Olmstead: Reclaiming Institutionalized Lives (Abridged Version)

This report is also available in alternative formats and on NCD's award-winning Web site at www.ncd.gov.

Publication date: September 29, 2003

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The views contained in this report do not necessarily represent those of the Administration as this and all NCD reports are not subject to the A-19 Executive Branch review process.

An independent federal agency working with the President and Congress to increase the inclusion, independence, and empowerment of all Americans with disabilities.

Letter of Transmittal

September 29, 2003

The President
The White House
Washington, DC 20500

Dear Mr. President:

The National Council on Disability is pleased to submit to you this report titled, "Olmstead: Reclaiming Institutionalized Lives." Under its Congressional mandate, the National Council on Disability is charged with the responsibility to gather information on the implementation, effectiveness, and impact of federal laws, policies, programs, and initiatives that affect 54 million Americans with disabilities. This report measures progress to date in the implementation of the landmark U.S. Supreme Court decision in Olmstead v. L.C. and related Federal and State Government initiatives.

In February 2001, you announced the New Freedom Initiative (NFI), a comprehensive plan that represents an important step in working to ensure that all Americans have the opportunity to learn and develop skills, engage in productive work, make choices about their daily lives, and participate fully in community life. In your NFI, you committed your Administration to pursuing the swift implementation of the Olmstead decision and supporting the most integrated community-based settings for individuals with disabilities.

Overall, varying degrees of progress have occurred in the implementation of the Olmstead decision. However, given the many areas where progress has not yet been achieved and in recognition of the relatively brief time since the decision was rendered and governmental initiatives were undertaken, further efforts clearly are necessary to increase public awareness of Olmstead, provide education and clarification regarding the applications and implications of the decision to relevant entities, and provide resources necessary both to encourage and to ensure effective adherence to both the spirit and intent of Olmstead.

In support of the NFI and to progress in the implementation of the Olmstead decision, I pledge our support to your Administration's commitment to ensuring that equality of opportunity, full participation, independent living, and economic self-sufficiency become realities in the lives of Americans with disabilities. Under your leadership, I remain confident that we can continue to build an America where all citizens live independent lives in the community of their choice.

Sincerely,

Lex Frieden
Chairperson

(The same letter of transmittal was sent to the President Pro Tempore of the U.S. Senate and the Speaker of the U.S. House of Representatives.)

-Supporters of MiCASSA

National Council on Disability Members and Staff

Members
Lex Frieden, Chairperson
Patricia Pound, First Vice Chairperson
Glenn Anderson, Ph.D., Second Vice Chairperson

Milton Aponte
Robert R. Davila, Ph.D.
Barbara Gillcrist
Graham Hill
Joel I. Kahn
Young Woo Kang, Ph.D.
Kathleen Martinez
Carol Hughes Novak
Anne M. Rader
Marco Rodriguez
David Wenzel
Linda Wetters

Staff
Ethel D. Briggs, Executive Director
Jeffrey T. Rosen, General Counsel and Director of Policy
Mark S. Quigley, Director of Communications
Allan W. Holland, Chief Financial Officer
Julie Carroll, Attorney Advisor
Joan M. Durocher, Attorney Advisor
Martin Gould, Ed.D., Senior Research Specialist
Geraldine Drake Hawkins, Ph.D., Program Specialist
Pamela O'Leary, Interpreter
Brenda Bratton, Executive Assistant
Stacey S. Brown, Staff Assistant
Carla Nelson, Office Automation Clerk

Acknowledgments

This report is issued in recognition of the victims of unnecessary institutionalization; our nation must not rest until it has delivered on the promise of freedom for all. The National Council on Disability expresses its appreciation to Judith Gran, Esq., with the Public Interest Law Center of Philadelphia, for drafting this report with the assistance of Max Lapertosa, Esq., and Ruthie Beckwith.

Executive Summary

I. Barriers to Community Integration in the United States

II. The Olmstead Decision

III. Case Law Applying and Interpreting Olmstead and Other Post-Olmstead Case Law Concerning Rights to Community Services

IV. The States' Response to Olmstead v. L.C.

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

V. Lessons Learned: Good Practice in Community Services and What Works

VI. Conclusions and Recommendations

Appendix

The extent of unnecessary institutionalization of people with disabilities in the United States is daunting. Research and experience have shown that the great majority of people who live in large congregate settings could be supported safely and effectively and enjoy a higher quality of life in a typical home in the community. Longitudinal studies of community placement document their more favorable outcomes and furthermore establish that persons with significant disabilities benefit the most from community placement. Similarly, comparing residents of nursing facilities with elders, children with complex health needs, and adults with physical disabilities living at home shows that nursing facility residents are not more severely disabled than those who receive support in their own homes. Yet, 106,000 persons with developmental disabilities lived in public and private institutions and more than 1,300,000 elders and persons with disabilities lived in nursing facilities in the year 2000. In addition, data on the outcomes of consumer-directed mental health services and intensive case management models show that most of the 58,000 persons currently confined in psychiatric institutions could be supported in their own homes in the community. The persons who fill the more than 800,000 licensed board and care beds in the United States could also live in the community.

In this report, the National Council on Disability (NCD) assesses the nation's response to the United States Supreme Court's decision in Olmstead v. L.C., 527 U.S. 581 (1999) that the unjustified institutionalization of people with disabilities is a form of discrimination. NCD's research reports on the extent of unnecessary institutionalization in the United States, the continuing barriers to community placement, and resources and service models that facilitate community integration. NCD examines the Federal Government's implementation efforts and the strategies states and key stakeholders are using to (1) develop consensus on a coordinated action plan, (2) identify and commit the necessary resources for community-based service options, and (3) sustain collaborative action toward creating real choice for people with disabilities living in institutions. NCD collected extensive information, available online in the electronic version of this report at www.ncd.gov/newsroom/publications/reclaimlives.html, on the states' experiences in the planning and implementation of the Olmstead decision.

The Olmstead Decision

In 1999, by a clear majority, the United States Supreme Court held in Olmstead v. L.C., 527 U.S. 581 that, under the Americans with Disabilities Act (ADA), undue institutionalization qualifies as discrimination by reason of disability and that a person with a mental disability is "qualified" for community living when the state's treatment professionals have determined that community placement is appropriate, the transfer from institutional care to a less restrictive setting is not opposed by the individual, and the placement can be reasonably accommodated, taking into account the resources available to the state and the needs of others with mental disabilities.

