rely on the nursing facility survey agency to monitor the PASRR process. 
However, surveyors reported that monitoring the PASRR process is not their 
responsibility.  The OBRA 87 survey requirements do not include a review of PASRR 
forms or process.  Most State mental health authorities in our case study States do not 
consider it their responsibility to monitor or provide treatment for residents of nursing 
facilities with mental illness. 
States do not have a mechanism to ensure that PASRR Level II reassessments are 
appropriately triggered.  Many nursing facilities, surveyors and State agencies indicate that 
the definition of significant change for nursing facility residents with mental illness and 
the criteria to trigger a Level II PASRR reassessment are unclear. 
The Health Care Financing Administration (HCFA) regional offices and headquarters do 
not currently monitor the PASRR process or provide related guidance to the States. 
State Long-Term Care Ombudsmen report that they primarily focus attention on the needs 
of geriatric nursing facility residents, not the younger population with mental illness. 
iii 
PASRR Implementation and Oversight  OEI-05-99-00700  RECOMMENDATIONS 
Improve States capacity to identify individuals with mental illness and determine 
appropriate facility placement 
We recommend that HCFA: 
C  ensure completion of the Level I PASRR screens prior to nursing facility 
admission; 
C  require that Level II PASRR evaluations be triggered if at least one indicator of 
serious mental illness is identified; and 
C  outline and enforce State requirements for Level II PASRR evaluation summary 
reports that are to be shared with the admitting nursing facility. 
Improve oversight of the PASRR process and access to mental health treatment 
We recommend that HCFA:

C  provide regional PASRR training to surveyors and add a PASRR component to

survey requirements; 
C  require the use of the Level II PASRR evaluation in care planning; 
C  require that State surveyors monitor to ensure care plan compliance; and 
C  provide States with technical assistance to develop an additional mechanism to 
monitor the PASRR process. 
Ensure that placement of an individual with mental illness in a nursing facility is 
not a means of avoiding responsibility for the provision of specialized mental 
health services 
We recommend that HCFA: 
C  define specialized services that are to be provided by the State and made available 
to individuals with mental illness in nursing facilities. 
Improve ability of nursing facilities to identify significant change and to make 
appropriate referrals 
We recommend that HCFA: 
C  clarify the definition of significant change and implement a mechanism to ensure a 
Level II PASRR reassessment is completed. 
Improve Federal monitoring and oversight 
We recommend that HCFA:

C  clarify the role and responsibilities of the regional HCFA PASRR contact;

C  require a standardized annual State report to include data regarding the number of

Level I and II PASRRs completed and the placement and treatment results, by age; 
and 
iv 
PASRR Implementation and Oversight  OEI-05-99-00700  C	 specify which unit(s) within HCFA have responsibility for ensuring appropriate 
implementation, completion and compliance. 
Improve the Level II PASRR process and ensure compliance with the Olmstead 
Decision 
We recommend that HCFA: 
C	 require that State Medicaid agencies collaborate with State mental health 
authorities to identify and maintain a list of alternative community based treatments 
and to track the level of need and availability of such resources. 
We recommend that the Substance Abuse and Mental Health Services Administration

(SAMHSA):

C  provide annual guidance to State mental health authorities on appropriate

treatment, needed specialized and other mental health services; 
C  periodically review State mental health authorities Level II determinations; and 
C  provide annual guidance to State mental health authorities to identify alternative 
treatment options for individuals being considered for nursing facility placement. 
Clarify Agencies roles and responsibilities within the Department in overseeing 
the PASRR process 
To improve implementation and oversight of the PASRR process, the Department should 
determine and delineate HCFA and SAMHSAs responsibilities in overseeing the PASRR 
process. 
AGENCY COMMENTS 
We received comments from the Health Care Financing Administration and the Substance 
Abuse and Mental Health Services Administration.  The HCFA and SAMHSA concur 
with the majority of our recommendations.  We feel that HCFA and SAMHSAs 
commitment to the effectiveness of the PASRR process is of particular importance in light 
of the recent Olmstead Decision. Where appropriate, we changed the report to reflect both 
HCFA and SAMHSAs comments.  The full text of the comments are contained in 
Appendix B. 
The HCFA believes our recommendations will help [them] make sound policy decisions 
about how best to protect the interests of younger Medicaid beneficiaries who have a 
serious mental illness...and reside in nursing facilities.  In addition, HCFA will attempt to 
augment [our] recommendations with companion efforts that would expand community 
alternatives and will coordinate planning for PASRR improvements with those community 
service improvement efforts.  We would like to thank HCFA for their assistance in 
conducting this study and for providing us with substantive and insightful comments. 
v 
PASRR Implementation and Oversight  OEI-05-99-00700  The HCFA concurred in full with 24 of the 30 ways to achieve our recommendations. 
The agency proposes an alternative solution or will further consider six recommendations 
with which they do not concur.  A discussion of HCFAs comments are contained on 
pages 28 and 29 of the report. 
We would also like to thank SAMHSA for their assistance in conducting this study and for 
their supportive comments. The agency agrees in full with 5 of the 6 specific 
recommendations that apply to them.  In addition, it concurs with our broader 
recommendation to determine and delineate HCFA and SAMHSAs responsibilities in 
overseeing PASRR determinations.  The SAMHSA is working together with HCFA in 
addressing the Olmstead Decision and other key areas regarding behavioral health 
services.  A discussion of SAMSHAs comments are contained on page 30 of the report. 
vi 
PASRR Implementation and Oversight  OEI-05-99-00700  T A B L E   O F   C O N T E N T S  
PAGE 
EXECUTIVE SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

PASRR screenings and assessments not in compliance with Federal requirements  . . . . . . .  10

PASRR does not ensure that mental health needs are assessed . . . . . . . . . . . . . . . . . . . . . . 12

States may violate intent of Federal requirement to provide mental health services . . . . . .  14

PASRR systems function with little State and Federal oversight . . . . . . . . . . . . . . . . . . . . .  17

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24

AGENCY COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28

APPENDICES

A. One State has a special oversight branch to monitor PASRR process  . . . . . . . . . . . . . .  31

B. Agency Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

vii 
PASRR Implementation and Oversight  OEI-05-99-00700  I N T R O D U C T I O N  
PURPOSE 
To examine the safeguards that ensure the appropriate admission and mental health 
treatment of younger Medicaid beneficiaries, ages 22 to 64, who have a serious mental 
illness and reside in nursing facilities. 
BACKGROUND 
In 1955, State mental health hospitals began reducing their resident populations and 
many patients were transferred to nursing facilities and other residential facilities.1  In 
1987, legislation was enacted to prevent the inappropriate admission and retention of 
people with serious mental illness and determine their need for specialized services. 
The Omnibus Budget Reconciliation Act of 1987 (OBRA-87) mandated preadmission 
screening to ensure that only individuals with serious mental illness in need of nursing 
facility care be admitted to nursing facilities, that these individuals need for 
specialized services be determined, that facilities provide active mental health 
treatment to residents with a primary mental illness and that yearly reviews be 
conducted for each resident.2  The preadmission screening and resident review 
(PASRR) is the primary mechanism that is used to ensure appropriate nursing facility 
placement and that mental health needs are addressed. 
We focus our attention in this report on younger individuals with mental illness who 
are ages 22 to 64.  Both Medicaid and Medicare impose limitations on coverage for 
the long-term care of individuals with mental illness in this age group.3  They may be 
more vulnerable to difficulties in accessing mental health treatment due to these 
restrictions.  In addition, according to the Surgeon Generals report, adults with 
mental illness in mid-life may confront many special service delivery problems, 
including proper identification and treatment. 
1  Psychiatric Services 51:354-358, March 2000. 
2	 The Nursing Home Facility Resident Reform Act, P.L. 104-315 in 1996, repealed the annual 
review requirement. 
OBRA 1990 replaced the term active mental health treatment with specialized services. 
3	 42 C.F.R. 1905(h)(1)(C). The 21st birthday is the cut off point for benefits unless the beneficiary 
is under psychiatric care prior to and following his/her 22nd birthday  whichever comes first. 
1 
PASRR Implementation and Oversight  OEI-05-99-00700  Funding for Mental Health Services 
Medicaid funds both outpatient and inpatient services including long-term service 
through hospitalization and residential treatment for individuals with mental illness 
under 21.4  Certain mental health services are covered by Medicare for individuals 
with mental illness 65 and over. 
The primary financial responsibility to cover the long-term care of individuals with 
mental illness ages 21 to 64 lies with the State mental health authorities (SMHA).  The 
Social Security Act states that services provided in an Institution for Mental Disease 
(IMD) will not be covered by Medicaid for individuals ages 21 to 64.  The Act defines 
such institutions as a hospital, nursing facility, or other institution of more than 16 
beds, that is primarily engaged in providing diagnosis, treatment, or care of persons 
with mental diseases, including medical attention, nursing care and related services.5 
Medicaid ruled that it would pay for the care of individuals with mental illness in 
nursing facilities where 50 percent or less of the facilitys beds were filled by residents 
with mental illness.  Therefore, there are financial incentives to place a younger 
individual with mental illness into a nursing facility in order to receive payment from 
Medicaid rather than the State mental health authority. 
The Substance Abuse and Mental Health Services Administrations (SAMHSA) 
Community Mental Health Services Block Grant is given to States to provide mental 
health services to individuals with mental diseases.  The SAMHSAs Center for Mental 
Health Services is mandated to assume a leadership role in delivering mental health 
services, generating and applying new knowledge, and establishing national mental 
health policy.6  The Center helps States improve and increase the quality and range of 
their treatment, rehabilitation, and support services for people with mental illness. 
Placement for Individuals with Mental Illness 
Nursing facilities have traditionally been the last refuge for individuals with mental 
illness.  Individuals with mental illness may find themselves in a nursing facility because 
of physical and behavioral problems, the lack of caretakers, or insufficient community 
services, including long-term care.7  Federal nursing facility regulations stipulate that 
when evaluating an individual with mental illness for nursing facility placement, 
evaluators must first assess whether the individuals total needs are such 
4  1999 Surgeon Generals Report 
5  SSA Section 1905 (h)(2)(i)

