Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
YOUNGER NURSING FACILITY 
RESIDENTS WITH MENTAL ILLNESS: 
An Unidentified Population 
JUNE GIBBS BROWN 
Inspector General 
JANUARY 2001 
OEI-05-99-00701  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 determine the extent to which younger individuals with mental illness 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 companion to this report, Younger Nursing Home 
Residents with Mental Illness: Pre-Admission Screening and Resident Review 
Implementation and Oversight (OEI 05-99-00700) examines the admission and mental 
health screenings of Medicaid beneficiaries, ages 22-64, who have a serious mental illness 
and reside in nursing facilities.  In that study we found that State implementation of Pre-
Admission Screening and Resident Review (PASRR) systems, the primary mechanism by 
which individuals with mental illness in nursing facilities are monitored, is inadequate to 
identify whether younger individuals with mental illness are appropriately screened, 
evaluated and placed in nursing facilities. 
This report attempts to ascertain the extent to which younger individuals with mental 
illness reside in nursing facilities.  In addition, we wanted to identify the amount of 
Medicaid funds spent to care for this population.  The national average for percentage of 
individuals in nursing facilities being treated for mental illness is unknown.  A recent 
review of the National Nursing Home Surveys estimates that in 1995, there were 
approximately 12,000 nursing facility residents under age 65 with a primary mental illness 
diagnosis.  We believe this figure may not accurately reflect the number of younger 
nursing facility residents with serious mental illness. 
The 1999 Olmstead v. L.C. Supreme Court decision asserted that States are obliged to 
administer their services, programs, and activities to individuals with disabilities in the 
most integrated setting appropriate to their needs.  Olmstead challenges States to 
prevent and correct inappropriate institutionalization and to review intake and admissions 
procedures to assure that individuals are served in the most integrated setting appropriate. 
Federal Data Sources 
The Health Care Financing Administrations (HCFA) Medicaid Statistical Information 
System (MSIS) collects claims and eligibility data for medical services reimbursed with 
Title XIX funds.  Its purpose is to collect, manage, analyze and disseminate information 
i 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  on eligibles, recipients, utilization and payment for services covered by State Medicaid 
programs. 
The HCFA Minimum Data Set (MDS) collects resident assessment information to aid in 
the survey and certification of Medicare/Medicaid long-term care facilities and to study the 
effectiveness and quality of care given in those facilities.  The MDS is also intended to 
support regulatory, reimbursement, policy, and research functions. 
To identify the number of nursing facility residents between the ages of 22 and 64 with a 
severe mental illness, we examined MSIS and MDS data and conducted a 51 State survey. 
FINDINGS 
We cannot conclusively determine the number of younger individuals with mental 
illness that reside in nursing facilities 
After collecting data from MSIS, MDS and our 51 State survey, we cannot conclusively 
determine the number of younger individuals with mental illness that reside in nursing 
facilities.  In attempting to identify this population, we encountered data inconsistencies 
including: the dates for which the most recent data was available; the ability to capture 
primary and/or secondary diagnosis; the scope of the data collected; and differing provider 
identification numbers for individual nursing facilities. 
The HCFA data sources do not provide comparable information.  Federal MSIS data for 
39 States indicates that 5,745 Medicaid beneficiaries with a primary diagnosis of mental 
illness between the ages of 22 and 64 reside in nursing facilities.  Federal MDS data 
indicates that 17,919 younger Medicaid beneficiaries with any diagnosis of mental illness 
reside in nursing facilities in these same States. 
Further, HCFA data and our 51 State survey yield inconsistent results.  For example, the 
MDS data indicates that the number of younger nursing facility residents with mental 
illness represents, on average, 1.6 percent of States nursing facility populations.  Our 
State survey indicates that for 20 States reporting this information, these residents 
represent, on average, 20 percent of their nursing facility populations. 
The MSIS claims data cannot be validated.  Only 10 of the 19 nursing facilities we visited 
were identified as having submitted at least one claim for younger nursing facility residents 
with mental illness.  None of the 187 individuals whose case files we reviewed were 
identified in MSIS as having a Medicaid claim for nursing facility services, despite listing 
Medicaid as their payer source. 
ii 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  MSIS cannot be matched with MDS to yield reliable results for research and analysis and 
thus we could not discern pertinent facility level information.  We were able to identify 
and match in MDS only 39 percent of nursing facilities that MSIS identified as having at 
least one younger individual with mental illness.  For 10 States, none of the nursing 
facilities matched between MSIS and MDS. 
Medicaid expenditures cannot be validated 
In order to calculate States Medicaid expenditures for younger nursing facility residents 
with mental illness, we had to rely on MSIS and State data.  However, we believe that 
MSIS is an inaccurate representation and underestimation of Medicaid expenditures for 
this population.  Medicaid expenditure data from MSIS is not validated either by our 51 
State survey or our case file review.  Eight States reported that they spent $30.9 million 
total in Federal Fiscal Year 1998 while MSIS indicated that for these eight States, total 
Medicaid expenditures was $15.8 million.  Our survey data indicates that, on average, 
States spend $12.3 million per year on younger nursing facility residents with mental 
illness, while MSIS indicates that States, on average, spend $4.9 million per year. 
States do not know where younger individuals with mental illness are receiving 
long-term care 
Many State mental health authorities (SMHA) responding to our survey reported difficulty 
submitting information regarding the number of individuals with mental illness between the 