Whereas the justices agreed that the state is not required to provide immediate relief in the form of community placement where such relief would represent a "fundamental alteration" of the state's programs, the majority did not agree on what constitutes a "fundamental alteration." Only four justices agreed on the interpretation of the fundamental alteration defense set forth in Justice Ginsburg's opinion: that the defense should be construed to "allow the State to show that, in the allocation of available resources, immediate relief for the plaintiffs would be inequitable, given the responsibility the State has undertaken for the care and treatment of a large and diverse population of persons with mental disabilities" (527 U.S. at 604, emphasis added). Justice Ginsburg added that demonstrating that it has "a comprehensive, effectively working plan for placing qualified persons with mental disabilities in less restrictive settings" is one method a state may use to show that it already has reasonably modified its programs and that no further alteration is necessary. This statement became the basis for the Olmstead planning initiatives.

Barriers to Community Integration in the United States

Representatives of all disability groups agreed that lack of affordable and accessible housing is the single biggest barrier to community integration in the United States. Persons with disabilities whose incomes depend on government benefits need housing subsidies or shared housing to live in the community. Unfortunately, because of systemic barriers, people with disabilities tend not to receive their fair share of the approximately $7 billion in federal housing subsidy programs, and the various Section 8 housing subsidy programs targeted to persons with disabilities are funded at a relatively modest amount ($271 million in 2001) in comparison. An additional barrier is the lack of meaningful collaboration between human services agencies and housing agencies. High unemployment rates for persons with significant disabilities (typically 60 to 90 percent) maintain dependence on public benefits.

Low wages and benefits severely limit the availability of personal assistants and other direct support professionals. In turn, low wages are the result of low reimbursement rates for community services. Lack of quality health care and dependable transportation are also significant barriers.

The institutional bias of the Title XIX (Medicaid) program, in which home- and community-based waiver-funded services and personal care are optional whereas nursing facility services are required and financial eligibility rules for institutional residents are more generous than those for people living in their own homes, greatly compounds the problem. Title XIX waivers have significantly expanded available funding for home- and community-based services but have not leveled the playing field; because state governments do not recognize home- and community-based waiver services as entitlements, waiting lists for waiver services are long in most states. The unavailability of Title XIX reimbursement for services to adults below the age of 65 in Institutions for Mental Diseases (IMDs) poses a significant barrier to the use of home- and community-based waivers to fund community mental health services.

Delivering on the Promise

On June 18, 2001, President George W. Bush, pursuant to his New Freedom Initiative, issued Executive Order No. 13217, committing the Administration to implement the integration mandate of the ADA as interpreted in Olmstead. The Executive Order required federal agencies to promote community living for persons with disabilities by providing coordinated technical assistance to states; identifying specific barriers in federal law, regulation, policy, and practice that impede community participation; and enforcing the rights of persons with disabilities. Pursuant to the Executive Order, federal agencies evaluated their own programs to identify barriers and issued their final reports on March 25, 2002.

Altogether, the reports acknowledged the many barriers to community integration of persons with disabilities, including the institutional bias of the Medicaid program, unaffordable and inaccessible housing, a critical shortage of personal assistance and direct support professionals, and the unavailability of supported employment. However, most of the proposed agency actions consisted of technical assistance, training, research, demonstration, policy review, public awareness campaigns, outreach, enforcement of existing regulations, information dissemination, convening of advisory committees, and interagency coordination and collaboration. Systemic solutions, measurable goals, timelines, deliverables, and outcomes were lacking.

In early 2003, President Bush's Administration announced a five-year program beginning in FY 2004, the "Money Follows the Individual" Rebalancing Demonstration, to enable people with disabilities to move from institutions to the community. The program would provide 100 percent federal funding for home- and community-based waiver services for one year for a person leaving an institution, after which the state would agree to continue to provide services for the person at the regular Medicaid matching rate.

The States' Response

After Olmstead was decided, the Department of Health and Human Services (HHS) provided guidance to the states concerning the development of "comprehensive, effectively working plans" in increasing community placements. In addition, Olmstead stakeholders concluded that state implementation plans could have value both as an organizing tool for achieving deinstitutionalization and as a method to persuade states to commit to numerical targets, timelines, and allocation of resources. Although the experiences of states and stakeholders in implementing Olmstead varied widely, NCD's evaluative study documents some key overarching findings, including the following:

• Plans do not consistently provide for opportunities for life in the most integrated setting as people with disabilities define "the most integrated setting."
• The majority of states have not planned to identify or provide community placement to all institutionalized persons who do not oppose community placement.
• Few plans identify systemic barriers to community placement or state action steps to remove them and few plans contain timelines and targets for community placement.
• State budgets often do not reflect Olmstead planning goals.

Lessons Learned: Good Practice in Community Services and What Works

The following are some of the many examples suggested by this report of promising practices in the design, delivery, and financing of community services.

• Good practice in Olmstead planning. Indiana's recent plan assigns each recommendation to one of three categories: those that should be implemented quickly and with little or no fiscal impact or regulatory requirements; those that should be implemented quickly but have a fiscal impact or require regulatory changes; and those that are more complex, costly, or difficult and will require more time to develop and implement. Indiana's plan should serve as a model for other states. Nevada's Olmstead plan is commendable for its candid analysis of the state's compliance with Olmstead.
• Overcoming incentives to unnecessary institutionalization. Methods include Maine's use of pre-admission screening by an independent agency prior to nursing facility placement, Minnesota's legislation encouraging nursing facility operators to take beds out of service, and Washington's system for tracking reduction targets for nursing facility placements.
• Identification and transition of people with disabilities from institutions. In Colorado and Kansas, disability rights advocates are doing the work of identifying people in nursing facilities who could move to more integrated settings.
• Use of trusts and fine funds to finance transition costs and start-up of community services. A creative and underappreciated set of strategies for financing transition costs, providing "bridge funding," and funding new community services involves the creation of trusts and fine funds dedicated to the needs of people with disabilities. North Carolina, Oregon, and Washington have used the proceeds from the sale of state facilities to establish trusts to generate funds for people with disabilities.
• Housing strategies. Commendably, and in large part because of the influence of the technical assistance provided by the Department of Health and Human Services' (HHS') Office of Civil Rights (OCR), the more recently developed plans tend to reflect the input of housing agencies. Provisions for requiring universal design in new units that state housing agencies fund or finance; ensuring that all existing publicly financed housing has completed Section 504/ADA self-evaluations; conducting utilization reviews to ensure that targeted Section 8 programs are fully used; and including home modifications and home repair in the services provided under home- and community-based waivers and independent living programs are examples of housing-related recommendations in state Olmstead plans.
• Single point-of-entry systems. Single point-of-entry systems have the potential to reduce unnecessary institutionalization by providing easier access to a wider array of community services. Single point-of-entry systems that separate "assessment" and "service brokerage" from "service provision" are also responsive to the Centers for Medicare and Medicaid Services (CMS) findings in a number of states that Medicaid beneficiaries' right to choose among qualified providers was violated.
• Beyond institutional closure: Increasing community integration.Developmental disabilities services in Vermont and New Hampshire show that, more than placement in a residence outside an institution, "the most integrated setting" is a continuous process of increasing community inclusion. These states' service systems have progressed far beyond institutional closure and are eliminating group homes in favor of living in a companion home or a home of one's own and working at a real job with support.
• Self-determination. Self-determination and consumer-directed service models have been so broadly tested and practiced that they have emerged as fundamental principles in human services.