6  ADAMHA Reorganization Act, Public Law 102-321(1992 ).

7  American Psychiatric Association, Psychiatric Services 51:354-358, (March 2000).

2 
PASRR Implementation and Oversight  OEI-05-99-00700  that they can be met in an appropriate community setting.  If not, the evaluation must 
determine if inpatient care is appropriate and desired, and whether a nursing facility or 
another institution such as a psychiatric hospital would be an appropriate placement.8 
The availability of long-term care community mental health services varies widely by 
State and community. 
Olmstead Decision 
The Administration has recently brought into question the long-term care of 
individuals with mental illness in nursing facilities.  The 1999 Olmstead Supreme Court 
decision mandates that States provide community-based treatment for persons with 
mental disabilities when the States treatment professionals determine that such 
placement is appropriate.  States must take into consideration their resources and the 
needs of other people with mental disabilities in making such determinations.  In 
response to the decision, the Secretary issued a letter to all governors in January 2000, 
stating that no person should have to live in a nursing facility or other institution if he 
or she can live in his or her community.  Moreover, the Secretary said that 
unnecessary institutionalization of individuals with disabilities is discrimination under 
the Americans with Disabilities Act.9 
Surgeon Generals Report 
Additional recent attention to the care of individuals with mental illness in nursing 
facilities was initiated by the 1999 U.S. Surgeon Generals report on Mental Health 
which indicates that there are major barriers that prevent the delivery of appropriate 
care to residents of nursing facilities who have mental illness.10  Researchers have 
found that, despite a high prevalence of individuals with mental illness residing in 
nursing facilities, these facilities are ill equipped to meet their needs.11  Further, 
experts believe that the placement of non-elderly residents with mental illness in 
nursing facilities with elderly residents raises questions regarding the ability of nursing 
facilities to provide appropriate care to both populations.  There are significant 
differences between the needs of the geriatric population and of younger adults with 
mental illness that reside in nursing facilities. 
The number of individuals with serious mental illness who are residents of nursing 
facilities is unknown.  We examined various data sources to determine 
8  42 C.F.R. 483.132 (a) (1999). 
9  U.S. Seeks More Care for Disabled Outside Institutions. New York Times, February 13, 2000 
10  Mental Health: A Report of the Surgeon General, 374 (1999). 
11	 Lombardo, N.E. Barriers to mental health services for nursing home residents. Washington, DC: 
American Association of Retired Persons (1994). 
3 
PASRR Implementation and Oversight  OEI-05-99-00700  the number of individuals and costs pertaining to the care of persons with mental 
illness in nursing facilities, primarily focusing of individuals ages 22 to 64. 
Preadmission Screening and Resident Reassessment -- Nursing Facility 
Admission Requirements 
The Social Security Act [Section 1919(b)(3)(F)(i)] does not allow a nursing facility to 
admit any resident who has a mental illness unless the State mental health authority has 
determined that the individual, because of a physical and mental condition, requires the 
level of services provided by a nursing facility.  In addition, the State mental health 
authority must determine whether an individual requires specialized services for 
his/her mental illness. 
In order to identify individuals who may have a serious mental illness, the Nursing 
Home Reform Act of 1987 required that all nursing home applicants, regardless of 
payment source, be given a preadmission screening and annual resident review 
(PASARR).12  Effective in October 1996, the Federal requirement for annual resident 
review or reassessment was eliminated and the screen is now referred to as the 
preadmission screening and resident review (PASRR).13  The screening to identify an 
applicants mental illness is referred to as the Level I PASRR or Level I PASRR 
screen.  Under Federal regulations, an individual is considered to have a serious mental 
illness if they meet requirements on diagnosis, level of impairment and duration of 
illness.14  Specifically, an individual must have a major mental illness diagnosis, not 
including dementia and organic brain disorders including Alzheimers disease, (unless 
the primary diagnosis is a serious mental illness), a functional limitation within the past 
3 to 6 months and have had psychiatric treatment more intensive than outpatient care 
in the past 2 years.  Although there are minimum Federal PASRR requirements, States 
may design their own PASRR forms and may choose a more inclusive criteria for 
identifying a serious mental illness. 
An independent physical and mental evaluation referred to as the Level II PASRR 
must be completed for individuals who meet the requirements of serious mental illness, 
as indicated on the Level I PASRR screen.  The Level II PASRR evaluation must be 
completed by an independent entity with whom the State Medicaid agency contracts.15 
The Level II PASRR evaluation objectives are to: 
12	 Omnibus Budget Reconciliation Act of 1987, P.L. 100-203. The PASRR requirement also 
applies to individuals with mental retardation or developmental disabilities. 
13  The Nursing Home Facility Resident Act, P.L. 104-315. 
14  42 C.F.R. 483.102 (b)(1)(1999). 
15	 The Level II PASRR may be contracted to a private entity or may be contracted to another State 
agency. In 2 of the 5 States we visited, the completion of the Level II PASRR and the 
determination for nursing facility placement is contracted to the State Department on Aging. 
4 
PASRR Implementation and Oversight  OEI-05-99-00700  C  confirm whether or not applicants have a serious and persistent mental 
illness, 
C  determine whether such applicants require nursing facility services, and 
C  determine whether such applicants require specialized services for their 
mental illness. 
The SMHA, based upon the independent physical and mental evaluation, makes the 
final determination on whether a person requires nursing facility placement and 
specialized services.  The SMHA may verbally convey Level II PASRR determinations 
to nursing facilities and individuals and must subsequently confirm the determination in 
writing.16 
Further, once an individual with mental illness is admitted to a nursing facility, if there 
is a significant change in his/her physical or mental condition which has a bearing 
on their active treatment needs,  the nursing facility is required to promptly notify the 
SMHA.  The Health Care Financing Administration has instructed that significant 
change should be identified when a residents Minimum Data Set (MDS) assessment 
indicates that "a more immediate annual resident review is warranted."17  The SMHA 
is then required to conduct a Level II resident review or reassessment.18 
Mental Health Services for Nursing Facility Residents with Mental Illness 
When notifying individuals and nursing facilities of approval for nursing facility level of

care, State mental health authorities must also include whether specialized services

are necessary.  The SMHA must consider the need for specialized service when

making the determination concerning the need for nursing facility service. 

Specialized services are defined as services specified by the State which, combined

with services provided by the nursing facility result in the continuous and aggressive

implementation of an individualized plan of care.19  The SMHA must provide or

arrange for the provision of specialized services to all nursing facility residents with

mental illness whose needs are such that continuous supervision, treatment and

training by qualified mental health professionals is necessary.20

16  42 C.F.R. 483.112(c)(2)(1999).

17  HCFA December 1996 memorandum to the Division of Medicaid Regional Administrators. 

18  The Nursing Home Facility Resident Act, P.L. 104-315.

19  42 C.F.R. 483.112(a)(2)(1999).

20  42 C.F.R. 483.112(b)(1999). 

