42 CFR §483.132

1. (a)Basic rule. For each applicant for admission to a NF and each NF resident who has MI or IID, the evaluator must assess whether—
   1. (1)The individual's total needs are such that his or her needs can be met in an appropriate community setting;
   2. (2)The individual's total needs are such that they can be met only on an inpatient basis, which may include the option of placement in a home and community-based services waiver program, but for which the inpatient care would be required;
   3. (3)If inpatient care is appropriate and desired, the NF is an appropriate institutional setting for meeting those needs in accordance with § 483.126; or
   4. (4)If the inpatient care is appropriate and desired but the NF is not the appropriate setting for meeting the individual's needs in accordance with § 483.126, another setting such as an ICF/IID (including small, community-based facilities), an IMD providing services to individuals aged 65 or older, or a psychiatric hospital is an appropriate institutional setting for meeting those needs.
2. (b)Determining appropriate placement. In determining appropriate placement, the evaluator must prioritize the physical and mental needs of the individual being evaluated, taking into account the severity of each condition.
3. (c)Data. At a minimum, the data relied on to make a determination must include:
   1. (1)Evaluation of physical status (for example, diagnoses, date of onset, medical history, and prognosis);
   2. (2)Evaluation of mental status (for example, diagnoses, date of onset, medical history, likelihood that the individual may be a danger to himself/herself or others); and
   3. (3)Functional assessment (activities of daily living).
4. (d)Based on the data compiled in § 483.132 and, as appropriate, in §§ 483.134 and 483.136, the State mental health or intellectual disability authority must determine whether an NF level of services is needed.