Recommendations

On the basis of its research, NCD recommendations for the Federal Government include the following:

• HHS and CMS should provide more explicit guidance on implementation of Olmstead v. L.C.
• CMS should determine whether the states are adequately identifying residents of Medicaid-funded and -certified facilities that can handle and benefit from community living.
• HHS should refocus its Real Choice Systems Change grant program as a true system-change project by shifting from funding demonstration projects to funding change that affects entire service systems.
• HHS should require the states to identify all institutionalized persons in the state and their need for community services.
• CMS should use its waiver approval authority to require the states to minimize "institutional bias" in the choice between institutional and home- and community-based waiver services.
• HHS should provide federal financial assistance to states to provide small grants to people with disabilities for transition costs from institutions to community.

Conclusion

The Olmstead decision has become a powerful impetus for a national effort to increase community-based alternatives and eliminate unjustified institutional placements. Ultimately, only comprehensive amendments to Title XIX of the Social Security Act, similar to the amendments proposed in MiCASSA (the Medicaid Community-based Attendant Services and Supports Act), will overcome the institutional bias within the Medicaid program. In the meantime, however, federal agencies have many measures, short of a thorough revision of Title XIX, they can and should undertake. We must continue to empower Olmstead stakeholders in their state "systems change activities," that is, in their efforts to redesign the state service systems to enhance choice, independence, self-determination, and community integration. Our nation will be much more prosperous when it makes real the right of people with disabilities to live in the most integrated setting.

1. What Is "The Most Integrated Setting"? Views of Persons with Disabilities

[P]eople with disabilities have the same rights as other citizens to freedom, equality, equal protection under the law, and control over their own lives. These rights must be honored if people who have disabilities are to be fully included as valued citizens in the relationships and opportunities of community life.¹

In our interviews with informants with disabilities and their advocates, we asked what the person considered "the most integrated setting" for persons with disabilities. Almost without exception, the interviewees responded by naming the qualities that make home living meaningful and satisfying to the individual. Only two respondents named a type of program, such as a supported living arrangement or a two-person home. Response patterns were similar across all categories of disability.

The most common response was that the most integrated setting is "a place where the person exercises choice and control," including choice of service providers: "What people themselves want! ... Self-determination is essential. People decide for themselves what they want and need."² A variation on this response was, "Whatever the person considers most integrated." The second most common response was, "A home of one's own shared with persons whom one has chosen to live with," or where one lives alone. The third most common response emphasized that home living for persons with disabilities should be like home living for other community members. Integration is "living in the community with everyone else like everyone else."³ Several respondents defined community integration as the result of participation in community activities or of the assumption by persons with disabilities of leadership roles in the community. And finally, one respondent defined community integration as affording opportunities for privacy, unlike an institution.

Similarly, when interviewees were asked what people with disabilities need to live in the most integrated setting, they responded, almost universally, not by listing formal services but by identifying ordinary human needs. Again, response patterns were similar across all disability groups. The most common response was that support depends on the person, must be defined by and tailored to the individual, and may change over time. The second most common response was that people need friendships, emotional support, and networks of friends, family, and mentors. Education, participation in community activities, and transportation were mentioned by a number of respondents. The only services that were listed were personal assistance, communication (for a person with autism), and case management (by one person); however, this latter response was offset by two respondents who stated emphatically that caseworkers and case managers were not helpful to persons with disabilities.

Every person we interviewed who was affiliated with a disability organization stated that the organization had a position on the right to live in the community. Organizational positions on community living varied little from one disability group to another. Some stated that the right to live in the community is "absolute," and others that closure of institutions is their organization's highest priority. The following were other common positions:

• Everyone has the right to live in the community with support.
• People should live independently, not in a nursing home.
• We support the right to choose.
• We support self-determination.
• We support inclusive communities.

Measured by our respondents' views of the most integrated setting, the number of people with disabilities who currently are denied the opportunity to live in the most integrated setting is large indeed. That number includes many people who live in group homes and other small congregate settings as well as those who live in large congregate facilities. However, applying a more modest definition of "the most integrated setting" as a living arrangement other than an institution, the number of unnecessarily institutionalized persons in the United States is daunting.

(a) Residents of Developmental Disabilities Institutions

In 2000, approximately 106,000 persons lived in state-operated and private Intermediate Care Facilities for persons with Mental Retardation (ICFs/MR) with seven or more beds. In addition, nearly 35,000 people with developmental disabilities lived in nursing facilities.⁴ For how many of these persons is a large ICF/MR or a nursing facility the most integrated setting? Although formal assessment data are lacking, it is possible to conclude from the studies of other institutional residents who have moved to the community that nearly all could receive the support they need in a small home in the community. During the past 20 years, a large body of research has documented the outcomes for people with developmental disabilities moving from institutions to the community. These studies "strongly suggest that people with all levels of developmental disability would enjoy better lives in community-based settings."⁵

The first systematic analysis of the impact of deinstitutionalization, the Pennhurst Longitudinal Study, tracked more than 1,100 persons who moved from Pennhurst Center, a developmental disabilities institution in Pennsylvania, under the court's orders and consent decree in Halderman v. Pennhurst beginning in 1979. Pennhurst closed in 1987, and virtually every resident moved to the community. Most moved to three-person homes in typical neighborhoods. The study found that as people moved from Pennhurst, they experienced significant gains in skills, personal happiness, family satisfaction, opportunities to participate in community activities, and other indicators of quality of life. In the community, the former Pennhurst residents were "better off in every way that we know how to measure." Moreover, the gains continued even after people had lived in the community for some time.⁶

These findings have been replicated in many other states, in cases in which institutional closure occurred under court order and in voluntary deinstitutionalization efforts.⁷ Further, the studies have shown that institutional residents with the most severe disabilities-those with profound retardation-experience the most dramatic gains in quality of life after they move to the community.⁸ More recently, studies of former institutional residents who are supported in newer models of services, such as supported living and self-determination, have shown that those persons make even greater gains in skills and experience a dramatically improved quality of life.⁹