5 
PASRR Implementation and Oversight  OEI-05-99-00700  Mental health services of lesser intensity than specialized services must be provided 
by nursing facilities.  The Omnibus Reconciliation Act of 1990 added mental health 
services that are not the responsibility of the State to provide, to the list of services a 
nursing facility is required to provide.21  This was to clarify that any medically 
necessary mental health service a resident needs that is not a specialized service is 
the responsibility of the nursing facility to provide.  These services are not reimbursed 
separately by Medicaid, rather they are considered a condition of participation and 
must be paid for by the nursing facility or under some other arrangement with the 
State. 
Although Federal admission criteria mandates that facilities accept only those residents 
they are qualified to care for, no clear criteria exist for making such judgements.  To 
meet requirements for treating individuals with mental illness, nursing facilities must 
have the capacity to deliver mental health care by trained mental health professionals. 
However, the Surgeon Generals report indicates that Medicaid reimbursements for 
nursing facility residents have been too low to provide a strong incentive for 
participation by highly trained mental health providers.22 
Monitoring, Survey and Certification Requirements 
Responsibility for enforcing PASRR requirements is shared by the State Medicaid 
agency and HCFA.  State Medicaid agencies are required to deny Medicaid payments 
to nursing facilities if they provide services to individuals who have not been 
determined by PASRR to need nursing facility services.  The HCFA is responsible for 
monitoring States compliance with Federal PASRR requirements.  Specifically, 
HCFA is required to review a sufficient number of cases to allow reasonable inferences 
in regard to each States compliance with PASRR requirements regarding the 
discharge and placement of residents with specialized service needs and to report 
annually to Congress on the extent of State compliance with PASRR requirements.23 
Medicaid/Medicare nursing facility surveyors may, through the course of their survey 
and certification program, monitor the treatment of nursing facility residents with 
mental illness.  The Nursing Home Reform Act of 1987 amended the Medicaid 
program to establish a set of survey and certification requirements for all nursing 
facilities.24  States are responsible for surveying and certifying that nursing facilities 
comply with Medicaid nursing facility requirements.  Certification of facilities must be 
conducted by a multi-disciplinary team of professionals on an unannounced basis 
21  Section 1919(b)(4)(vii) of the Social Security Act 
22  Mental Health: A Report of the Surgeon General (1999). 
23  42 U.S.C. 1396r(f)(8)(B) and OBRA 1990, 4801(b)(5)(B). 
24  OBRA 1987, P.L. 100-203. 
6 
PASRR Implementation and Oversight  OEI-05-99-00700  at least every 15 months.  The Act also requires States to establish a process for the 
receipt, review and investigation of allegations of resident neglect and abuse. 
Each State has a Long-Term Care (LTC) Ombudsman office which in conjunction 
with local Area Offices on Aging oversee local Long-Term Care Ombudsmen who are 
advocates for residents of nursing facilities, board and care homes, assisted living 
facilities and similar adult care facilities.  The LTC Ombudsman program, established 
under the Older Americans Act, is administered by the Administration on Aging 
(AoA).  Nationally, thousands of volunteer LTC Ombudsmen regularly visit long-term 
care facilities and monitor conditions and care.  Any resident of a nursing facility, 
including those with mental illness, may fall under the auspices of the LTC 
Ombudsman program responsibilities. 
SCOPE 
This report evaluates State and Federal safeguards that ensure the appropriate 
admission and mental health treatment of individuals with mental illness residing in 
nursing facilities.  We focused our study population on Medicaid recipients between 
the ages of 22 and 64 with a severe and persistent mental illness as their primary or 
secondary diagnosis.  We did not evaluate residents with dementia, Alzheimers 
disease or other organic brain disorders.  We focused on this population because 
evidence suggests there are fundamental features of care and protection unique to 
younger adults, ages 22 to 64, with severe and persistent mental illness residing in the 
nursing facilities. 
We examined States PASRR processes which are designed to determine appropriate 
nursing facility placement and necessary mental health services for nursing facility 
applicants with mental illness.  The PASRR process also identifies and evaluates 
nursing facility applicants with mental retardation and developmental disabilities.  We 
have limited our study to the process as it relates to individuals with mental illness. 
We examined the systems in place to monitor the care of persons with mental illness in 
long-term care facilities including Federal and State survey and certification 
requirements.  We examined coordination between State agencies regarding the 
oversight and treatment of this population.  We did not conduct a medical review of 
resident records. 
This inspection is one in a series of Office of Inspector General reports on individuals 
with mental illness in nursing facilities.  A follow-up inspection to this report, 
Younger Nursing Facility Residents with Mental Illness: A Population Unidentified 
(OEI-05-99-00701) is an attempt to determine the extent to which younger individuals 
with mental illness reside in nursing facilities. 
7 
PASRR Implementation and Oversight  OEI-05-99-00700  METHODOLOGY 
We made onsite visits to five States -- California, Florida, Kansas, Minnesota and 
Pennsylvania -- to conduct State agency interviews, visit nursing facilities and conduct 
case file reviews.  We selected these States based on the high percentage of residents 
with a serious mental illness as their primary or secondary diagnosis in individual 
nursing facilities as identified by the Federal Online Survey and Certification Reporting 
System (OSCAR) data.  In addition, we selected States based on their submission of 
data to the Federal Medicaid Statistical Information System (MSIS) data system as of 
Fiscal Year 1998 and geographic location.25  In each of the 5 case study States, we 
selected 4 nursing facilities based on the high percentage of residents ages, 22 to 64, 
with a primary or secondary diagnosis of mental illness being cared for in that facility 
and geographic proximity.  One sampled nursing facility prohibited our entry. 
In the 5 case study States, we visited 19 nursing facilities and reviewed 187 resident 
case files of current nursing facility Medicaid residents between the ages of 22 and 64 
with a major mental illness diagnosis from the International Classification of Diseases, 
9th Revision (ICD-9) codes 293-301, 311, 312.  At each of the nursing facilities we 
visited, we determined if a Level I and Level II PASRR existed for each resident with 
a mental illness.  In addition, we interviewed the facility director, social service staff 
and other staff as available. 
We interviewed State representatives from Departments of Mental Health, Medicaid 
and Medicare/Medicaid Survey agencies and Long-Term Care Ombudsmen agencies, 
as well as mental health protection and advocacy representatives and nursing home 
associations.  We also interviewed HCFA regional survey and certification staff and 
PASRR contacts. 
For the 39 States that submitted Medicaid claims and eligibility information to HCFAs 
MSIS system in 1998, we identified the number of nursing facility residents between 
the ages of 22 and 64 with a primary or secondary diagnoses of severe mental illness 
that had a Medicaid claim. 
We used the Federal Minimum Data Set (MDS) to examine the number of assessments 
of nursing facility residents, ages 22 to 64, with a psychiatric diagnosis conducted 
during January through June 1999.  Nationally, during this period, there were 116, 287 
assessments of Medicaid nursing facility residents, ages 22 to 64. Of these, 73,586 (63 
percent) were for residents with a psychiatric diagnosis.  Of these, 17,553 (15 percent) 
were initial assessments for individuals with a psychiatric diagnosis admitted during 
this time period.  There were 45,710 Medicaid nursing facility residents with a mental 
illness, ages 22 to 64, during this period. 
25  All 5 States we visited submitted data to the Federal MSIS as of 1998. 
8 
PASRR Implementation and Oversight  OEI-05-99-00700  We also conducted a survey of all 50 States for each of the 4 different entities --
Mental Health, Medicaid and State Medicare/Medicaid Survey agencies and State 
Long Term Care Ombudsmen.  The intent of the survey was to understand the extent 
to which individuals with serious mental illness are being cared for in nursing facilities 
in each State, as well as the extent to which State regulations pertain to this 
population. We received 129 out of 200 (64.5 percent) surveys  42 from 
Departments of Mental Health, 36 from Medicaid agencies, 29 from State 
Medicare/Medicaid Survey agencies and 22 from the State LTC Ombudsmen. 
We conducted a purposive sample in order to give us greater understanding of 
individuals with mental illness, ages 22 to 64 who are nursing facility residents. We do 
not project our findings. 
We conducted our review in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
9 
PASRR Implementation and Oversight  OEI-05-99-00700  F I N D I N G S  
PASRR screenings and assessments are not in 
compliance with Federal requirements 
Only 47 percent (88 of 187) of the residents we sampled in the five case study 
States had a Level I PASRR screen in their nursing facility records 
Level I PASRR screens do not ensure that residents with mental illness are identified. 
Level I PASRR screens were found infrequently at nursing facilities.  Although 
required for all residents of nursing facilities, only 47 percent (88 of 187) of residents 
we sampled in the five case study States had a Level I PASRR screen in their case file 
or at the nursing facility.  For the case study States, the average rate of Level I 
PASRR screens in the case files that we sampled ranged from 11 to 100 percent by 
State.  Seventeen percent (15 out of 88) of the Level I PASRR screens we found were 
not completed prior to or on the date of admission to the nursing facility.  Fourteen 
Level I PASRR screens were dated more than 2 months after admission. 
There is little evidence that initial Level II PASRRs were conducted, and Level 
II reassessments rarely occurred for resident case files we reviewed 
Only 41 percent (77 of 187) of the resident files we reviewed had evidence of a Level 
II PASRR.  Our case file review revealed that most of these residents had only a 
determination letter or a form with the signature from a State contracted physician, not 
the actual assessment. 
Our case file review indicated that only 29 percent (22 of 77) of individuals with an 