ages of 22 and 64 in various types of long-term care facilities.  In addition, SMHAs had 
difficulty providing us with expenditure information.  Of the 43 SMHAs that responded to 
our survey, only 13 were able to provide us with the complete expenditure information we 
requested. 
State Medicaid agencies also had difficulty reporting expenditure information for all types 
of long-term care facilities and specifically for nursing facilities.  Only 15 of 36 State 
Medicaid agencies were able to report Medicaid expenditures for younger nursing facility 
residents with a primary or secondary diagnosis of mental illness.  Only nine States were 
able to provide us with complete expenditure figures for younger individuals with a 
primary diagnosis of mental illness. 
OTHER CONSIDERATIONS 
Our inspection focuses on younger nursing facility residents with mental illness.  However, 
the issues we encountered regarding the validity and reliability of the data raise significant 
concerns about the broader use of both MDS and MSIS data in making and evaluating 
health care policy.  Our unsuccessful attempt to identify this population is indicative of a 
larger problem with these Federal data sources.  This examination 
iii 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  questions the use of Federal data sources to accurately yield important demographic, 
utilization, and expenditure information upon which to base policy.  Without reliable 
information that enables us to identify populations of individuals requiring particular types 
of services, we cannot assess appropriateness, access and quality of care, nor determine 
the effectiveness of Federal Medicaid and nursing facility policy. 
RECOMMENDATIONS 
Recent attention on individuals with mental illness, particularly those in institutional 
settings, increases the need for the Health Care Financing Administration to ensure that 
Federal data systems can respond to both the Administrations and the publics inquiry 
into the status of younger nursing facility residents with serious mental illness.  The HCFA 
should be able to use both the MSIS, MDS and other related Federal data systems to 
monitor the extent to which nursing facility residents have mental illness and, in turn, 
receive needed mental health treatment. 
In order to improve the ability of HCFA and States to produce accurate nursing 
facility information and to increase the ability to monitor care and treatment of 
Medicaid nursing facility residents with mental illness, we recommend that HCFA: 
C  assign unique provider numbers for long-term care facilities that submit 
information to Federal data sources; 
C  provide training and clearer coding instructions to improve the ability of nursing 
home staff and of the MDS instrument to capture mental illness diagnoses; 
C  make MDS and MSIS data available in a timely manner; 
C  require States to report information by age; and 
C  require States to report information by diagnosis. 
In response to the Olmstead Supreme Court Decision that requires individuals to 
be placed in the most integrated and least restrictive setting appropriate, we 
recommend that HCFA: 
C	 facilitate the availability of improved MSIS and MDS data to assist States in 
complying with HCFAs directive to identify residents and periodically review the 
services of all residents in Medicaid-funded institutional settings; and 
CC	 encourage States to use MSIS and MDS data systems to help demonstrate that the 
State has a comprehensive, effectively working plan for placing qualified persons 
with disabilities in the most integrated setting appropriate. 
iv 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  AGENCY COMMENTS 
We received comments from the Health Care Financing Administration (HCFA) and the 
Assistant Secretary for Planning and Evaluation (ASPE).  The HCFA concurs with six of 
our seven recommendations.  The ASPE provided general comments.  Where appropriate 
we changed the report to reflect their comments.  The full HCFA and ASPE comments are 
contained in Appendix A.  We would like to thank HCFA and ASPE for their assistance in 
conducting this study and for providing us with comments. 
The HCFA believes that mental health is central to the overall well being of all our 
beneficiaries, including younger nursing facility residents and that monitoring these 
residents care and treatment and maintaining accurate nursing facility information is 
essential to their well-being. 
The one recommendation that HCFA does not concur with is amending the MDS to 
distinguish between primary, secondary and tertiary diagnoses.  The HCFA proposes an 
alternative to our recommendation that would provide training and clearer coding 
instructions to improve the ability of nursing home staff and of the MDS instrument to 
capture Mental Illness diagnoses.  We agree with HCFA that providing training and 
improved coding instructions is in accordance with the intent of our recommendation and 
have changed our recommendation accordingly. 
The HCFA expressed concern that the difficulty we experience in finding mental health 
information may be due to the timing of the study.  We want to clarify that our 
methodology did not rely on information captured exclusively by an initial MDS 
assessment.  Instead, both our reviews of MDS initial and quarterly assessments of 
individual medical files and of the MDS database universe for a six month period would 
have enabled us to capture mental health diagnoses. 
The HCFA reports that they have concerns that our inspection does not accurately depict 
their role in determining State compliance with the Olmstead Decision.  What we wanted 
to emphasize was that improved MSIS and MDS data systems can help facilitate States 
compliance with the Olmstead Decision as part of a multi-faceted approach.  We agree 
that the improvements HCFA has committed to making should prove to be beneficial. 
The ASPE expressed concern that the focus of our report, younger individuals with 
serious mental illness, comprise less than 3% of nursing home residents according to the 
1996 Medical Expenditure Panel Survey (MEPS).  We believe that there is not a reliable 
source of information to determine this population.  More importantly, we continue to 
believe that regardless of the overall size of the national population of younger nursing 
facility residents with serious mental illness, their presence and care in nursing facilities 
warrants HCFAs specialized attention. 
v 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  T A B L E   O F   C O N T E N T S  
PAGE 
EXECUTIVE SUMMARY

