According to CFR 483.102(b)(3), an individual has an intellectual disability (previously mental retardation) if he or she has:
1) A level of retardation as described in the American Association on Mental Retardation's (AAMR) Manual on Classification in Mental Retardation, published in 1983; or
2) A related condition, which is defined by 42 CFR 435.1009 as a disability that:
a) Is attributable to:
i) Cerebral palsy or epilepsy; or
ii) Any other condition, other than mental illness, found to be closely related to mental retardation because it impairs intellectual functioning or would require services normally delivered to an individual with impaired intellectual functioning;
b) Manifests before the reaches age of 22;
c) Is likely to continue indefinitely; and
d) Results in substantial functional limitations in three or more of the following life activities:
ii) Understanding and use of language;
v) Self-direction; or
vi) Capacity for independent living
The CFR cited the AAMR's 1983 Manual because it contained it represented the most current understanding of mental retardation at the time the regulations were published, and because the authors of the original PASRR legislation (in the Omnibus Budget Reconciliation Act of 1987) wished to "pick out" a set of people that would not change over time (so that the application of PASRR would itself not change arbitrarily). Nonetheless, it is very much "of its time."
Notions of mental retardation have evolved considerably since 1983. Indeed, the Association itself has published several revisions to the manual, and has changed its name to The American Association of Intellectual and Developmental Disabilities (AAIDD), reflecting a move away from the (frequently derisive) term "mental retardation." According to Rosa's Law, which was passed by the federal government in October 2010, "intellectual disability" now effectively takes the place of the previously used term "mental retardation." Fundamentally, states must be able to "translate" between the 1983 Manual into the categories of the most recent version or to other, widely recognized definitions of intellectual disability, so that PASRR continues to apply to individuals with the same characteristics, even if the diagnostic categories (i.e., the names) have changed.
The category of related conditions has always been more flexible. This is both an advantage and a disadvantage: It is often difficult to determine whether a disorder really impairs self-care or self-direction. As a consequence, related conditions have sometimes proven controversial. This is a topic that CMS and PTAC will explore in greater depth in the near future.
For reference, this page includes a copy of the 1983 Manual and a copy of Rosa's Law as downloadable PDFs.