initial Level II PASRR, also had an additional Level II PASRR reassessment.  All of 
the 22 Level II PASRR reassessments we encountered were completed while the 
annual reassessment requirement was still in effect.26  All five case study States 
eliminated the annual Level II PASRR review requirement for nursing facility 
residents, although States have the option of continuing it.  Seven States in our 50 
State survey indicated that they still require an annual PASRR review or reassessment. 
Sixteen out of 19 nursing facilities indicated that Level II PASRR reassessment of 
their residents have never been conducted. 
Sixteen of 19 nursing facilities are unclear what qualifies as a significant change and 
could not identify how a significant change should trigger a Level II PASRR 
reassessment.  Since the repeal of the annual review or reassessment, nursing facilities 
26  In 1996 the annual requirement for the Level II PASRRs was eliminated. 
10 
PASRR Implementation and Oversight  OEI-05-99-00700  must notify the State mental health authority when a resident with mental illness has a 
significant change in his/her physical or mental condition. 
Sixteen of the 19 nursing facilities we visited had never contacted the appropriate 
State agency about the significant change in residents' mental health status.  Ten of the 
nursing facilities we visited were aware of the Level II reassessment process if a 
significant change occurred.  In two of our case study States, we found no evidence 
that the Level II PASRR reassessment was completed out of the 72 reviewed files in 
those States.  In two other States, we found only one reassessment in each State out 
of a total of 62 reviewed files for those States.  In the fifth State, we found 20 
reassessments (37 percent) in the 53 files we reviewed.  In two nursing facilities, in 
two different States, the Director of Nursing said that a Level II PASRR reassessment 
was not triggered for residents who were diagnosed with bipolar disorders after 
admission. 
Some State respondents and nursing facilities identified the Minimum Data Set (MDS) 
assessments as the primary mechanism by which a Level II PASRR reassessment 
would be triggered.  However, while HCFA has suggested the use of the MDS to 
trigger Level II PASRR reassessments, the MDS captures an overall change in care 
status which is not necessarily an indicator for a mental health status change.  Our 
case file review revealed that none of the 21 residents, with an improved or 
deteriorated care status on either their most recent MDS assessment or one 
completed between April and June 1999, had a Level II PASRR reassessment.  One 
case study State reported that there is a movement to begin developing a pilot MDS 
protocol that contains criteria specific to individuals with mental illness. 
Case File Review   Evidence of PASRRs in Resident Files or Nursing Facility 
State  Total Case  Level Is  Level IIs  Level II 
File Reviews  Reassessment 
s 
1  39  32  10  0 
2  33  6  1  0 
3  53  6  31  20 
4  40  22  22  1 
5  22  22  13  1 
Total  187  88  77  22 
11 
PASRR Implementation and Oversight  OEI-05-99-00700  PASRR does not ensure that mental health needs are 
assessed 
Federal definition of serious mental illness may limit Level II PASRR 
assessments 
State Level I PASRR screens may not trigger a Level II PASRR mental health 
assessment for an individual with a severe and persistent mental illness.  Our case file 
review revealed that 41 percent (77 of 187) individuals with a serious mental illness 
diagnosis had a Level II PASRR.  The Federal definition of serious mental illness 
may enable States to avoid assessment of some residents with a serious mental illness 
by requiring that multiple conditions be met to classify them as requiring a Level II 
PASRR assessment.  An individual is considered to have a serious mental illness if they 
have a major mental illness diagnosis, a functional limitation within the past 3 to 6 
months and have had psychiatric treatment more intensive than outpatient care in the 
past 2 years.27 
The Federal definition of serious mental illness limits those individuals who are 
required to undergo a Level II PASRR mental health evaluation.  For example, 
individuals with a serious mental illness diagnosis, but no history of hospitalization in 
the past 2 years, are not required to be screened for needed mental health treatment or 
services before they are admitted to a nursing facility.  Individuals with no treatment 
history, such as homeless individuals with a mental illness or applicants who have 
avoided mental health treatment due to stigma, may continue to have their mental 
health needs ignored. 
Although there are minimum Federal PASRR requirements, States may design their 
own PASRR forms and may adopt a more inclusive definition of serious mental illness 
to facilitate referring more individuals to a Level II PASRR.28  However, most States 
infer from the Federal requirement that all three conditions must be met to warrant a 
Level II PASRR mental health assessment.  Fifty percent (15 of 30) State Level I 
PASRR forms that we reviewed require that all three conditions related to mental 
illness must be met to necessitate triggering a mental health assessment.  Twenty-six 
percent of the States (8 of 30) require that only one or two criteria be met to trigger 
the Level II assessment. 
One State reported that they require individuals who meet the Federal definition of 
serious mental illness to have a Level II PASRR, but they also require applicants who 
are considered a danger to self or others to have a Level II whether or not they have a 
mental illness diagnosis.  This State also gives nursing facilities the latitude to request 
27  42 C.F.R. 483.102(b)(1)(1999). 
28  HCFA 
12 
PASRR Implementation and Oversight  OEI-05-99-00700  that a Level II be done prior to admission or at any point during their stay at the 
nursing facility, if there are indicators of a serious mental illness, but may not fully 
meet the Federal definition.  For seven of the forms that we reviewed, it was unclear 
what conditions needed to be met to trigger the Level II PASRR assessment. 
Nursing facilities may not incorporate PASRR into their admissions process; 
PASRR is viewed as an eligibility indicator, not an evaluation tool 
Nursing facilities have their own individual admissions process to determine their 
ability to care for an applicant, which may not take into consideration the PASRR 
assessment.  Seven of the 19 facilities we visited reported that they did not use the 
PASRR to determine if they could accept a resident.  Many facilities reported that 
their process is more in-depth and accurate than the Level I PASRR forms which only 
asks for minimal information and is only a snap shot of the clinical needs that an 
individual may have.  Many facilities interview potential residents face to face, as 
opposed to the Level I PASRR screen which they view as only a paper review.  A 
nursing facility that we visited reported that they never look at the PASRRs and that 
they are filed in a folder separate from the residents files.  When we requested 
reviewing Level I and Level II PASRRs for sampled residents, this facility could not 
locate any of them.  One facility thought that the State had discontinued the PASRR 
process. 
State and nursing facility respondents indicate that the PASRR is what the States use 
to determine residents nursing facility eligibility.  In some States, the Level I PASRR 
is sent to the Medicaid office along with the Medicaid reimbursement form, and in 
others it is used to determine case mix reimbursement.  As such, most nursing facilities 
we visited view the Level I PASRR as a tool to determine Medicaid eligibility rather 
than as an evaluation tool.  These nursing facilities view the Level I PASRR as a 
formality and, more specifically, as an affirmation of applicant eligibility from the 
State.  The Level I PASRR authorizes a short stay until the Level II is completed. 
One facility reported that they would not be paid without the Level I PASRR screen, 
but rely more on a psychological profile than the PASRR.  Another State agency 
respondent stated that the Level I PASRR is not a medical instrument and anyone 
with knowledge of the applicant may complete it.  A respondent from a State mental 
health authority reported that they dont know that [the] Level I PASRR [process] is 
a good way of matching what a person needs with placement [because it is] structured 
more on eligibility versus needed resources. 
13 
PASRR Implementation and Oversight  OEI-05-99-00700  States may violate the intent of the Federal requirement to 
provide mental health services 
Implementation of the PASRR process may limit younger residents of nursing facilities 
access to mental health services due to: 1) a definition of "specialized services" that 
excludes residents of nursing facilities; 2) nursing facilities inability to address Level II 
PASRR recommendations, when available, in treatment and care planning process; and 
3) a lack of coordination between States and nursing facilities to provide 
recommended mental health services. 
States definitions of specialized services may enable them to avoid their 
responsibility to provide mental health services 
An individual admitted to a nursing facility may require specialized services as 
determined by the Level II PASRR.  States may adopt their own definition of 
specialized services.  The HCFA describes specialized services as services specified 
by the State which combined with services provided by the nursing facility, result in 
the continuous and aggressive implementation of an individualized plan of care.29 
Four of the five States we visited and 15 of 42 State mental health authorities 
responding to our survey define specialized services as 24-hour inpatient psychiatric 
treatment for an acute episode of mental illness.  Under this definition, a nursing 
facility is not a 24-hour psychiatric treatment facility and thus nursing facility residents 
are excluded from receiving specialized services. 
By defining specialized services as 24-hour inpatient psychiatric treatment, States may 
avoid providing necessary mental health services to nursing facility residents with 
mental illness and shift this responsibility onto nursing facilities.  In narrowing the 
scope of specialized services that the State is required to provide, States broaden the 
scope of services of lesser intensity that nursing facilities are required to provide. 
All of the States we visited indicated that if an individual requires the level of care 
identified as a specialized service, the individual would not be approved for nursing 
facility residence. 
In 3 of the 5 case study States, the State makes recommendations for mental health 
services for an individual when notifying a nursing facility of approval for placement as 
part of the Level II PASRR process.  Because they are not defined as specialized 
services, the States are not required to, nor did we find that they provide or pay for 
these recommended services.  Further, States do not follow up to ensure that nursing 