(b) Residents of Nursing Facilities

Nationwide, 1,302,315 persons lived in nursing facilities in 1999, a slight decrease since 1993, when 1,305,212 persons lived in such facilities.¹⁰ Expressed as a percentage of U.S. residents ages 65 and older, this figure is the equivalent of 3.7 percent of the elder population.¹¹ Because occupancy rates in nursing facilities are significantly less than 100 percent (the average occupancy rate was 86 percent in 1997), the number of nursing facility beds is considerably larger than the number of residents. The total number of nursing facility beds in the nation increased from 1.31 million in 1978 to 1.81 million in 1997, and the number of nursing facilities in the nation increased during that period from 14,264 to 17,628.¹²

The Medical Assistance program supports about 1 million of the 1.3 million nursing facility residents. In 2000, approximately 10.9 percent of those persons were under age 65. The cost of nursing facility services accounted for more than 20 percent of all Medicaid expenditures during most of the 1990s and around 60 percent of all long-term expenditures.¹³

Nursing facility placement varies significantly from one state to another. For example, in Arizona, the nursing facility population is the equivalent of 1.1 percent of the population age 65 or older, whereas in Mississippi, the comparable percentage is 4.1 percent. In some states, such as Arizona, Maryland, and New Jersey, the nursing facility population has decreased significantly since 1993. In many others, for example, Illinois, Florida, and Indiana, the nursing facility population has increased.

The Nursing Home Reform Act¹⁴ requires states to screen persons who are being considered for nursing facility placement to ensure that they need the level of nursing care available in such a facility. The purpose of the Act is to divert persons who do not need nursing home care into community-based services. However, the Act does not prevent unnecessary nursing home placement for persons who do need skilled nursing services but could receive those services in the community if services were available.

The great majority of persons age 65 or older, including those with disabilities, do not live in nursing facilities. In fact, more than 90 percent of disabled older people living in the community get most of their everyday care from family caregivers.¹⁵ Nevertheless, Medicaid expenditures for elders are highly skewed toward nursing facility services. In 1995, Medicaid expenditures on long-term care for elderly beneficiaries represented 84.1 percent of the total and home care only 10.3 percent.¹⁶ Compared with nursing facility residents' need for community services and the availability of home- and community-based waiver funding for persons with developmental disabilities, the number of elders, adults, and children with physical disabilities and complex health care needs who receive home- and community-based services under the waiver (and who otherwise might have to live in a nursing facility) is relatively modest. According to statistics released by the National Institute on Disability and Rehabilitation Research (NIDRR) in October 2001, 43 home- and community-based waivers for elders with disabilities served a total of 235,215 persons; 27 home- and community-based waivers for persons with physical disabilities served a total of 25,704 persons; 20 home- and community-based waivers for children served a total of 3,072 persons; and 12 home- and community-based waivers for persons with acquired brain injury served a total of 1,373 persons.¹⁷

How many nursing facility residents could live in the community if services and support were available? Many elders with disabilities, children with complex health care needs, and adults with physical disabilities who live in their own homes and receive support from personal assistants, family, or friends have disabilities just as severe as those of nursing home residents. Data about the disabilities of more than 200,000 persons served by California's In-Home Supportive Services (IHSS) program show that the persons who use consumer-directed funds to pay family members or friends to provide personal assistance tend to have significantly more severe disabilities than other persons served by the program.¹⁸ Community-based models of service for persons with complex health needs, for example, persons with end-stage renal disease, have shown that these persons can receive skilled nursing services in their own homes or in a home-like setting.¹⁹

(c) Residents of Psychiatric Institutions

The Substance Abuse and Mental Health Services Administration (SAMHSA) of HHS estimates that, in 2001, about 58,000 persons with serious mental illness remained institutionalized in state psychiatric hospitals "in large part" because of "persistent clinical, service system, and financial barriers."²⁰ Little dispute exists that "[m]any thousands more live in nursing homes and others are inappropriately institutionalized in jails."²¹ A 1999 U.S. Department of Justice study reported that 284,000 persons incarcerated in local, state, and federal prisons had a mental illness.²²

Downsizing and closure of state mental health institutions accelerated during the 1990s. Although from 1970 to 1990 the total number of state and country psychiatric beds declined by half, only 14 hospitals were closed. During the 1990s, however, 44 state psychiatric hospitals were closed, and three additional closures were planned.²³

Data on use of mental health services by race and ethnicity reveal that African-Americans are significantly more likely than whites to be institutionalized in psychiatric hospitals and to be subject to repeat admissions after discharge. At the same time, African-Americans are significantly underrepresented in outpatient treatment programs, and studies show that they are less likely than whites to receive appropriate treatment and newer medications with fewer side effects.²⁴

How many people with psychiatric disabilities are inappropriately institutionalized? Although people with serious mental illnesses may need short-term hospitalization at times, from the experience of state hospital closures²⁵ and the outcomes of consumer-directed services and certain intensive case management models, most people with mental illnesses who might otherwise be confined in state psychiatric hospitals²⁶ clearly can be supported in their own homes in the community.

(d) Other Institutions, Including Board and Care Facilities, Shelter Facilities

In 1990, the states reported a total of 514,749 licensed board and care beds serving adults and elders in 35,171 board and care homes. By 1997, these figures had increased to 827,584 beds in 49,913 board and care facilities, but the increase is considered to be due in part to more complete reporting from the states. The average number of board and care beds per facility was 16.6 in 1997.²⁷ Because residents of board and care homes by definition require a lower "level of care" than nursing facility residents (that is, they do not qualify for nursing facility services on the basis of the intensity of services they require), they are by definition less disabled than residents of nursing facilities. If most nursing facility residents could live in their own homes and communities with support, then, a fortiori, most residents of board and care facilities could live in the community.

3. Barriers to Community Integration

It is beyond question that hundreds of thousands of unnecessarily institutionalized persons with disabilities are kept in isolated living situations by systemic barriers that include the very human service systems that are charged with providing appropriate services to them. As the self-advocates who gathered at the 2000 Conference on Self-Determination stated in the declaration that emerged from the conference,

Citizens who have disabilities experience oppression in many aspects of their lives. The causes of oppression include poverty, other people's attitudes, and the systems of publicly and privately funded support services, comprising -

laws, policies and regulations;

state and private sector funding bodies;

agencies which provide services.

