Nursing homes accept individuals with mental health conditions, but the process is heavily regulated. The outdated term “mental patient” has been replaced by modern clinical language, referring to individuals with a Serious Mental Illness (SMI) such as schizophrenia or bipolar disorder. Nursing facilities are designed to provide skilled nursing and medical care. They admit people with SMI only if they also require the level of physical care the facility offers. Federal mandates ensure individuals are not inappropriately institutionalized solely for psychiatric reasons. The core determination is whether the person’s medical needs necessitate the skilled care environment of a nursing facility alongside their mental health needs.
The Required Screening Process
The process for admitting an individual with a mental health condition into a Medicaid-certified nursing facility is overseen by the federal mandate called the Preadmission Screening and Resident Review (PASRR). Established under the Omnibus Budget Reconciliation Act of 1987 (OBRA ’87), PASRR prevents the inappropriate placement of individuals with Serious Mental Illness (SMI) or Intellectual/Developmental Disabilities (IDD). The mandate ensures people are placed in the most appropriate and least restrictive setting for their needs.
The PASRR process involves a two-level screening. The Level I screen is an initial review for all applicants to identify any indication or history of SMI or IDD. If the Level I screen suggests the presence of a condition, it triggers a comprehensive Level II evaluation, which is a full diagnostic assessment conducted by a state mental health authority.
The Level II evaluation confirms the diagnosis and determines if the individual requires the level of care provided by a nursing facility. The state must confirm the person’s physical or medical needs are significant enough to necessitate skilled nursing care. If the individual has SMI and meets the medical necessity for nursing facility care, the state then assesses whether specialized psychiatric services are required. PASRR acts as a gatekeeper, ensuring nursing homes are not used as substitutes for psychiatric hospitals or community mental health residences.
Distinguishing Severe Mental Illness from Dementia
A clear regulatory distinction exists between Severe Mental Illness (SMI) and Alzheimer’s Disease and Related Dementias (ADRD). SMI includes conditions such as schizophrenia, major depressive disorder, and bipolar disorder, defined by a mental, behavioral, or emotional disorder resulting in functional impairment. The PASRR requirements apply directly to applicants with SMI to ensure appropriate placement.
Individuals whose primary diagnosis is dementia are treated differently under PASRR rules. Regulations typically exempt a primary diagnosis of dementia from the Level II screening requirement, allowing admission based on the need for physical care. The focus is on determining if the individual has SMI that is not related to dementia, or if they have a co-occurring SMI alongside their dementia.
This differentiation is significant because SMI requires a determination of the need for specialized mental health services. Dementia alone does not automatically trigger the same intensive review of psychiatric necessity for placement. Although both conditions can cause behavioral and cognitive challenges, the legal pathway for admission and service requirements are not identical.
Specialized Care Services in Nursing Facilities
Residents with SMI who are appropriately placed in a nursing facility must receive necessary specialized care services, often called “active treatment.” This means the nursing home cannot simply manage the resident’s physical health while ignoring their mental health needs. The care must be integrated, addressing the resident’s physical, mental, and psychosocial well-being to help them achieve the highest practicable level of function.
Specialized services include psychiatric consultations, psychological services, and comprehensive medication management. The facility must ensure a professional mental health treatment plan is actively implemented, which may involve individual and group therapy or psychosocial rehabilitation. While many facilities contract with outside mental health organizations, the ultimate responsibility for providing these services rests with the facility. The goal is to stabilize the SMI and integrate mental health care into the daily routine of physical care.
When Nursing Homes Are Not the Appropriate Setting
A nursing home is considered an inappropriate placement if the individual’s primary need is psychiatric treatment and they do not require skilled nursing care. The Level II PASRR determination checks if the individual’s needs could be met in a less restrictive community setting, such as a specialized residential facility or supported housing. If the screening reveals the person only requires specialized psychiatric services without a concurrent need for skilled nursing care, admission must be denied.
If the Level II screening determines the individual requires Specialized Services (SS) that the nursing facility cannot provide, or would be better served in a psychiatric hospital, placement will be denied or discharge planning initiated. This regulatory restriction upholds the principle that institutionalization should be reserved for those whose complex medical needs cannot be safely managed elsewhere. It prevents the misuse of nursing facilities as long-term psychiatric institutions.