facilities are meeting or attempting to implement these recommendations.  States 
recommendations include group therapy, individual psychotherapy, continuing 
psychiatric evaluations, independent living training and vocational training. 
29  42 C.F.R. 483.120 (1999). 
14 
PASRR Implementation and Oversight  OEI-05-99-00700  Nursing facility residents with mental illness may have difficulty accessing 
more intensive specialized services 
Even when a nursing facility resident with mental illness is determined to require 
"specialized services," these individuals are not always able to access such services. 
Our case file review revealed that 5 of the 77 residents (7 percent) who had a Level II 
PASRR assessment were identified as needing specialized services.  Due to the States 
definition of specialized services as 24-hour inpatient care or a level of mental health 
care more intensive than a nursing facility, these five residents may need 24-hour care 
and may have been inappropriately placed in a nursing facility.  These residents may 
also have had a difficult time accessing more appropriate care and were thus unable to 
leave the facility, despite the States' PASRR recommendation. 
In 3 of the 5 case study States, nursing facilities reported that they have difficulty 
linking their residents to specialized services when a resident is experiencing an acute 
episode of mental illness and requires a more specialized setting or 24-hour inpatient 
treatment. 
Thirty percent (23 of 76) of State mental health authority and Medicaid agency 
respondents indicated that access to specialized services was an issue of great concern 
regarding the treatment of individuals with mental illness in nursing facilities.  One 
nursing facility indicated that one of its residents was identified by the State as 
inappropriate for a nursing facility and instead needed to be placed in a State 
institution for mental diseases.  However, the nursing facility was unable to find a 
facility willing to accept their resident into the program. 
The Level II PASRR evaluation does not appear to be used in care planning 
Most nursing facility respondents indicated that Level II PASRR evaluations are not 
used in the treatment or care planning process.  The actual physical and mental 
evaluation upon which the determination is based, is rarely sent to nursing facilities. 
Most nursing facilities responded that they never see the results of the Level II 
PASRRs.  Four of the five States we visited send out a letter documenting completion 
of the Level II PASRR and informing the nursing facility of the determination for 
placement.  In the one case study State where nursing facilities may receive a copy of 
the evaluation, one nursing facility indicated that their procedure is to send the Level II 
evaluation directly to the medical records unit without the staff social workers review. 
Other than the Level II PASRR determination letters with recommended mental 
health services, nursing facilities get little information from the State regarding the 
treatment needs of an individual based on the PASRR process.  In one State, a 
contracted physician visits a nursing facility and signs a standardized form in the 
residents file, logging that it has been completed.  In this State, nursing facilities report 
that State-contracted Level II PASRR evaluators complete the Level II PASRR 
15 
PASRR Implementation and Oversight  OEI-05-99-00700  mental health evaluation for approximately two of every five residents with a mental 
illness.  One nursing facility reported that aside from the letter from the State 
indicating that the Level II had been completed, the nursing facility doesnt get 
feedback or additional information regarding the Level II PASRR mental health 
evaluation. 
Respondents are concerned that younger nursing facility residents with 
mental illness may not have access to mental health services 
Respondents from 40 States, including State agencies, LTC Ombudsmen, mental 
health advocates and nursing facilities, indicated that they are concerned that 
individuals with mental illness are not accessing mental health treatment in nursing 
facilities.  Twenty-seven of 76 State Mental Health and Medicaid agency survey 
respondents indicated that access to necessary mental health care was an issue of great 
concern.  Eight respondents from four case study States indicated that nursing 
facilities primarily provide medication management for their residents with mental 
illness. 
State agency respondents in the five case study States indicated that some nursing 
facilities are more capable of providing linkages to mental health services than others. 
However, most nursing facilities reported that they do not have funding to provide 
necessary mental health services, bring in additional staff and/or arrange for 
transportation.  One State indicated that community psychiatric interventions funded 
by State funds are not permitted in a nursing facility since nursing facility psychiatric 
care in that State is considered to be a self-contained program appropriate and 
complete for clients at this level of care. 
Federal Financial Participation (FFP) is not available for specialized [mental health] 
services furnished to nursing facility residents as nursing facility services.30  States, 
however, receive FFP for services that are Medicaid optional benefits under their State 
plan services. For example, States may choose to cover psychologist, rehabilitative, 
case management, clinic and medical social workers services for nursing facility 
residents. 
States and nursing facilities we visited rarely coordinate to provide mental health 
services to nursing facility residents.  This lack of coordination may limit residents 
access to mental health services.  Most nursing facility respondents indicate that there 
is little cooperation from the State in linking their residents to State or county mental 
health services.  In one State, individuals with mental illness who have a case manager 
prior to admission may retain them to assist in accessing additional mental health 
services.  In another State, the protection and advocacy agency indicated that if a 
resident with mental illness has a case manager when s/he enters a nursing facility 
30  42 C.F.R. 483.124 (1999). 
16 
PASRR Implementation and Oversight  OEI-05-99-00700  they lose their case manager.  The State believes that once a resident with mental 
illness is in a nursing facility, they no longer need the case manager, seeing him/her as 
duplicative of the services the nursing facility should provide. 
Most of the protection and advocacy respondents in our case study States expressed 
concern about the mental health treatment received by individuals with mental illness 
in nursing facilities.  They were also concerned with the States ability to monitor these 
individuals, but were not particularly focused on this issue.  Three of five advocates 
reported their concern about the lack of mental health background and training of 
nursing facility employees working with this population.  A few advocates stated that 
they believe that if there were other mental health supports available in the community, 
then States would not be placing younger individuals with mental illness in nursing 
facilities.  Many State and nursing facility respondents reported that individuals with 
mental illness lack the strong type of advocacy community that helps individuals with 
developmental disabilities. 
While most State protection and advocacy agencies are not focused on nursing facility 
residents with mental illness, one case study State protection and advocacy agency has 
frequently been involved with this population.  Currently this States protection and 
advocacy agency is involved in a law suit regarding individuals with mental illness who 
are residents of a nursing facility who are not being informed of, assessed for, or 
provided with long-term care services at home or in the community. 
PASRR systems function with little State and Federal 
oversight 
In four of the five case study States, State agency respondents reported they were not 
aware of younger individuals with mental illness, ages 22 to 64, who were residing in 
nursing facilities without a physical co-morbidity and if there were, that it was a 
negligibly small population.  However, we found that all five case study States housed 
residents with mental illness without a co-existing physical illness in nursing facilities. 
In two of the five States, the majority of files we reviewed consisted of individuals 
with mental illness without a physical diagnosis.  We visited nursing facilities in three 
States where the majority of individuals in that facility had only a mental illness. 
States do not systematically monitor the PASRR process 
States do not routinely ensure that Level I PASRR forms accurately reflect an 
applicants mental health status.  States are relying on Level I PASRR screens that are 
completed by individuals who may not have any mental health training or background. 
In three of the five States we visited, those who complete the Level I PASRR screen, 
e.g. nursing facility and hospital staff, may not have a mental health 
17 
PASRR Implementation and Oversight  OEI-05-99-00700  background or training.31  In completing the Level I PASRR screen, nursing facilities 
may rely on mental health background information received from the applicant or a 
family member. 
Minimal State oversight of the accuracy of the Level I PASRR form enables the 
placement of individuals with mental illness in nursing facilities without the placements 
being scrutinized.  One facility reported that they heard that the county who 
administers the PASRR admissions process was going to be selective [about 
admissions], but we have only had one case denied for admission in the past 9 
months.  One State Medicaid agency believes the PASRR process is adequate based 
on the absence of identified or perceived problems. 
States do not have a systematic process to ensure that individuals are getting the 
mental health services that were indicated as necessary or recommendedon the Level 
II PASRR or a Level II PASRR reassessment.  Services are written on Level IIs as 
recommendations, not requirements.  States believe they are not obligated to follow up 
to ensure nursing facility compliance.  One State is currently undergoing a pilot 
tracking program to determine if they need to oversee mental health treatment 
delivered to individuals whom the State recommends receive specific services.  A 
respondent from that States Medicaid Agency reported that they have not reviewed 
their system in 12 years and believe that it is alarming that no one knows what 
happens once the letter [with treatment recommendations] is sent.  A respondent 
from another State reported that they have never tested the [PASRR] process 
enough and never bothered to enforce legislation.  In addition, the respondent felt 
that the PASRR is politically unpopular with the States legislature who do not see 
the need for the process and think that the PASRR is too paper heavy. 
