As part of the Omnibus Budget Reconciliation Act (OBRA) enacted in 1987, Congress developed the Preadmission Screening and Resident Review (PASRR) program to prevent inappropriate admission and retention of people with mental disabilities in nursing facilities. Federal law mandates that Medicaid-certified nursing facilities (NF) may not admit an applicant with serious mental illness (MI), mental retardation (MR), or a related condition, unless the individual is properly screened, thoroughly evaluated, found to be appropriate for NF placement, and will receive all specialized services necessary to meet the individual's unique MI/MR needs. States are required to have a PASRR program in order to screen all NF applicants to Medicaid certified NFs (regardless of payer source) for possible MI/MR, and if necessary to further evaluate them according to certain minimum requirements. The state uses the evaluation to determine, prior to admission, whether NF placement is appropriate for the individual, and whether the individual requires specialized services for MI/MR. As a condition of the Centers for Medicare and Medicaid Services's (CMS's) approval of a Medicaid state plan, the state must operate a preadmission screening program that compiles with federal regulations. Additionally, the PASRR regulation requires resident reviews when there is a significant change in a NF resident's physical or mental condition. All applicants to Medicaid certified NFs (regardless of payer source) receive a Level I PASRR screen to identify possible MI/MR. These screens generally consist of forms completed by hospital discharge planners, community health nurses, or others as defined by the state. Individuals who do or may have MI/MR are referred for a Level II PASRR evaluation.