These systems operate in ways that deny control to those they are intended to serve. Without accountability to those who require their assistance, these systems decide how, where and with whom people shall live and spend their days. While this situation persists, people of many nations will not be able to exercise their rights or fully participate in their communities.²⁸

The persons with disabilities whom we interviewed were asked to identify the barriers to community integration for persons with disabilities. We weighted these barriers by the importance that individual respondents gave to the barrier when they listed more than one, which shows that lack of affordable and accessible housing was perceived as the biggest barrier. The result was the same for persons with physical, developmental, and psychiatric disabilities. The barriers that respondents identified are listed here in order of rank:

Affordable and accessible housing (38)

Quality support staff (35)

Parent/guardian opposition (30)

Lack of affordable and accessible transportation (28)

Lack of adequate medical or dental care (26)

Neighborhood opposition (23)

Lack of jobs and job training (14)

Lack of residential services (11)

Lack of day services (8)

Other barriers mentioned by respondents were lack of social networks and friends; the need to learn skills; and political issues, such as state employees' need to keep their jobs and absence of crisis intervention.

No respondent with physical or psychiatric disabilities mentioned lack of day programs as a barrier, and respondents with developmental disabilities ranked it low. Housing, quality (or well-paid) support staff, and lack of access to medical and dental services were ranked high as barriers by persons in all disability groups. Parent/guardian opposition and neighborhood opposition were ranked high by persons with developmental disabilities, but not by persons with physical or psychiatric disabilities. Persons with psychiatric disabilities perceived lack of access to medical care as an important barrier.²⁹

The experience reported by the people with disabilities whom we interviewed is amply validated by the literature on obstacles to community integration.

a. Lack of Affordable or Physically Accessible Housing

It is little wonder that persons with disabilities and disability rights advocates identify lack of affordable or physically accessible housing as the single biggest barrier to community integration. Persons with disabilities are disproportionately poor, especially the persons who are most likely to be affected by the Olmstead decision, who rely on Supplemental Security Income (SSI) and other government benefits.

For low-income people with disabilities, affordable housing means subsidized housing that is either developed or rented through government housing programs. Because most funding for these programs comes directly or indirectly from the U.S. Department of Housing and Urban Development (HUD), there are potentially significant implications for federal housing policies and programs in the Olmstead decision. Thus far, however, the affordable housing issues raised by the Olmstead decision have received scant attention.³⁰

Nationally, SSI benefits are equal to only 18.5 percent of the one-person median household income. The result is no housing market anywhere in the country in which SSI beneficiaries-who numbered more than 3.5 million adults with disabilities in 2000-can afford decent housing with their monthly income of about $512 without government subsidies.³¹ Thus, access by people with disabilities to a fair share of the approximately $7 billion in federal housing subsidy programs is vital to their ability to afford decent and accessible housing in their own communities and neighborhoods.

The unmet housing needs of persons with disabilities, however, cannot be attributed to poverty alone. HUD data show that people with disabilities between the ages of 18 and 62 make up more than 25 percent of the 4.9 million households with the "worst case" housing needs, yet these persons represent only about 13 percent of the households that currently receive federal housing assistance. From 1997 to 1999, the number of households with "worst case" housing needs declined by 8 percent, probably as a result of economic prosperity, and the decline occurred in every group eligible for federal housing assistance except persons with disabilities. Indeed, housing needs among persons with disabilities may have increased during this period.³²

A report published by the Technical Assistance Collaborative, Inc. (TAC), and the Consortium for Citizens with Disabilities (CCD) Housing Task Force identified the following barriers to expanding housing opportunities for persons with disabilities:

• State and local officials do not give a high priority to the housing needs of persons with disabilities.
• Most Public Housing Authorities (PHAs) do not give a high priority to the housing needs of persons with disabilities.
• Most disability organizations have not established relationships or partnerships with affordable housing providers and funding sources.
• The disability community's knowledge of the key federal housing programs and policies that can assist persons with disabilities is very limited.
• The disability community has limited knowledge of Fannie Mae housing programs targeted to persons with disabilities.
• Many disability organizations do not understand how participation in HUD's Consolidated Pan process can help expand homeownership and rental housing for persons with disabilities.
• Most homeownership coalitions serving persons with disabilities have achieved only modest results, as measured by the number of persons who have become homeowners.
• Disability organizations need more housing knowledge, housing capacity, and technical assistance to expand access to affordable housing.³³

The effect of these barriers is that people with disabilities are cut off disproportionately from access to the billions of dollars in federal housing assistance for persons with low incomes.

Federal housing assistance is provided in accordance with three housing plans required by HUD that are prepared at the state and local level subject to HUD approval: (1) the Consolidated Plan, or ConPlan; (2) the Public Housing Agency Plan, or PHA plan; and (3) the Continuum of Care Plan for homeless assistance. Although these plans are developed separately, the activities to be funded through the PHA Plan and the Continuum of Care Plan must be consistent with the housing needs and strategies identified in the ConPlan.

The ConPlan is a comprehensive, long-range plan for development of affordable housing for low- and moderate-income households in states and local communities that receive funds from HUD. It must describe housing needs, market conditions, and housing strategies and set forth an action plan for the use of federal housing funds. It specifies how the state or locality will spend the money provided through the four principal federal housing subsidy programs, the Community Development Block Grant (CDBG), the Home Investment Partnership Program (HOME), the Emergency Shelter Grant program, and the Housing Opportunities for Persons with AIDS program. The plan must quantify the need for supportive housing for persons with disabilities and other support needs. However, because meaningful participation by the disability community is poor and the disability community is not adequately represented during the development of these plans, people with disabilities are not receiving their "fair share" of the federal housing resources that these plans control. Further, because state and local officials have considerable discretion in developing a ConPlan, HUD will not necessarily reject a plan simply because it does not address the housing needs of people with disabilities.³⁴ And finally, even if the ConPlan accurately identifies local housing needs, including those of persons with disabilities, state and local officials are not required actually to spend the money to address those needs. HUD can withhold block grant funds if a Conplan is not based on a thorough review of local housing needs, but then only to require revision of the plan.³⁵

Advocates of people with disabilities report that "most ConPlans do not accurately describe the housing needs of people who may be living in state institutions or facilities or who are at risk of institutionalization," that "housing strategies adopted in most ConPlans do not typically target federal housing funding to people with disabilities who are waiting to leave institutional settings," and that little meaningful consultation has occurred between health and human services agencies and housing officials about the housing policy issues raised by Olmstead or the housing resources that could be made available to create more community-based housing for persons who are unnecessarily institutionalized.³⁶

The "meaningless compliance" inherent in the ConPlan process was identified as one of HUD's management problems in the President's Management Agenda developed by the Office of Management and Budget (OMB) for FY 2002. OMB directed HUD to work with local stakeholders to streamline the ConPlan, making it more results-oriented and useful to communities. In 2002, HUD convened a ConPlan Improvement Initiative, a series of workgroups with stakeholder representation, including that of people with disabilities, to examine how the ConPlan can better be linked to other federally mandated plans for transportation or human services, how goals should be determined, and how results will be measured.³⁷As of March 2003, the process is far from complete.