States rely on surveyors to monitor PASRR process; surveyors report that it is 
not their responsibility 
In four of the five case study States, State mental health authorities and Medicaid 
Agencies said they relied on the State nursing home survey agency to monitor the 
PASRR process.  One SMHA relies on surveyors to ensure that Level II 
recommendations of treatment are implemented.  However, the surveyors we 
interviewed from this State reported that they did not follow up to review the 
implementation of treatment recommendations and were not familiar with the PASRR 
process.  Surveyors in all case study States reported that monitoring the Level I 
PASRR process was not their responsibility.  Only 1 out of 25 survey agencies in our 
larger sample reported that they had responsibility to monitor the Level I PASRR 
process. 
In addition, State agencies rely on surveyors to monitor whether an individual with 
mental illness has undergone a significant change in their mental health status and has 
31  In KS and MN trained Area on Aging staff complete the Level I PASRR screen. 
18 
PASRR Implementation and Oversight  OEI-05-99-00700  a Level II reassessment.  Most surveyors, however, report that they do not look for 
instances of  significant change in a residents mental illness status and then to see if 
a Level II PASRR has been appropriately triggered.  In addition, the Level II PASRR 
reassessment is not an element of the OBRA 1996 survey.  While some State 
surveyors are aware of the need for a Level II reassessment in certain circumstances, 
they are unclear what these circumstances are and what mechanism should be used by 
the nursing facility to trigger the reassessment.  In four of the five case study States, 
surveyors indicated that there are no guidelines for them with reference to the PASRR 
to indicate when there is a significant change that should warrant reassessment.  In one 
case study State, surveyors indicated that they check to see if a Level II PASRR 
reassessment should have been completed for sampled residents with a mental illness. 
These surveyors were specifically trained by the regional HCFA office on PASRR and 
mental health issues in nursing facilities. 
In most case study States, both surveyors and nursing facilities expressed concern that 
the surveyors were not adequately trained to assess the appropriate care needs of 
younger residents with mental illness.  Surveyors do not usually have a mental health 
background or mental health training, nor are they accustomed to evaluating the needs 
of younger individuals.  Most case study surveyors we spoke with report that they are 
not trained to review PASRR forms, primarily because it is not part of the OBRA 
1987 survey process.  Some nursing facility respondents in facilities with a significant 
number of individuals with mental illness, report that they are more knowledgeable 
than the surveyors about treating these individuals.  One facility reported that they 
would like more feedback and suggestions from the surveyors. 
Survey requirements do not include review of PASRRs forms or process 
The current State Operations Manual sampling criteria requires that surveyors sample 
only one resident with mental illness per nursing facility.32  For the most part, 
surveyors use a geriatric model when conducting a survey and reviewing their sample 
files.  In case study States, surveyors report that they focus on traditional issues and 
services offered to nursing facility residents such as dehydration, medication reduction, 
and group social activities.  One State respondent believes that surveyor reviews 
mainly look at what medications rather than mental health services are provided to 
residents.  In one State, surveyors reported that it was no longer a [Federal] mandate 
to include any individuals with mental illness in their sample. 
Surveyors may be unaware of recent regulations in the State Operations Manual citing 
the requirement to look at PASRRs if available during the pre-site stage of their 
survey.  According to the State Operations Manual, the PASRR is one of eight 
information sources used to focus the survey for Offsite Survey Preparation.  If the 
PASRRs are available, surveyors are directed to evaluate if there are any potential 
concerns and note names of residents for possible inclusion in the sample." 
32  State Operations Manual, Appendix P Survey Protocol for Long-term care. 
19 
PASRR Implementation and Oversight  OEI-05-99-00700  Surveyors report that there is not a survey category in which to cite that an individual 
with mental illness is inappropriately placed in a nursing facility.  Due to already 
stringent OBRA 1987 survey requirements, surveyors from one State reported they 
would need to have a larger sample size if they were going to purposively sample 
younger residents with mental illness.  One State surveyor reported that she can cite 
the facility only for not providing appropriate mental health services.  She cannot cite 
an inappropriate placement. 
Surveyors do not focus on whether a residents care plan incorporates Level II 
PASRR recommendations for mental health services.  Four of the five surveyor teams 
we interviewed were aware of the Level I PASRR forms and the Level II 
determination letters, but did not routinely review them.  One State surveyor team, in a 
State with one of the highest national placement rates of individuals with mental illness 
in nursing facilities, was unfamiliar with the PASRR process.  These surveyors 
reported that they had been handed a folder labeled PASRR by their supervisor 
before their current site visit, but had not reviewed the included information.  They did 
not modify their review procedures despite being at a facility where every resident had 
a mental illness diagnosis and most were under age 55. 
Three of the four survey teams we interviewed mentioned issues related to the PASRR 
as part of their review including: whether individuals were identified as needing 
specialized services; that they could not locate some of the forms or that they were 
incomplete; and that they differed by county.  One State surveyor reported that 
surveyors from their State do not review the PASRR because they assume that the 
PASRR has already been properly completed and is in place.  Surveyors from this 
State further assume without verification, that if a resident has been accepted by the 
facility, then the facility is capable of providing the needed mental health care. 
States do not ensure that PASRR Level II reassessments are appropriately 
triggered 
States do not have a mechanism to ensure that Level II PASRR reassessments are 
appropriately triggered.  Nursing facilities are required to promptly notify the State 
mental health authority if there is a significant change in the residents physical or 
mental condition.33  Respondents from four case study States question a nursing 
facilitys incentive to notify the State mental health authority about the change in 
status of a resident if, for example, their case mix is determined on a 6 month basis or 
if they rely on the resident remaining in the facility as a valuable income source.  Other 
State respondents believe that nursing facilities have an incentive to report a residents 
change rather than face potential penalties from deficiencies identified through the 
survey process or face treatment difficulties of a resident whose behavior has become 
difficult to manage.  Many nursing facilities, surveyors and State agencies 
33  The Nursing Home Facility Resident Act, P.L. 104-315 
20 
PASRR Implementation and Oversight  OEI-05-99-00700  indicate that the definition of significant change for nursing facility residents with 
mental illness and the criteria to trigger a Level II PASRR reassessment are unclear. 
Four case study States and one survey State expressed frustration that there has been 
minimal guidance or directive from HCFA on what defines significant change and what 
should trigger a Level II PASRR reassessment since the repeal of the annual review 
requirement.  The HCFA has not provided a specific definition for significant change 
for PASRR purposes, nor do they believe that it is necessary. 
In 1996, HCFA offered clarification to the States concerning the need for a resident 
reassessment when there is a significant change in a residents physical or mental 
condition, but left States the flexibility to establish their own criteria.34  In earlier 
guidance, HCFA indicated that States may establish criteria that will determine 
whether a residents significant change could effect the determination of appropriate 
nursing facility placement and/or the residents need for specialized services, and thus 
trigger a Level II PASRR reassessment.35  As a follow-up, HCFA indicated that when 
the nursing facility resident assessment (the MDS) indicates that a more immediate 
annual resident review is warranted, the facility should alert the SMHA.  The HCFA 
further directed the States to consider that  judgment is... required in determining 
when reviews [reassessments] are appropriate and when a more thorough annual 
resident review is required.36 
State mental health authorities do not accept oversight responsibility 
Survey respondents from 22 States report that Level II PASRR responsibility rests 
with the State mental health authorities.  However, most SMHAs in our case study 
States do not consider it their responsibility to monitor or provide treatment for 
residents of nursing facilities with mental illness.  Despite having primary responsibility 
for providing treatment and long term care options to individuals with mental illness, 
most SMHA decline responsibility for residents with mental illness in nursing facilities 
and instead rely on facilities to provide needed services without their oversight.  One 
SMHA reported that Federal regulations do not connect nursing facilities to State 
mental health authorities.  Subsequently, this SMHA is not involved in ensuring that a 
Level II PASRR reassessment is completed when necessary.  Some of the SMHA 
representatives that we interviewed were not able to answer basic process questions 
regarding the PASRR process. 
34	 December 23, 1996 HCFA, Office of Long-Term Care Services, Medicaid Bureau Memorandum 
to All Associate Division of Medicaid Regional Administrators 
35  March 23, 1990 Federal register proposed rule. 
36	 December 23, 1996 HCFA, Office of Long-Term Care Services, Medicaid Bureau Memorandum 
to All Associate Division of Medicaid Regional Administrators 
21 
PASRR Implementation and Oversight  OEI-05-99-00700  A few States violate Federal regulations by inappropriately delegating the authority 
both to conduct the Level II PASRR evaluations and make determinations regarding 
appropriate placement and specialized services.  Responsibility for the Level II 
PASRR mental health evaluation and determinations rests with the State Medicaid 
agency who most frequently delegate this responsibility to the SMHA.37 
Determinations must be made by the SMHA based on an independent evaluation 
performed by an entity other than the State mental health authority.  Three States 