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

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Information inadequate to identify younger nursing facility residents with mental illness . . . .  9

Medicaid expenditure data cannot be validated  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

States do not know where younger individuals with mental illness receive long-term care  . 14

OTHER CONSIDERATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

AGENCY COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

APPENDIX

A. Agency Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

vi 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  I N T R O D U C T I O N  
PURPOSE 
To determine the extent to which younger individuals with mental illness 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 companion to this report, Younger Nursing Home 
Residents with Mental Illness: Pre-Admission Screening and Resident Review 
Implementation and Oversight (OEI 05-99-00700) examines the admission and mental 
health screenings of Medicaid beneficiaries, ages 22-64, who have a serious mental illness 
and reside in nursing facilities.  In that study we found that State implementation of Pre-
Admission Screening and Resident Review (PASRR) systems, the primary mechanism by 
which individuals with mental illness in nursing facilities are monitored, is inadequate to 
identify whether individuals are appropriately placed and their mental health needs are 
addressed. 
De-Institutionalization 
Between 1955 and 1985, many large State mental institutions closed, reducing by 80 
percent States institutionalized population of individuals with mental illness.  De-
institutionalization changed the health care delivery system for individuals with mental 
illness and challenged States and communities to identify alternative treatment options for 
individuals with mental illness.  The national focus shifted to rehabilitating individuals with 
mental illness in community-based programs, tailored to a wide variety of needs. 
However, in many communities, de-institutionalization accelerated without the creation of 
local programs commensurate with the population requiring placement.  According to the 
1999 Mental Health: A Report of the Surgeon General, community care and de-
institutionalization programs were implemented without evidence of effectiveness and 
needed services are not always available. 
Individuals with Mental Illness in Nursing Facilities 
The Pre-Admission Screening and Resident Review (PASRR) mandated by the Omnibus 
Budget Reconciliation Act of 1987 targets nursing facility applicants and residents with a 
1 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  probable mental illness diagnosis for mandatory psychiatric evaluation.  This process was 
designed to divert psychiatric patients from nursing facilities and prevent the inappropriate 
admission and retention of people with mental disabilities, thereby eliminating the use of 
nursing homes for individuals with chronic mental illness.  In addition, PASRR was 
intended to identify residents in need of more appropriate acute treatment in hospitals or 
long-term treatment in community based settings,1 and to improve the accountability of 
nursing facilities for the appropriate management of psychiatric disorders in their 
residents.2  We examined the PASRR and the safeguards that monitor the admission and 
mental health treatment of younger Medicaid beneficiaries who have a serious mental 
illness and reside in nursing facilities in a companion report.3 
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.4  The availability of necessary mental health treatment 
for nursing home residents with mental illness has long been a concern.  A 1986 Institute 
of Medicine report suggests that patients with severe mental illness de-institutionalized 
from State mental hospitals were being discharged to nursing homes that could not 
provide the specialized services they needed.5 
In addition, 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 younger adults with mental illness who 
reside in nursing facilities.  There is also concern regarding the lack of mental health 
training and experience of typical nursing facility staff. 
Nursing facility residents with serious and persistent mental illness 
The national average for percentage of individuals in nursing facilities being treated for 
mental illness is unknown.  A recent review of the National Nursing Home Survey 
(NNHS) indicates that nationally, in 1995, there were 70,000 residents in nursing 
1  Surgeon General Report 1999 
2  Journal American Geriatric Society 45:1173-1181, 1997. 
3	 Younger Nursing Home Residents with Mental Illness: Pre-Admission Screening and Resident 
Review (OEI-05-99-00700) 
4  Psychiatric Services 51:354-358, March 2000. American Psychiatric Association 
5  Psychiatric Services, February 1998, Vol 49, No. 3, p. 229-233. 
2 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  facilities with a primary mental illness diagnosis.6  The review estimates that there are 
between 8,000 to more than one million residents of nursing facilities with a mental illness, 
including individuals with dementias, depression and schizophrenia -- with and without 
comorbidities.  The report emphasizes that further subclassification is needed to produce a 
better estimate since the clinical and social policies to deal with mental illness, with and 
without physical comorbidity, are quite different.  The NNHS review estimates that there 
are approximately 12,000 nursing facility residents with severe mental illness under age 
65. 7  We believe this figure may underestimate the number of younger nursing facility 
residents with serious mental illness. 
The Olmstead Decision 
The 1999 Olmstead v. L. C. Supreme Court decision asserted that continued 
institutionalization may violate the rights of an individual with mental illness or mental 
retardation under Title II of the Americans with Disabilities Act.  The Supreme Court 
interpreted Title II to oblige States to administer their services, programs, and activities 
in the most integrated setting appropriate to the needs of qualified individuals with 
disabilities.8 
Title II gives an individual the right to live in the most appropriate community integrated 
setting.  States are required to provide community-based services for persons with 
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. 
The Olmstead Decision challenges States to prevent and correct inappropriate 
institutionalization and to review intake and admissions processes to assure that persons 
with disabilities are served in the most integrated setting appropriate.  In response to the 
Olmstead Decision, the Department issued a letter to all governors in January 2000, 
stating that no person should have to live in a nursing home or other institution if he or 
she can live in his or her community.  Moreover, the Department said that unnecessary 
institutionalization of individuals with disabilities is discrimination under the Americans 
with Disabilities Act.9 
Recently, the Health Care Financing Administration (HCFA) sent a letter to State 
Medicaid Directors because Medicaid programs play a critical role in making 
6  Psychiatric Services 51:354-358, March 2000. American Psychiatric Association.

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

8  28 CFR 35.130(d)

