(a) Individuals with mental illness. For each resident of a NF who has mental illness, the State mental health authority must determine in accordance with §483.130 whether, because of the resident's physical and mental condition, the resident requires—

(1) The level of services provided by—

(i) A NF;

(ii) An inpatient psychiatric hospital for individuals under age 21, as described in section 1905(h) of the Act; or

(iii) An institution for mental diseases providing medical assistance to individuals age 65 or older; and

(2) Specialized services for mental illness, as defined in §483.120.

(b) Individuals with intellectual disability. For each resident of a NF who has intellectual disability, the State intellectual disability or developmental disability authority must determine in accordance with §483.130 whether, because of his or her physical or mental condition, the resident requires—

(1) The level of services provided by a NF or an intermediate care facility for individuals with intellectual disabilities; and

(2) Specialized services for intellectual disability as defined in §483.120.

(c) Frequency of review—(1) A review and determination must be conducted for each resident of a Medicaid NF who has mental illness or intellectual disability not less often than annually.

(2) “Annually” is defined as occurring within every fourth quarter after the previous preadmission screen or annual resident review.

(d) April 1, 1990 deadline for initial reviews. The first set of annual reviews on residents who entered the NF prior to January 1, 1989, must be completed by April 1, 1990.