responding to our survey report that nursing facilities complete the Level II PASRR 
evaluation.  This directly violates regulations that prohibit the State from delegating 
this responsibility to a nursing facility or any entity that has a direct or indirect 
affiliation with a nursing facility.38  In addition, in one of the five States we visited, the 
Level II placement determination is made by the State Agency on Aging, without the 
State mental health authoritys approval. 
Two case study States report that the county mental health authority has responsibility 
for ensuring individuals are getting services either from the nursing facility or through 
county-contracted services.  States with county-run mental health systems, report 
there is little oversight over the activities of the counties.  In one case study State, 
counties can even design their own forms.  Two States indicated that the county 
mental health programs review PASRRs and pull a sample of charts.  However, the 
State Agencies do not monitor the countys activities and many nursing facilities were 
not aware of the review process. 
One State Medicaid agency reported that they should be asking counties about 
numbers of referrals.  In addition, they stated that they did not know about the 
adequacy of services being provided, because they dont get enough feedback.  The 
[PASRR] system is designed to prevent admission, [not to inform the State if residents 
are] getting psychological therapy.  Surveyors report seeing Statewide variation in 
the involvement of community mental health centers in nursing facilities.  Nursing 
facilities report that, although it rarely occurs, some counties provide mental health 
services to residents who were county clients before nursing facility admission. 
HCFA does not monitor the PASRR process 
The HCFA regional offices and headquarters do not monitor the PASRR process or 
provide guidance to the States.  All of the HCFA regional office PASRR contacts 
reported that they have limited knowledge of current State PASRR processes. 
Despite an annual report requirement, HCFA regional offices report that they are not 
collecting an annual report from States.  The HCFA headquarters reported that it 
never made the required report to Congress.  In the statute, State reporting 
requirements are minimal and focus on discharge of this population from nursing 
37  42 C.F.R. 483.112 (1999). 
38  42 C.F.R. 483.106(d)(1)(iii) (1999). 
22 
PASRR Implementation and Oversight  OEI-05-99-00700  facilities.  There is no standard report form and HCFA respondents indicated that 
when the reports were being collected, in the early 1990s, the little information they 
did receive was not particularly useful. 
Some regional office staff report that monitoring visits that were made during the early 
1990's enabled them to better assist the States with the provision of technical 
assistance.  Recent agency reorganization, downsizing and shifting priorities eliminated 
the regional office monitoring component.  One regional office provided training for 
surveyors specifically covering techniques for reviewing the PASRR process.  Both 
surveyor agency staff and on-site surveyors from a case study State in this region 
report this training was beneficial. 
State Long-Term Care Ombudsmen primarily focus on geriatric residents 
State Long-Term Care Ombudsmen report that they primarily focus their attention on 
the needs of geriatric nursing facility residents.  In our case study States, LTC 
Ombudsmen report that they have not received a sufficient number of complaints to 
warrant their concern for younger individuals, ages 22 to 64, with mental illness or 
geriatric residents regarding issues related to this population.  Federal LTC 
Ombudsman reporting system complaint categories include PASRR, mental health 
services and three other general categories which the Federal Agency on Aging 
indicated might also pick up problems due to mental health.  However, State LTC 
Ombudsmen indicated that younger individuals with mental illness are not generally a 
population whose concerns they normally address.  Fourteen of 22 State LTC 
Ombudsmen could not report how many complaints they had received either from 
geriatric residents or individuals with mental illness regarding issues related to mental 
illness. 
23 
PASRR Implementation and Oversight  OEI-05-99-00700  R E C O M M E N D A T I O N S  
We based our findings on a purposive sample and have not made a statistical 
projection.  Nonetheless, our findings raise serious concerns that warrant further 
attention.  States make placement decisions and nursing facilities provide care with 
little oversight for younger individuals with mental illness.  State implementation of 
preadmission screening and resident review (PASRR) systems, the primary mechanism 
to ensure appropriate nursing facility placement and address mental health needs, is 
inadequate.  The Federal definition of serious mental illness and the commonly held 
perception that the PASRR is more of an eligibility indicator than an evaluation tool, 
contribute to the ineffectiveness of States to identify an individuals mental health 
status, make necessary mental health assessments and oversee needed mental health 
treatment.  Finally, States definitions of specialized services may limit the opportunity 
for individuals to access mental health services. 
The PASRR process functions with little State or Federal oversight to ensure that 
younger individuals, ages 22 to 64, with mental illness are appropriately screened, 
evaluated and placed in nursing facilities.  States do not systematically monitor the 
PASRR process, instead they rely on surveyors, whose guidelines do not include the 
review of PASRR forms or processes, to assess the issues facing this population. 
Improve States capacity to identify individuals with mental illness and 
determine appropriate facility placement 
To improve the effectiveness of the PASRR process to identify individuals with mental 
illness and determine appropriate facility placement, we recommend that HCFA: 
C  ensure completion of the Level I PASRR screens and that they completed prior 
to nursing facility admission; 
C  develop guidance under which the Level I PASRR screen should be completed 
by a mental health professional; 
C	 require that Level II PASRR be triggered if at least one indicator of serious 
mental illness is identified, per a standard definition provided by SAMHSA 
(through the Center for Mental Health Services).  In particular, HCFA should 
eliminate the Federal requirements that an individual has been hospitalized in 
the past 2 years, and that they have had a functional limitation in the past 3 to 6 
months due to their mental illness; 
C	 outline and enforce State requirements for Level II PASRR evaluation 
summary reports that are to be shared with the admitting nursing facility; and 
C	 provide technical assistance to help States develop a formal mechanism to 
share the results of PASRR screens with the survey agency.  This will facilitate 
surveyors ability to evaluate whether there are any potential 
24 
PASRR Implementation and Oversight  OEI-05-99-00700  concerns and note names of residents for possible inclusion in their sample of 
nursing facility residents. 
Improve oversight of the PASRR process and access to mental health 
treatment 
To improve the oversight of and access to mental health treatment, we recommend 
that HCFA: 
C  provide regional PASRR training to surveyors; 
C  require surveyors to ensure that PASRR Level I identification screen is 
completed for all nursing facility residents; 
C	 require nursing facilities to use the Level II PASRR assessment and 
recommendations in care planning and provide findings to the State Medicaid 
agency.  The State Medicaid agency should ensure that technical assistance is 
provided to nursing homes or designate the State mental authority to provide 
such technical assistance; 
C	 provide States with technical assistance to develop additional mechanism(s) to 
monitor the PASRR process both at admission and throughout a residents stay 
at a nursing facility (see Appendix for example); 
C	 add survey regulations that require State surveyors to ensure care plan 
compliance with all Level II PASRR recommendations; and 
C	 convene regular stakeholder meetings with State Agencies, regional offices, 
Ombudsmen, and Protection and Advocacy agencies, to discuss the 
effectiveness of the PASRR process. 
Ensure that placement of an individual with mental illness in a nursing facility 
is not a means of avoiding responsibility for the provision of specialized 
mental health services 
To ensure that placement of an individual with mental illness in a nursing facility is not 
a means of avoiding responsibility for provision of specialized services, HCFA should: 
C	 define specialized services, with mental health provider input, that is to be 
provided by the State and made available to individuals with serious mental 
illness residing in nursing facilities. 
Improve ability of nursing facilities to identify significant change and to make 
appropriate referrals 
To improve nursing facilities ability to identify and appropriately refer nursing facility 
residents whose mental health condition changes, HCFA should: 
C	 clarify the definition of significant change and implement a mechanism to 
ensure a Level II PASRR is completed; 
25 
PASRR Implementation and Oversight  OEI-05-99-00700  C  modify the MDS form to identify a significant change in mental health status, 
triggering a Level II PASRR reassessment; 
C  update the State Medicaid Manual to provide related guidance on triggering a 
Level II PASRR reassessment; and 
C  develop a Resident Assessment Protocol (RAP) for mental health status. 
Improve Federal monitoring and oversight 
To improve Federal monitoring and oversight, we recommend that HCFA: 
C  clarify the role and responsibilities of regional HCFA PASRR contacts; 
C	 require the annual PASRR report to include data regarding the number of 
Level I and II PASRRs completed and the placement and treatment results by 
age; 
C	 standardize the annual report and ensure that it is completed and monitored 
annually by the HCFA regional office; and 
C	 reconsider adding a PASRR compliance and enforcement component to State 
nursing facility report cards for inclusion on HCFAs Nursing Home Compare 
web site if further study indicates the need to report this information to the 
public. 
To improve implementation and oversight of the PASRR process, HCFA should 
specify which unit(s) within HCFA have responsibility for ensuring that: 
C  States are appropriately implementing PASRR; 
C	 all appropriate PASRR paperwork and, consequently the justification for 
nursing facility placement, specialized services and other mental health 
treatment if applicable, is properly completed; and 
C	 nursing facilities and States comply with PASRR determinations and 
recommendations for mental health services. 
Improve Level II PASRR process and ensure compliance with Olmstead 
Decision 