9  New York Times, February 13, 2000

3 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  community services available.  The HCFA informed the States that under the Courts 
decision, States are required to provide community-based services for persons with 
disabilities when the placement can be reasonably accommodated, taking into account the 
resources available to the State and the needs of others who are receiving State-supported 
disability services.10  The HCFA has interpreted the ruling to mean that a State waiting list 
for services that moves reasonably well can be considered in compliance with the decision. 
State Medicaid directors are encouraged to periodically review the services of all residents 
in Medicaid-funded institutional settings. 
Surgeon Generals Report 
Additional recent attention to the care of individuals with mental illness in nursing facilities 
was brought about by the Mental Health: A Report of the Surgeon General which states 
that there are major barriers that prevent the delivery of appropriate care to residents of 
nursing facilities who have mental illness.11  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.12  The report also states that Medicaid policies 
discouraged nursing facilities from providing specialized mental health services, and 
Medicaid reimbursements for residents have been too low to provide a strong incentive for 
participation by highly trained mental health providers.13 
Funding and State Responsibility for Treating Individuals with Mental Illness 
Historically, States have primary responsibility for funding the treatment of persons with 
mental illness.  However, during the past two decades, the role of direct State funding of 
mental health care has been reduced, whereas Medicaid funding of mental health care has 
grown in importance.  Despite the Federal Governments current larger financial 
investment in mental health services, Medicaid and Medicare impose limitations on 
coverage for the long-term care of individuals with mental illness.  These coverage 
limitations are intended to reinforce States primary responsibility for this population. 
10  State Medicaid Director Letter January 14, 2000 
11  Mental Health: A Report of the Surgeon General, p. 374 
12	 Lombardo, N.E. Barriers to mental health services for nursing home residents. Washington, DC: 
American Association of Retired Persons, 1994. 
13  Surgeon General Report 199, p. 374. 
4 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  In particular, Medicaid will not pay for services provided in an institution for mental 
disease (IMD) for individuals ages 22 to 64.14  The Social Security Act defines an IMD 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.15  Medicaid will 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.16 
According to the Surgeon Generals report, the estimated number of psychiatric residents 
of all ages treated in nursing facilities has significantly increased, based on the record level 
of Medicaid and Medicare bills for treatment of mental illnesses.  In 1996, treatment costs 
of individuals with mental illness was $66.7 billion.17  Medicaid comprised 19 percent of 
total expenditures on mental health treatment ($13 billion).18  Care for persons with mental 
illness residing in nursing facilities accounted for $4.7 billion (7.1%) of total mental health 
expenditures ($69 billion). 
14	 Social Security Act Section 1905 (h)(I)(C) provides that the 21st birthday is the cut off point for 
benefits unless the beneficiary is under psychiatric care prior to and following their 21st birthday 
in which case they may continue to receive covered care until recovery or their 22nd birthday, 
whichever comes first. For purpose of this report, in order to avoid confusion,, we reviewed 
individuals ages 22 to 54. 
15  Social Security Act Section 1905 (h)(2)(I) 
16  1981 Medicaid ruling 
17  Health Care Financing Administration (HCFA) 1996 estimates of national health expenditures 
18  Mental Health: A Report of the Surgeon General 1999 
5 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  Mental Health Expenditures by Payer 1996 
Percent of total  MH Expenditures  Percent of all health 
MH Expenditures  (in billions)  care expenditures for 
this category 
PRIVATE PAY  47%  $32.43  6% 
Private insurance  27%  $18.63  6% 
Out of pocket  17%  $11.73  6% 
Other private pay  3%  $2.07  5% 
PUBLIC PAY  53%  $37.00  8% 
Medicaid  19%  $13.00  9% 
State/Local  18%  $12.42  18% 
Medicare  14%  $10.00  5% 
Other Federal (VA, DoD,  2%  $1.38  3% 
SAMHSA Block Grants) 
Source: Mental Health: A Report of the Surgeon General 
Federal Budget: 
Substance Abuse and Mental Health Services Administration
 $2.5 billion (FY1999) 
Center for Mental Health Services
 $0.5 billion (FY1999) [34% 
discretionary, 66% block grants] 
National Institute of Mental Health
 $0.9 million (FY1999) 
Medicaid mental health
 $13.11 billion (1996) 
Medicare mental health
 $9.66 billion (1996) 
Federal Data Sources 
MSIS 
The purpose of the Medicaid Statistical Information System (MSIS) is to collect, 
manage, analyze and disseminate information on eligibles, recipients, utilization and 
payment for services covered by State Medicaid programs.  States provide HCFA with 
quarterly computer files containing specified data elements for: (1) persons covered by 
Medicaid (Eligible files); and, (2) adjudicated claims (Paid Claims files) for medical 
services reimbursed with Title XIX funds.  These data files are furnished quarterly 
according to the Federal Fiscal Year (FY) schedule.  The MSIS is used by HCFA to 
produce Medicaid program characteristics and utilization information for the States.  The 
MSIS data files also provide HCFA with a large-scale database of State eligibles and 
services for other analyses.  Prior to FY 1999, MSIS was a voluntary program. However, 
in accordance with the Balanced Budget Act of 1997, all claims processed on or after 
January 1, 1999 must be submitted electronically in the MSIS format. 
6 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  MDS 
The Federal Minimum Data Set (MDS) was established to aid in the administration of the 
survey and certification of Medicare/Medicaid long-term care facilities and to study the 
effectiveness and quality of care given in those facilities.  The MDS was also designed to 
support regulatory, reimbursement, policy, and research functions, and enable regulators 
to provide long-term care facility staff with outcome data for providers internal quality 
improvement activities.  Federal MDS information is collected daily from all nursing 
facilities for all residents, regardless of payer source.  The MDS assessment cycle, which 
captures information on admission, discharge and when a change in health status occurs, is 
collected quarterly. 
SCOPE 
This report evaluates Federal and State data used to identify the mental illness diagnosis of 
nursing facility residents, the numbers of nursing facility residents with a mental illness 
diagnosis, as well as expenditures for this population.  We focused our study on Medicaid 
residents of nursing facilities 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 Alzheimerss disease, dementia or organic brain disorders.  We focused on this 
population because we believe there are fundamental features of care and protection 
unique to younger persons with severe and persistent mental illness residing in the nursing 
facilities. 
We produced a companion report, Younger Nursing Home Residents with Mental 
Illness: Pre-Admission Screening and Resident Review Implementation and Oversight 
(OEI 05-99-00700) which evaluates the safeguards that monitor the admission and mental 
health treatment of Medicaid beneficiaries, ages 22-64 who have a serious mental illness 
and reside in nursing facilities. 
METHODOLOGY 
For the 39 States that submitted Medicaid claims and eligibility information to HCFAs 
Medicaid Statistical Information System during the 4th quarter of 1998, we attempted to 
identify the number of nursing facility residents between the ages of 22 and 64 with a 
primary diagnosis of severe mental illness that had a Medicaid claim. 
We analyzed the Minimum Data Set from January through June 1999, to discover how 
many Medicaid resident assessments for residents ages 22 to 64 indicated a mental illness 
diagnosis. 
7 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  We conducted a national survey of 50 State Mental Health, Medicaid and Medicare/ 
Medicaid Survey agencies and State Long-Term Care (LTC) Ombudsmen and the District 
of Columbia, henceforth referred to as the 51 State Survey, to understand the extent to 
which nursing facilities in each State provide care for persons ages 22 to 64 with a major 
mental illness diagnosis from the International Classification of Diseases, 9th Revision 
(ICD-9) codes 293-301, 311, 312.  We also received State and Medicaid mental health 
treatment expenditures for this population.  In addition, we surveyed States to determine 
in what other types of long-term care settings younger individuals with mental illness 
reside and State expenditures in those settings. 
We received 131 surveys from 50 States: 
C  43 from State mental health authorities,