The ADA community integration mandate-and the extreme poverty of people receiving SSI benefits-should compel government housing officials to target an equitable share of ConPlan funding to people with disabilities.³⁸ That equitable share should include a fair share of the funds available through the HOME program, which can be used to fund the acquisition, rehabilitation, or new construction of housing for people with disabilities and to fund two-year rental assistance subsidies for persons leaving institutions. The manner in which HOME funds are used is decided through the ConPlan process.³⁹

The Section 8 program (renamed the Housing Choice Voucher Program in 1998, but still known by its more familiar name), which provides rental vouchers for people with the lowest incomes, including SSI beneficiaries and currently assists more than 1.4 million households nationwide, is controlled by PHAs. These PHAs have authority to decide how public housing and Section 8 vouchers should be used in their communities, pursuant to a PHA Plan that is submitted to HUD for approval.⁴⁰ Section 8 includes programs targeted to people with disabilities. In addition, people with disabilities are also eligible for the general voucher program, known as the "fair share" program. In 2001, Congress appropriated funding for 79,000 new "fair share" vouchers. Beginning in 2000, HUD's "fair share" application process assigns 15 points to any housing authority (thus giving it an advantage in the competitive application process) that agrees that 15 percent or more of the vouchers requested will be used for people with disabilities. In addition, HUD will assign another 5 points if the PHA provides at least 3 percent of the requested Section 8 vouchers to persons who are receiving services under a home- and community-based service waiver.⁴¹ According to an analysis by the Technical Assistance Collaborative (TAC), only 224 of the 499 PHAs that received Section 8 vouchers in 2000 agreed to the set-asides for persons with disabilities; in 2001, the number increased to 422 of 475 PHAs.⁴² However, the data collected by TAC show that only 171 of the 475 housing authorities set aside 3 percent of their vouchers for home- and community-based waiver beneficiaries.⁴³

On October 12, 2000, HUD issued a final regulation enabling Section 8 vouchers to be used for mortgage payments. However, local PHAs are not required to participate in this program. Further, the PHA can choose to make Section 8 homeownership assistance available to any qualified application, or it can limit which families will participate. The inclusion of persons with disabilities in the program will depend significantly, therefore, on advocacy at the local level.⁴⁴

The Section 8 program also includes vouchers targeted specifically to people with disabilities. Before 1992, HUD's Section 202 program required owners of certain HUD-subsidized housing developments to house elderly persons and nonelderly people with disabilities on an equal basis. In 1992, a change in federal law allowed owners to designate these units as "elderly only," and many did. This significantly restricted access by nonelderly people with disabilities to the housing units. Beginning in 1997, Congress has appropriated funding for Section 8 vouchers designated for persons with disabilities to compensate for the loss of housing in projects now designated "elderly only" projects. These vouchers are available to PHAs that document the loss of housing for people with disabilities in their jurisdictions.⁴⁵ However, in spite of the fact that the new funding would make up only a fraction of the housing units that have become unavailable to people with disabilities since the "elderly only" provision went into effect, HUD data show that, at most, 10 percent of the PHAs that administer the Section 8 program applied to HUD each year since 1997 to make these vouchers available to people with disabilities. The percentages of PHAs that applied were 9 percent in 1997, 10 percent in 1998, and 8 percent in 1999.⁴⁶ Funding for another 10,000 vouchers has been appropriated since 1997 for the Section 8 Mainstream Program for People with Disabilities.

In 2000, Section 8 programs targeted to people with disabilities provided a total of 8,761 vouchers for people with disabilities (both elderly and nonelderly). Other HUD programs targeted to people with disabilities are the Section 811 Supportive Housing Program, the Section 202 Assisted Living Program (designed to serve frail elderly persons and elderly persons with disabilities), and the Services Coordinators program, which provides funding to owners of private housing developments to hire service coordinators to help persons with disabilities and elders obtain independent living services. Collectively, these programs were funded in 2000 at a total of $271.4 million. In comparison, HUD's largest affordable housing programs-the CDBG, funded at $4.8 billion in 2000, and HOME, funded at 1.6 billion-are potentially available to persons with disabilities but, as discussed above, are not designed to ensure that people with disabilities will, in fact, obtain a fair share of these benefits.⁴⁷ A 1999 survey of disability organizations found that very few of these organizations' constituencies had been able to access "generic" affordable housing programs, such as HOME and the CDBG.⁴⁸

The Technical Assistance Collaborative (TAC) and the CCD Housing Task Force have concluded that "[t]he stigma experienced by people with disabilities persists in many communities, and makes accessible or developing affordable housing difficult. Often, PHAs, housing developers and city officials would rather avoid serving people with disabilities than face the possible controversy."⁴⁹ This conclusion is echoed by a Substance Abuse and Mental Health Services Administration (SAMHSA) report that "in spite of the passage of the Fair Housing Amendments Act (FHAA) of 1988 [extending protection from discrimination in housing to people with disabilities], discrimination against people with mental illnesses is perhaps most prevalent when it comes to housing."⁵⁰ A further barrier to housing for persons with mental health disabilities is the perception that those persons need supervision and 'round-the-clock support from on-site staff. In fact, "the overwhelming majority of people with mental illnesses can live in their own homes."⁵¹

(b) Lack of Jobs, Job Training, and Supported Employment

Unemployment rates for persons with significant disabilities are high and have not appreciably diminished since 1990, when the ADA was enacted. The Surgeon General reports that the unemployment rate for persons with significant psychiatric disabilities is around 90 percent.⁵²

Related to the lack of meaningful employment experienced by far too many people with disabilities is the failure of the federal Vocational Rehabilitation (VR) program to adequately serve people with mental disabilities. That program, which provides approximately $2.5 billion annually to the states to provide job training for persons with disabilities who seek to enter or re-enter the work force,⁵³ is ineffective at helping persons who are or have been institutionalized obtain and sustain mainstream employment. Recent studies have documented the dismal record of state vocational rehabilitation agencies in achieving meaningful employment outcomes for persons with disabilities.⁵⁴

Reasons for the ineffectiveness of VR services for people with mental disabilities include the time-limited nature of those services; the use of "weighted closure" systems that reward counselors for closing cases and create disincentives for serving persons with significant disabilities; the emphasis on disability-determination activities over direct service; the lack of specialized expertise in mental disabilities; the failure to coordinate with mental health/mental retardation and other disability service programs; and the unrealistic funding and durational service limitations that can make it difficult for employment vendors to provide meaningful services to persons with significant disabilities.⁵⁵ Advocates echo the conclusion of formal studies that federal regulations governing the VR program "do not match with the individualized employment goals of the program."⁵⁶ Employment experts have recommended that more of the funds currently spent on VR services be "reprogrammed" and redirected into programs based on models of supported employment, psychosocial rehabilitation, independent living services, and other support services that could enable persons with significant disabilities to succeed in employment.⁵⁷

(c) Disincentives to Work in Public Benefits Programs

Although very many persons with disabilities who receive SSI and Social Security Disability Insurance (SSDI) benefits want to work and would be able to work with appropriate support, relatively few are able to do so because of the disincentives to work created by the eligibility rules for these programs. According to a 1998 study by the General Accounting Office (GAO), only one in 500 SSDI beneficiaries in that year left the rolls by returning to work.⁵⁸ These data suggest that it is unrealistic to expect significant numbers of people with disabilities to be able to replace public benefits with income from competitive employment and that the great majority of people with disabilities could benefit from income maintenance programs that make it possible to continue to receive public benefits while receiving additional income from employment.