To improve State Medicaid agencies ability to ensure compliance with the Olmstead 
Decision HCFA should: 
C	 require that State Medicaid agencies collaborate with State mental health 
authorities to identify and maintain a list of alternative community based 
treatments, including the Medicaid and Community-Based Waiver, and to track 
the level of need and availability of such resources. 
To improve State mental health authorities ability to make appropriate Level II 
PASRR placement, specialized service and mental health treatment determinations, 
SAMHSA should within its statutory authority over SMHAs: 
26 
PASRR Implementation and Oversight  OEI-05-99-00700  C  provide guidance to SMHAs including model practices and standards on 
appropriate treatment, specialized and other mental health services; 
C  emphasize the importance of supporting this population to the Protection and 
Advocacy agencies; and 
C  periodically review SMHA Level II determinations and provide technical 
assistance to SMHAs. 
To improve nursing facilities ability to identify and appropriately refer nursing facility 
residents whose mental health conditions change, SAMHSA should: 
C	 provide guidance to SMHAs regarding identifying alternative treatment 
options for individuals being considered for placement in nursing facilities. 
Clarify Agencies roles and responsibilities within the Department in 
overseeing the PASRR process 
To improve implementation and oversight of the PASRR process, the Department 
should determine and delineate HCFA and SAMHSAs responsibilities in overseeing 
PASRR determination. 
27 
PASRR Implementation and Oversight  OEI-05-99-00700  A G E N C Y   C O M M E N T S  
We received comments from the Health Care Financing Administration and the 
Substance Abuse and Mental Health Services Administration.  The HCFA and 
SAMHSA concur with the majority of our recommendations.  We feel that HCFA and 
SAMHSAs commitment to the effectiveness of the PASRR process is of particular 
importance in light of the Olmstead Decision.  Where appropriate we changed the 
report to reflect both HCFA and SAMHSAs comments.  The full comments received 
from HCFA and SAMHSA are contained in Appendix B. 
The HCFA believes our recommendations will help [them] make sound policy 
decisions about how best to protect the interests of younger Medicaid beneficiaries 
who have a serious mental illness...and reside in nursing facilities.  In addition, HCFA 
will attempt to augment [our] recommendations with companion efforts that would 
expand community alternatives and will coordinate planning for PASRR improvements 
with those community service improvement efforts. 
We would like to commend HCFA on their assistance in conducting this study and for 
providing us with substantive and insightful comments. 
The HCFA concurred in full with 24 of the 30 ways to achieve our recommendations. 
The agency proposes an alternative solution or will take under further consideration 
the following 6 recommendations with which they do not concur: 
The HCFA does not concur with our recommendation to develop guidance under 
which the Level I PASRR screen should be completed by a mental health professional. 
The HCFA does not believe it is necessary for a mental health professional to conduct 
the Level I screen that identifies persons who are suspected of having a mental illness. 
We believe that at present, there is little evidence that these screens are being 
completed by individuals who are trained to diagnose possible mental illness and 
subsequently trigger the necessary Level II PASRR mental health evaluation.  We have 
kept the recommendation as previously stated. 
The HCFA does not concur in whole with our recommendation that a Level II PASRR 
be triggered if at least one indicator of serious mental illness is identified.  They agree 
with our recommendation to eliminate the requirement that a person has been 
hospitalized in the past 2 years.  However, they believe that a person who does not 
have a functional limitation should be permitted access to a nursing facility if they meet 
that level of care criteria. While we agree that individuals with a serious mental illness 
diagnosis who do not have a functional limitation may be appropriate for nursing 
facility residency, we still believe that based on their serious mental illness diagnosis 
these individuals should still have a Level II PASRR evaluation to determine needed 
mental health services. 
28 
PASRR Implementation and Oversight  OEI-05-99-00700  The HCFA proposes an alternative to our recommendation to require that States share 
the Level II PASRR mental health evaluation with the admitting nursing facility.  The 
HCFA believes it would be an unnecessary burden to require such documentation be 
copied and sent for every person evaluated.  Instead, they propose to take action 
through a State Medicaid Director letter and subsequent changes in the State Medicaid 
Manual.  We support HCFAs proposed actions and agree that if the current 
regulations requiring a detailed summary report are enforced, as outlined in HCFAs 
comments, then nursing facilities should have sufficient information regarding the 
outcome of the Level II PASRR mental health evaluation. 
The HCFA does not concur with our recommendation to define specialized services, 
with mental health provider input, to be provided by the State and made available to 
individuals with serious mental illness in nursing facilities. They believe that States 
should define specialized services as 24-hour inpatient psychiatric treatment in order to 
prevent individuals needing intensive mental health services from residing in nursing 
facilities.  While we agree that intensive mental health services are difficult to provide 
in a nursing facility, our recommendation speaks to those individuals with serious 
mental illness who are already residents of a nursing facility or who require nursing 
facility care because of a comorbid physical condition.  We believe that 
appropriateness of nursing facility placement does not preclude an individuals need 
for intensive mental health services in that setting.  Therefore, we are keeping the 
recommendation as written. 
The HCFA does not concur with our recommendation to add a PASRR compliance 
and enforcement component to State nursing facility report cards for inclusion on 
HCFAs Nursing Home Compare web site.  We support HCFA in their willingness to 
reconsider adding this component if further study indicates the need to report this 
information to the public. 
The HCFA would like to further review our recommendations pertaining to the MDS 
and significant change requirements for PASRR.  Specifically they would like to 
consider further our recommendations to: 1) clarify the definition of significant change 
and implement a mechanism to ensure a Level II PASRR is completed; 2) modify the 
MDS form to identify change in mental health status, triggering a Level II PASRR 
reassessment; and 3) develop a Resident Assessment Protocol (RAP) for mental health 
status.  We request that at the time HCFA submits the action plan, they provide us 
with an updated assessment of these items. 
Our recommendation to improve the Level II process and ensure compliance with the 
Olmstead Decision directs specific recommendations to SAMHSA.  The SAMHSA 
agrees in full with 5 of the 6 specific recommendations that apply to them.  In addition, 
SAMHSA concurs with our Departmental recommendation to determine and delineate 
HCFA and SAMHSAs responsibilities in overseeing PASRR determinations. 
29 
PASRR Implementation and Oversight  OEI-05-99-00700  We would like to thank SAMHSA for their assistance in conducting this study and for 
providing us with supportive comments. 
The SAMHSA agrees that there are problems with Level I and II PASRR 
documentation and implementation and is committed to insuring a common 
understanding of the PASRR requirements, goals and objectives.  The SAMHSA is 
working together with HCFA in addressing the Olmstead Decision and other key areas 
regarding behavioral health services.  The SAMHSA looks forward to utilizing their 
partnership to address how SAMHSA can support HCFA in implementing the PASRR 
process. 
The SAMHSA concurs with our specific recommendations for their role in improving 
the ability of State mental health authorities (SMHAs) to make appropriate Level II 
PASRR placement, specialized service and mental health treatment decisions.  They 
further agree that they should provide guidance to SMHAs to identify alternative 
treatment options for individuals being considered for placement in nursing facilities. 
The SAMHSA does not concur with our recommendation that they annually review 
SMHA Level II determinations.  They believe this recommendation overstates their 
statutory responsibility for the PASRR process as the regulations do not require such a 
review.  We agree that SAMHSA does not have the authority to make administratively 
binding assessments of the acceptability of these determinations, nor the resources to 
conduct annual reviews of each.  We have therefore, changed the recommendations to 
reflect their broader mandate to provide guidance and support to SMHAs in providing 
care to all individuals with mental illness in any treatment setting. 
We feel that SAMHSAs commitment to the effectiveness of the PASRR process is of 
particular importance in light of the recent Olmstead Decision.  We believe SAMHSA 
has a responsibility to ensure the appropriate care for individuals with mental illness in 
any treatment setting and should use its expertise to support the Level II PASRR 
process.  In this vein, we believe that periodic reviews of some or all such 
determinations could serve as a useful basis for developing appropriate guidance. 
We support SAMHSAs proposed actions for meeting our recommendations. 
. 
30 
PASRR Implementation and Oversight  OEI-05-99-00700  APPENDIX A 
One State has a special oversight branch to monitor the

PASRR process

One case study State has a special oversight branch to monitor the PASRR process. 
In Pennsylvania, the Utilization Management Review (UMR) Section, during quarterly 
onsite visits, verifies that Level I PASRRs exist for all new admissions and that they 
are completed correctly.  During their facility visits, UMR representatives monitor the 
Level I PASRRs, Minimum Data Set (MDS) and the determination letters from the 
Mental Health, Mental Retardation or Social Services Program offices.  This ensures 
that residents require nursing facility care and the nursing facility can provide any 
specialized services that are required.  The UMR also monitors the Level II 
assessments in conjunction with contracted mental health specialists who are brought 
in on a case by case basis.  In addition, the UMR representatives do an in-depth chart 
review to ensure documentation is present to support MDS entries.  Review of the 
MDS could result in a Level II reassessment. 
For further information please contact: 
The Pennsylvania Department of Health 
Division of Nursing Care Facilities 
717-787-1816 
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