C  36 from Medicaid agencies,

C  29 from State Medicare/Medicaid Survey agencies, and 

C  23 from the State LTC Ombudsmen. 

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 review.  We selected these States based on: 
C  the high percentage of residents with a 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; 
C  their submission of data to MSIS in FY 199819; and 
C  geographic location. 
In each of the five case study States, we selected four nursing facilities based on the high 
percentage of residents ages 22-64 with a primary or secondary diagnosis of mental illness 
being cared for in that facility, as well as geographic proximity.  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.  We selected the files to review either through a random sample of a 
specific nursing facilitys population of younger individuals with serious mental illness or 
where time permitted,  a review of all residents whose age and diagnosis qualified them to 
be part of our study population. 
We conducted our review in accordance with the Quality Standards for Inspections issued 
by the Presidents Council on Integrity and Efficiency. 
19  All 5 States we visited submitted data to the Federal MSIS as of 1998. 
8 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701 F  I  N  D  I  N  G  S 
We cannot conclusively determine the number of younger 
nursing facility residents with mental illness 
Federal Intent for Data Sources 
According to HCFA, the individual paid claims and eligibility information that is captured 
by the Medicaid Statistical Information System (MSIS) are used for program analysis and 
national research on Medicaid populations and expenditures.  The HCFA indicates that 
current uses of MSIS data include health care research and evaluation activities; program 
utilization and expenditures forecasting; analyses of policy alternatives; responses to 
congressional inquiries; and matches to other health related databases.20 
The Minimum Data Set (MDS), HCFA's database on nursing facility resident assessments 
was established, in part, to study the effectiveness and quality of care given in that setting. 
The MDS was designed to support regulatory, reimbursement, policy, and research 
functions and provide outcome data for providers.21 
Using both the MSIS and MDS, we attempted to ascertain the extent to which younger 
individuals with mental illness reside in nursing facilities.  In addition, we wanted to 
identify the amount of Medicaid funds spent to care for this population.  In order to fill 
any gaps and to validate the data provided by MSIS and MDS, we conducted a 51 State, 4 
agency survey and collected data from our site visit case file review.  Specifically, we 
wanted to identify the following characteristics of States nursing facility populations: 
C  the total number of younger individuals with mental illness residing in nursing 
facilities; 
C  the percent of States nursing facility populations that are younger individuals with 
mental illness; 
C  the total number of States nursing facilities that care for younger individuals with 
mental illness; 
C  the percent of States nursing facilities that care for younger individuals with 
mental illness; and 
20  HCFA Website 
21  HCFA Website 
9 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  C	 in nursing facilities that have at least one younger resident with mental illness, how 
many and what percent (on average) of the nursing facility population are younger 
individuals with mental illness. 
Data inconsistencies 
In using different Federal data sources, we encountered inconsistencies including: 
C  the dates for which the most recent data was available;

C  the manner in which a younger individual with mental illness could be

identified, i.e. matching diagnosis to claims or to resident assessments; 
C  the capability to capture primary and/or secondary diagnosis; 
C  the scope of the data collected, i.e. for how many States data was available; 
and 
C  different provider identification numbers, i.e. the lack of unique provider 
identifiers for a specific facility. 
The table below highlights the differences between the two data sets and the data captured 
in our survey and case file review. 
Data sources & Data captured 
Data  Time Period  States  Manner  Capability of capturing 
Source  Included  data  mental illness 
collected  diagnosis 
MSIS  Fourth Quarter  39  Voluntary  Primary Only 
1998 
MDS  January - June  All 50 States  NF  ALL diagnoses 
1999  & Territories  Reported 
State  Federal FY  33  State  Primary AND/OR 
Survey  1998  reported  Secondary 
Case file  February/March  5  OEI  ALL diagnoses 
review  2000  collected 
Data is inconclusive 
After collecting data from the above identified sources, we cannot conclusively determine 
the extent to which younger individuals with mental illness reside in nursing facilities. 
Federal MSIS data for 39 States indicates that in fourth quarter FY 1998, 5,745 Medicaid 
beneficiaries residing in nursing facilities are between the ages of 22 and 64 and have a 
primary diagnosis of mental illness.  This number represents only 32 percent of the 
population of younger individuals with mental illness that are identified in MDS, for the 
same 39 States.  The MDS data for January through June of 1999 yields an unduplicated 
10 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  count of 17,919 younger nursing facility residents with any diagnosis of mental illness in 
the 39 States.  In all States and Territories, an unduplicated count in MDS indicates that 
there were 45,710 younger, Medicaid nursing facility residents with mental illness. 
According to MDS, on average, younger individuals with mental illness represent 1.6 
percent of States nursing facility populations.  This information is inconsistent with our 
survey data.  Twenty State mental health authorities (SMHAs) reported a total of 40,277 
younger nursing facility residents with mental illness.  These 20 States report that, on 
average, 10 percent of a States nursing facility population is comprised of younger 
individuals with a primary diagnosis of mental illness, and 20 percent is comprised of 
younger individuals with a primary or secondary diagnosis of mental illness. Our case file 
review of 19 nursing facilities indicated that approximately 14 percent of these nursing 
facility residents were younger individuals with a primary or secondary diagnosis of mental 
illness. 
The table below demonstrates that data inconsistencies prevent us from making a 
definitive assessment of the total number of younger nursing facility residents with mental 
illness. 
Total Number and Percent of Younger Individuals with Mental Illness in Nursing 
Facilities 
MSIS22  MDS2 3  State  Case File 
(34 States)  (39 States)  Reported  Review 
Data  (19 
(20 States)24  Facilities) 
Total Number of NF Residents  NR  1,101,599  -- 2,712 
Number of Younger Individuals with MI  5,745  17,919  40,277  385 
Residing in NFs 
Percent of NF Residents that are Younger  -- 1.6%  -- 14.2% 
Individuals with MI 
Average Number of Younger Individuals w/  169  459  2,014  --
Mental Illness Residing in NFs in a State 
Average % States NF Population of  -- 1.6%  10%25  --
Younger Individuals with Mental Illness 
NR = Not Requested 
22  MSIS data for 34 of the 39 MSIS States. 5 States did not submit this information to HCFA.