The Social Security Administration (SSA) reports that the fear of losing health care benefits is the largest barrier preventing people with disabilities from returning to work. Further, the work incentive programs within SSI, SSDI, Medicare, and Medicaid are poorly understood and underused. Increases in income from work may also cause increases in rent under Section 8 housing programs, loss of food stamps, or decreases in public assistance benefits.⁵⁹

For persons who need personal assistance for work or daily living, the absence of sliding fee scales for personal assistance services is another major disincentive to work because income limits are too low to allow persons with disabilities to be able to pay to replace the services paid for by public benefits. Replacing the current "on/off switch" for eligibility with a sliding fee scale that can accommodate those who can pay privately, those who can pay part of the cost of their services, and those who cannot pay at all is critical.⁶⁰

(d) Shortage of Personal Care Assistance

Until 1980, primarily registered nurses employed by visiting nurses' associations and public health agencies, as well as family and friends provided support services to people with disabilities in their homes. In the 1980s, changes in Medicare certification and reimbursement policies, the Title XIX home- and community-based waiver amendments of OBRA 1981, and the redefinition of the "homebound" eligibility requirement of Medicare in 1987 led to enormous growth in the number of persons working as personal care assistants.⁶¹ Title XIX funds pay for services by home health aides, defined as "services related to a patient's physical requirements," similar to the services that would be performed by a nurse's aide in a hospital or nursing facility.⁶² Home health aides perform such services as homemaking, bathing, feeding, shopping, and assisting consumers with other activities of daily living.

The availability of personal care assistance is vital to enabling persons with disabilities to avoid institutionalization. Personal care assistants enable people with disabilities to accomplish a wide range of daily living tasks that they would perform themselves if they did not have a disability, including support with eating, dressing, bathing, grooming, and transferring, as well as health-related tasks, such as medication administration. Personal care assistant jobs are typically entry-level, offer few benefits, often do not even provide reimbursement for travel to clients' homes, and pay an hourly wage that is typically about two or three dollars above the minimum wage.⁶³

Because of worker shortages, people with disabilities for whom the state has authorized personal assistance services often do not receive all the hours of service they are entitled to and sometimes fail to receive those services at all. A survey of home care waiver recipients in Minnesota, for example, found that none of the consumers was receiving all the services for which the consumer was authorized.⁶⁴

(e) Low Wages of Support Staff

In 1998, the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry reported that 2 million health care paraprofessionals worked in the home care sector, of whom 600,000 were earning wages below the poverty line.⁶⁵ A survey of state legislative priorities by the National Conference of State Legislatures identified workforce issues, including shortages of personnel, as one of the four highest priorities.⁶⁶

Low wages for direct support staff are the result of low reimbursement rates for personal assistance services by state Medicaid and human services agencies. Low reimbursement rates not only fail to attract adequate numbers of support staff but also affect the competence of the staff who do fill those positions and ensure that those jobs remain entry-level, low-skill, high-turnover jobs.⁶⁷

Wages and benefits in community services are not competitive with jobs requiring comparable education, training, experience, and skill. They are not competitive even with jobs requiring significantly lower education, training, experience, and skill, such as fast food jobs. In many states, wages and benefits for direct care and professional staff in community services are radically lower than those in institutions. For example, in California a 1993 study found that the differential in average direct care staff wages and benefits between institutions and community- based services was 124 percent.⁶⁸ A legislative committee in the same state found that "as a result of low rates, vendors are having extreme difficulty in maintaining existing employees, and in hiring and training new employees." The subcommittee also found that "staff turnover results in a lower quality of service and can jeopardize the health and safety of the consumers receiving services" because "specialized knowledge about consumers and their needs comes from long-term relationships with direct care staff." Further, the subcommittee found, "without these services many consumers now living in the community would be forced into more restrictive environments."⁶⁹

(f) Service Models and Financing Systems That Limit Self-Determination and Choice

When asked to identify state or federal policies that hinder the ability of persons with disabilities to move into or live in the community, the persons with disabilities whom we interviewed identified the following:

• The institutional bias of Medicaid
• The status of nursing facilities as a required service
• The status of personal care as an optional service
• Intermediate care facilities for the mentally retarded (ICFs/MR)
• Funding that encourages congregating people together
• Funding that encourages investment in "bricks and mortar"
• The mind-set that people have to live in a "program"
• The lack of adequate wages for direct service staff
• That waivers have to be renewed, and institutional services don't
• More dollars going to the institution
• Policies that do not allow paying family members at home, but pay for services in a nursing facility
• VR not being used properly to support persons with severe disabilities.

Many respondents simply identified "funding" as a barrier or cited the imbalance in funding between institutions and community services.

The programmatic and funding obstacles identified by people with disabilities are well supported in the literature. The Medical Assistance program, Title XIX of the Social Security Act,⁷⁰ is the principal source of funding for long-term care services in the United States. Title XIX is a federal program operated by the states to provide medical and rehabilitation services. In 1998, Title XIX financed about 40 percent of the nation's total long-term care spending of $150 billion.⁷¹

Nursing facility services are a required Title XIX service; all states that accept Medicaid funding are required to provide those services to all eligible persons who request them. Although service in an ICF/MR is an optional state plan service, all the states have elected to provide that service and therefore are obligated to provide services in an ICF/MR to all eligible persons who request them. Unlike personal care, home health services, and home- and community-based waiver services, which the states have great flexibility in designing, the nursing facility and ICF/MR programs require the states to provide 24-hour care according to a detailed set of regulations. Further, the financial eligibility rules for institutional services are far more generous than the requirements for community services. A person can qualify for Medicaid in a nursing home with income up to 300 percent of the federal poverty level. Unless an exception is granted under a waiver, this rule does not apply to people who live in the community. Similarly, spousal deeming of income rules protect the income and assets of the spouse of a nursing facility resident but not the income and assets of the spouse of a person who receives Medicaid services at home. For children placed in institutions, the state may not count the parents' income in determining the child's eligibility, but this is not the case for families who care for their children at home.⁷²

