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Federal Definitions of “Institution”

2004

The Social Security Act’s definition of an intermediate care facility for the mentally retarded can be found in Section 1905(d): The term "intermediate care facility for the mentally retarded" means an institution (or distinct part thereof) for the mentally retarded or persons with related conditions if--

(1) the primary purpose of such institution (or distinct part thereof) is to provide health or rehabilitative services for mentally retarded individuals and the institution meets such standards as may be prescribed by the Secretary;

(2) the mentally retarded individual with respect to whom a request for payment is made under a plan approved under this title is receiving active treatment under such a program; and

(3) in the case of a public institution, the State or political subdivision responsible for the operation of such institution has agreed that the non-Federal expenditures in any calendar quarter prior to January 1, 1975, with respect to services furnished to patients in such institution (or distinct part thereof) in the State will not, because of payments made under this title, be reduced below the average amount expended for such services in such institution in the four quarters immediately preceding the quarter in which the State in which such institution is located elected to make such services available under its plan approved under this title.

Medicaid, Section 483 of 42 CFR:

Intermediate Care Facilities for People with Mental Retardation (ICFs/MR)

Intermediate care facility for people with mental retardation (ICF/MR) services are an optional Medicaid benefit. Section 1905(d) of the Social Security Act created this benefit to fund "Institutions" (four or more beds) for people with mental retardation or other related conditions, and specifies that these institutions must provide "active treatment," as defined by the Secretary.

The ICF/MR Program was established in 1971 when legislation was enacted which provided for Federal financial participation (FFP) for ICFs/MR as an optional Medicaid service. Congressional authorization for ICF/MR services as a state plan option under Medicaid allowed states to receive Federal matching funds for institutional services that had been funded with state or local government money.

To qualify for Medicaid reimbursement, ICFs/MR must be certified and comply with Federal standards (referred to as Conditions of Participation, found in Federal
regulations at 42 CFR Part 483, Subpart I, Sections 483.400- 483.480) in eight areas, including management, client protections, facility staffing, active treatment services, client behavior and facility practices, health care services, physical environment and dietetic services.

Currently, there are 7,400 ICFs/MR. This program serves approximately 129,000 people, and all individuals receiving ICF/MR services must financially qualify for Medicaid assistance. Most of the individuals who receive care provided by ICF/MR have other disabilities as well as mental retardation. Many of the people who are served by this program are also non ambulatory, have seizure disorders, behavior problems, mental illness, are visually-impaired or hearing-impaired, or have a combination of these conditions.

An institution for persons with mental retardation or other related conditions, according to Federal regulations at 42 CFR 435.1009, is defined as an institution (or distinct part of an institution) that:

(a) Is primarily for the diagnosis, treatment, or rehabilitation for people with mental retardation; and

(b) Provides, in a protected residential setting, ongoing evaluation, planning, 24-hour supervision, coordination, and integration for health or rehabilitative services to help individuals function at their greatest ability. ICF/MR services are defined in regulations (42 CFR 440.150) as those items and services furnished in an intermediate care facility for people with mental retardation if the following conditions are met:

The facility fully meets the requirements for a State license to provide services that are above the level of room and board;

The primary purpose of the ICF/MR is to furnish health and rehabilitative services to persons with mental retardation or persons with related conditions;

The ICF/MR meets the standards specified in Subpart I of part 483 of this chapter;

The recipient with mental retardation for whom payment is requested is receiving active treatment, as specified in 483.440 of this chapter; and

The ICF/MR has been certified to meet the requirements of Subpart C of part 442 of the chapter, as evidenced by a valid agreement between the Medicaid agency and the facility for furnishing ICF/MR services and making payments for these services under the plan.

ICF/MR services may be furnished in a distinct part of a facility other than an ICF/MR if the distinct part 1) Meets all requirements for an ICF/MR, as specified in Subpart I of part 483 of this chapter; 2) Is clearly an identifiable living unit, such as an entire ward, wing, floor or building; 3) Consists of all beds and related services in the unit; 4) Houses all recipients for whom payment is being made for ICF/MR services; and 5) Is approved in writing by the survey agency.

Mary Clarkson, Health Insurance Specialist & rule writer with CMS, was given the example of whether an ICF/MR of six or fewer persons would be considered an institution or a community service, she stated unequivocally that it would be considered an institution. She says one critical difference is that institutions are responsible for assessing and meeting all needs of the individuals who reside in them; whereas the state is responsible for assessing the needs of waiver participants, and providers are only responsible for meeting those needs that they are required to by the state's standards of participation and that they choose to provide. She also cited the requirement "to meet certain institutional criteria" that do not apply to community services, i.e., provision of nursing and other medical services.

Source: Centers for Medicare & Medicaid Services. (2004). Intermediate Care Facility for People with Mental Retardation Program (ICF/MR). Available: http://www.cms.hhs.gov/medicaid/icfmr/default.asp

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