23  MDS data for the 39 States that submitted information to MSIS.

24  20 State mental health authorities reporting

25  Unweighted average of percentages reported by 18 State Medicaid agencies

11 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  Claims data cannot be validated 
We attempted to validate the MSIS expenditures by identifying in the MSIS claims and 
eligibility files the 19 nursing facilities we visited and the 187 younger Medicaid 
beneficiaries with mental illness whose files we reviewed.  Only 10 of the 19 nursing 
facilities were identified as having submitted at least one claim for younger individuals 
with mental illness.  To identify individual claims for nursing facility residents, we 
attempted to identify the 187 individuals whose case files we reviewed.  None of these 
residents were found in MSIS, even though 111 were admitted to the nursing facility in 
1998 or prior and had indicated Medicaid as their payer source. 
Matching data sources yields unreliable results 
Contrary to HCFAs assertion, MSIS cannot be matched with MDS to yield reliable 
results for research and analysis.  As a result, we could not discern valuable facility level 
information.  We attempted to identify the average percent of a nursing facilitys total 
population with a mental illness between the ages of 22 and 64.  To do so, we planned to 
use MDS to provide the total population of the nursing facility, while MSIS would 
provide us with the number of individuals with mental illness between the ages of 22 and 
64.  Then, we planned to cross the provider numbers of MSIS and MDS to identify the 
average percent of a nursing facilitys total population with a mental illness between the 
ages of 22 and 64 for each of the 34 States that submitted information to MSIS. 
However, we were only able to identify and match with MDS 39 percent of nursing 
facilities that MSIS identified as having at least one younger individual with mental illness. 
The percent of nursing facility matches between MSIS and MDS ranges from 0 to 92 
percent in the 39 reporting States.  For 10 States, none of their nursing facilities matched 
with the MDS nursing facility identifiers.  Therefore, we cannot say with any certainty 
what percent of nursing facility residents, on average, are younger individuals with mental 
illness. 
Our inability to match the providers in these two HCFA data sources can be partially 
attributed to the lack of a unique provider number for each nursing facility.  The inability 
to match nursing facility data from MSIS and MDS has ramifications for obtaining reliable 
information regarding nursing homes overall.  States frequently assign facilities different 
numbers when submitting information to different Federal data sources.  The MSIS 
provider numbers are often different than the MDS provider number assigned to a facility 
for the Minimum Data Set.  A given provider may have one number for MSIS, another for 
MDS, another for OSCAR, and yet another for Social Security and Internal Revenue 
Service tax purposes.  In addition, States may assign a new provider number when there is 
a change in nursing facility ownership. 
12 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  State survey difficulties 
State survey respondents indicated that they had difficulty providing the information we 
requested regarding younger individuals with mental illness in nursing facilities.  Many 
States were unable to respond to our information request because they do not collect or 
sort data by age.  In addition, Medicaid and Survey Agencies in 20 States reported that 
they could not distinguish data by primary and secondary diagnosis.  Two States also 
indicated that secondary diagnosis is not incorporated into their central database. 
A few States expressed frustration with the MDS system, reporting that it is incomplete 
and that it does not break out diagnosis by primary or secondary diagnosis so that they 
could not use these data to respond to our survey.  Three State agencies stated that 
information was unavailable because the MDS is incomplete.  One State indicated that 
they would like to use MDS for identifying this population but they know that MDS lacks 
the necessary data. 
Medicaid expenditures cannot be validated 
To calculate States Medicaid expenditures for younger nursing facility residents with 
mental illness, we had to rely on MSIS and State data -- MDS does not collect 
expenditure information other than residents payer source.  We believe however, that 
MSIS is an inaccurate representation and underestimation of Medicaid expenditures for 
this population. 
As discussed above, MSIS does not accurately account for the number of younger 
individuals with mental illness who submit a Medicaid claim for nursing facility services. 
In addition, MSIS captures claims and eligibility information matched to a specific 
diagnosis code.  A nursing facility claim for per diem might not identify an individual with 
a serious mental illness if it is not his/her primary diagnosis.  Therefore, this data 
underestimates State and Federal expenditures for this population. 
Medicaid expenditure data from MSIS is not validated by our survey and case file review. 
There is a discrepancy in the Medicaid expenditures identified through MSIS and in our 
State survey.  Eight States that responded to our survey provided Medicaid expenditures 
for younger nursing facility residents with a primary diagnosis of mental illness also 
submitted claims to MSIS.  These eight States reported that they spent, in total, $30.8 
million in Medicaid dollars in Federal FY 1998. 
However, this figure is twice the amount indicated by MSIS data for this population in 
these same eight States.  The MSIS data indicates that the total Medicaid expenditure for 
the eight States was approximately $15.7 million for Federal FY 1998 ($3.9 million for 
13 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  4th Quarter 1998). 26  Further, our survey data indicates that on average States spent $3.1 
million for one quarter, or $12.3 million for one year, on younger nursing facility residents 
with mental illness.27  However, MSIS data indicates that, on average, States spend $1.2 
million per quarter on this population, approximately $4.9 million per year. 
States do not know where younger individuals with mental 
illness are receiving long-term care 
State mental health authorities 
State mental health authorities (SMHA) responding to our national survey report that 
individuals with mental illness, ages 22-64, reside in a variety of long-term care facility 
settings.  However many of the SMHAs that responded to our survey reported that they 
had difficulty reporting the number of individuals in this specific age group residing in the 
types of facilities outlined in the chart below.  Many States could not provide us with this 
information as they do not report by age.  Twelve States report that facility level 
information was unavailable.  Four States were only able to provide long-term care facility 
health information for all ages. 
Long-Term Care Options for Younger Individuals with Mental Illness 
Type of Long-term  States  Residents  Residents 
Care Facility  Reporting  (Total)  (Average) 
IMDs  14  141,825  10,130 
State Psychiatric Hospitals  27  75,971  2,814 
Community-Based Facilities  17  44,069  2,592 
Hospital Psychiatric Wards  11  89,707  8,155 
Nursing Facilities  20  40,277  2,014 
Other28  8  34,505  4,313 
Source: 51 State Mental Health Authority Survey 
26	 For all 39 States MSIS data indicates that for 4th Quarter 1998 $41.6 million (or $166.4 million 
for the year) Medicaid dollars were spent on mental health claims for younger individuals with 
mental illness in nursing facilities. 
27  Thirteen States reporting. 
28  Other includes assisted living, board and care or personal care homes. 
14 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  Many States that responded to our survey were not able to provide all of the expenditure 
information we requested.  Of the 43 State mental health authorities that responded to our 
survey, only 13 were able to provide us with expenditures from all of the funding sources 
we requested.29  For these 13 States, the total mental health expenditure is $2.4 billion. 
On average, State funds accounted for 69.2 percent of total mental health expenditures for 
these States. 
State Mental Health Expenditures Reported by 13 States 
Funding Source  Total Dollars  Average % of Total MH 
State Funds  $1.4 billion  69.2% 
SAMHSA Block  $143.9 million  4.8% 
Grants 
Specialized Services  $57.8 million  1.5% 
Other  $886 million  37.1% 
Total  $2.4 billion 
Source: 51 State Mental Health Agency Survey 
Medicaid Agencies 
State Medicaid agencies also had difficulty reporting expenditure information for all types

of long-term care facilities and specifically nursing facilities.  Most State Medicaid

agencies did not report expenditure information for the types of long-term care facilities

where younger individuals with serious mental illness may reside.  Only 15 of 36 State

Medicaid agencies were able to report Medicaid expenditure for younger nursing facility

residents with a primary or secondary diagnosis of mental illness.  These 15 States report

spending a total of $466.3 million in Medicaid funds for this population.

Only nine States were able to provide complete expenditure information for younger

individuals with a primary diagnosis of mental illness.  In total, these nine States spent

$426.8 million in Medicaid funds on individuals of all ages with a primary diagnosis of

mental illness in all types of facilities.  The same nine States reported that, in total, they

spent $29.8 million in Medicaid funds on younger nursing facility

residents with a primary diagnosis of mental illness and $125.7 million for this population

in all types of long-term care facilities. 

29	 Of the 43 State mental health authorities that responded to our survey 35 were able to report 
dollars from State funds, 33 were able to report SAMHSA block grant dollars, and only 22 States 
were able to report specialized service dollars. 
15 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  Medicaid Expenditures for Individuals with a Primary Mental Illness Diagnosis 
Ages 22-64 in  Ages 22-64 in all  All ages in all 
nursing facility  long-term care facilities  long-term care facilities 
9 States  $29.8 million  $125.7 million  $426.8 million 
Source: 51 State Survey, 2000, Fiscal Year 1998 
16 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  O T H E R  C O N S I D E R A T I O N S  
Our inspection focuses on younger nursing facility residents with mental illness.  However, 
the issues we encountered regarding the validity and reliability of the data raise significant 
concerns about the broader use of both MDS and MSIS data in making and evaluating 
health care policy.  Our unsuccessful attempt to identify this population is indicative of a 
larger problem with these Federal data sources.  This examination questions the use of 
Federal data sources to accurately yield important demographic, utilization, and 
expenditure information upon which to base policy.  Without reliable information that 
enables us to identify populations of individuals requiring particular types of services, we 
cannot assess appropriateness, access and quality of care, nor determine the effectiveness 
of Federal Medicaid and nursing facility policy. 
17 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  R E C O M M E N D A T I O N S 
Recent attention on individuals with mental illness, particularly those in institutional 
settings, increases the need for HCFA to ensure that Federal data systems can respond to 
both the Administrations and the publics inquiry of the status of younger nursing facility 
residents with serious mental illness.  In response to both the Mental Health: A Report of 
the Surgeon General and the Olmstead Supreme Court Decision, the Administration has 
focused attention on ensuring the appropriate care of individuals with mental illness in 
nursing facilities and the fact that no person should have to live in a nursing home or 
other institution if he or she can live in his or her community. 
The HCFA and others should be able to use both MSIS, MDS and other related Federal 
data systems to monitor the extent to which nursing facility residents have mental illness 
and, in turn, receive needed mental health treatment.  Instead, the use of Federal MSIS 
and MDS data to identify younger individuals with mental illness is limited by the lack of a 
unique provider identifier to cross and match providers in more than one data source, the 
lack of available data that is timely, the time differential in available data from these two 
sources,  and the type of data collected.  The MSIS is primarily used by HCFA for 
beneficiary enrollment information, while States use MDS to provide information to State 
survey agencies and individual facilities. 
Effective MSIS and MDS data systems can better ensure that barriers which prevent the 
necessary care provided to all residents of nursing facilities are being systematically 
evaluated and, in turn, eliminated.  The HCFA must ensure that MSIS and MDS data 
systems produce comprehensive, consistent, valid, reliable and accurate information in 
order to facilitate the identification of nursing facility residents both within and across 
individual databases in order to provide a comprehensive picture of how nursing facility 
residents are affected by current policies. 
In order to improve the ability of HCFA to produce accurate nursing facility 
information and to monitor the care and treatment of Medicaid nursing facility 
residents, we recommend that HCFA: 
C  assign unique provider numbers to long-term care facilities that submit information 
to Federal data sources; 
C  provide training and clearer coding instructions to improve the ability of nursing 
home staff and of the MDS instrument to capture mental illness diagnoses 
C  make MDS and MSIS data available in a timely manner; 
C  require States to report information by age; and 
C  require States to report information by diagnosis. 
18 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  In response to the Olmstead Supreme Court Decision that requires individuals to 
be placed in the most integrated and least restrictive setting appropriate, we 
recommend that HCFA: 
C	 facilitate the availability of [improved] MSIS and MDS data to be used to assist 
States in complying with HCFAs directive to identify residents and periodically 
review the services of all residents in Medicaid-funded institutional settings; and 
C	 encourage States to use MSIS and MDS data systems to demonstrate that the 
State has a comprehensive, effective working plan for placing qualified persons 
with disabilities in the most integrated setting appropriate. 
19 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  A G E N C Y   C O M M E N T S  
We received comments from the Health Care Financing Administration (HCFA) and the 
Assistant Secretary for Planning and Evaluation (ASPE).  The HCFA concurs with six of 
our seven recommendations.  The ASPE provided general comments.  Where appropriate 
we changed the report to reflect their comments.  The full HCFA and ASPE comments are 
contained in Appendix A. 
The HCFA believes that mental health is central to the overall well being of all our 
beneficiaries, including younger nursing facility residents and that monitoring these 
residents care and treatment and maintaining accurate nursing facility information is 
essential to their well-being.  We would like to thank HCFA for their assistance in 
conducting this study and for providing us with substantive and insightful comments. 
The one recommendation that HCFA does not concur with is amending the MDS to 
distinguish between primary, secondary and tertiary diagnoses.  The HCFA proposes an 
alternative to our recommendation that would provide training and clearer coding 
instructions to improve the ability of nursing home staff and of the MDS instrument to 
capture Mental Illness diagnoses.  Specifically, HCFA proposes including a clarification 
of the coding requirements surrounding completion of the Diagnoses section of the MDS 
and in particular, capturing mental illness diagnoses.  The Manual revision is planned for 
Spring 2001.  Our intent to making changes in the MDS is to enhance nursing facilities 
ability to capture serious mental illness regardless of the ranking of diagnosis and increase 
nursing facilities ability to identify and accurately care plan for younger residents with any 
serious mental illness.  We agree with HCFA that providing training and improved coding 
instructions is in accordance with the intent of our recommendation and have changed our 
recommendation accordingly. 
The HCFA expressed concern that the difficulty we experience in finding mental health 
information may be due to the timing of the study.  In particular, concern was expressed 
that we were looking for diagnostic information not required to be included in the MDS 
database at the time of our study.  We want to clarify that our methodology did not rely 
on information captured exclusively by an initial MDS assessment which before its latest 
iteration may not have included relevant mental health information.  Instead, we reviewed 
medical files of individuals with serious mental illness that included both their initial MDS 
assessment and at least two quarterly MDS assessments which would have captured their 
mental illness diagnosis had it been accurately recorded by the nursing facility.  In 
addition, our review of the MDS database universe for a six month period allowed us to 
capture both the initial and at least one quarterly MDS assessment which, again would 
have enabled us to capture mental health diagnoses. 
20 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  The HCFA reports that they have concerns that our inspection does not accurately depict 
their role in determining State compliance with the Olmstead Decision.  What we wanted 
to emphasize was that improved MSIS and MDS data systems can help facilitate States 
compliance with the Olmstead Decision as part of a multi-faceted approach.  We agree 
that the improvements HCFA has committed to making should prove to be beneficial. 
The ASPE expressed concern that the focus of our report, younger individuals with 
serious mental illness, comprise less than 3% of nursing home residents according to the 
1996 Medical Expenditure Panel Survey (MEPS).  The MEPS bases this particular figure 
on information gathered from the MDS.  Again, as we point out in our report, the MDS is 
not a reliable data source for a variety of reasons.  Further, in 1996, when the MEPS was 
released, the ability to capture mental illness diagnosis through the MDS was even more 
limited than the time period we reviewed. 
In addition, ASPE states that the MDS and MSIS are difficult to compare because they 
capture different diagnostic information.  We agree with ASPE that MDS and MSIS are 
difficult to compare which contributed to our inability to accurately quantify this 
population.  More importantly, we continue to believe that regardless of the overall size of 
the national population of younger nursing facility residents with serious mental illness, 
their presence and care in nursing facilities warrants HCFAs specialized attention. 
We would like to thank ASPE for providing us with comments. 
21 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

22 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

23 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

24 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

25 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

26 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

27 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

28 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

29 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

30 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

31 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701  APPENDIX A 
Agency Comments

32 
Younger Nursing Facility Residents with Mental Illness  OEI-05-99-00701