In the 35 states that have exercised the option to cover persons who are "medically needy," that is, to allow persons with high medical expenses to "spend down" periodically to financial eligibility levels, the eligibility requirements for community services are in theory not as onerous. In practice, however, the spend-down limits are often so low that people receiving Medicaid services in the community have insufficient income to cover basic living expenses. In 21 states, the medically needy income level is below the level for SSI benefits (currently about $512 a month for an individual), and seven of those states have levels that are less than 50 percent of the SSI rate. A new federal rule promulgated last year gives spend-down states the option to allow individuals to meet the spend-down level while retaining more of their income for basic necessities, but few states have chosen this option.⁷³

As a result of the institutional bias of Title XIX, about three-fourths of Medicaid spending on long-term care is allocated to institutional services. For example, in fiscal year 1998, 58 percent of Medicaid long-term care expenditures were spent on nursing facility services, 17 percent on ICF/MR services, 15 percent on home- and community-based waivers, 6 percent on the personal care option, and 3 percent on home health care. Statistics for 2000 compiled by American Disabled for Attendant Programs Today (ADAPT) from data supplied by the MEDSTAT Group, the Health Care Financing Administration (HCFA) 64 data, Office of State Agency Financial Management, show only two changes in these percentages in 2000, a decrease from 17 to 15 percent for ICF/MR spending and an increase from 15 to 18 percent for spending on home- and community-based waivers. (In June 2001, HCFA changed its name to CMS.) Although Title XIX spending on home- and community-based services increased more than spending on institutional services between 1994 and 1999, from about $8 billion to $16 billion, spending on institutional services increased as well, from about $37 billion to about $46 billion. Medicaid spending on nursing facilities increased from $23.2 billion in 1990 to $44.4 billion in 2000, and the CMS projects that by the year 2001, Medicaid expenditures on nursing facilities will increase to $81.5 billion. Although the percentage of Medicaid funds spent on institutional services varies from state to state, all states except Oregon spent more on institutional services in 1999 than on home- and community-based services.⁷⁴

Some advocates indicated that the current delivery system only intensifies existing unmet needs-needs for long-term care at home and in the community for people with disabilities. A representative of the service provider organization ANCOR echoed the view that persons with disabilities are dependent on "a 40-year-old, outdated, federal long-term support program and financing mechanism, that is ... predicated on a ... statutory institutional bias, making home and community based services an option." This results in "inconsistent and disparate community services, not only between states but within the states."⁷⁵

Similarly, the National Association of State Mental Health Program Directors stated in a letter to the Secretary of Health and Human Services that "certain federal policies actually obstruct the efforts of states, providers, and consumers to enable individuals with mental illnesses to receive effective treatment and participate fully in community living. People with mental illnesses continue to face discrimination and other barriers in federal programs."⁷⁶

Title XIX Waivers and Optional Services: The Personal Care Option, Rehabilitation Option, Targeted Case Management Option, Home- and Community-Based Waivers, and Demonstration Waivers. These provisions of Title XIX offer states the option to fund home- and community-based services with Medicaid dollars. Especially in the case of the home- and community-based waiver, they afford enough flexibility to fund relatively innovative service models, such as self-determination and consumer-directed personal assistance. However, unlike services in a nursing facility that are required of any state that participates in Title XIX, these services do not have to be provided unless the state elects to do so. Thus, the availability of these services varies from one state to another, and the type of services that are funded also varies, sometimes dramatically.

The personal care option can be used to support a person with disabilities in any setting, including the person's own home. However, because Title XIX dollars cannot be used to pay family members for providing personal care or other services, states must receive a research and demonstration waiver to support programs that allow payments to spouses and family members.⁷⁷

The rehabilitation option can be used to fund various types of rehabilitative services for people with mental illnesses. According to 1998 data collected by the Bazelon Center for Mental Health Law, all but 10 states had elected to cover psychiatric rehabilitation services under this option. However, states that do provide the rehabilitation option often use a restricted definition of those activities.⁷⁸

The targeted case management option is one of the most flexible options available under Title XIX. The option can be targeted to a specific population, such as persons who are "chronically mentally ill," and does not have to be offered statewide. However, 23 states do not target intensive case management services to adults with mental illness.⁷⁹

Although the Title XIX home- and community-based services waiver-created by an amendment to the Social Security Act in 1981⁸⁰ -allows states great flexibility in supporting people with disabilities in the community, it has not leveled the playing field between institutional and community services, let alone eradicated the institutional bias within Title XIX. Because state governments do not recognize home- and community-based waiver services as an entitlement, as they do with nursing facility and ICF/MR services, waiting lists for waiver services are large in many states.⁸¹

Further, the waiver is used much more extensively for some groups of people with disabilities than for others. According to statistics released by the NIDRR in October 2001, there were 75 home- and community-based waivers for persons with mental retardation or developmental disabilities, serving a total of 216,570 persons in 1997.⁸² However, only two states had obtained home- and community-based waivers for persons with mental illnesses in 1997, serving a total of 626 persons.⁸³ By 2001, only two more mental health waivers had been granted.⁸⁴ The waiver is not often used to provide home- and community-based services to persons with serious mental illness. Only Colorado has a home- and community-based waiver focusing specifically on persons with serious mental illness. Colorado's mental health waiver serves adults who would otherwise be in a nursing facility, and most are older than 60.⁸⁵ As of 1999, only three states had obtained home- and community-based waivers for children with mental health needs and two more had applied.⁸⁶

Under a rule dating from the origins of the Medicaid program, Title XIX reimbursement is not available for services in psychiatric institutions or Institutions for Mental Diseases (IMDs) for persons between the ages of 22 and 64. The IMD exclusion poses a barrier to the development of community mental health services under home- and community-based services waivers authorized by Section 1915(c) of the Social Security Act, 42 U.S.C. § 1396n(c) because the exclusion effectively bars the granting of waivers to serve persons who absent the waiver would require services in an IMD, unless those persons are also eligible for services in a nursing facility. To obtain a 1915(c) waiver, states must demonstrate that the Title XIX expenditures on waiver services will offset the Title XIX dollars that otherwise would be spent on institutional services. Thus, because no Title XIX funds are available for services for adults under 64 in mental hospitals, the option is extremely difficult to use to enable adults with mental illness to move from hospitals or specialized nursing homes that are considered IMDs.⁸⁷ he statute has also been interpreted to prevent states from using Title XIX expenditures in Residential Treatment Facilities (RTFs) as a cost offset for home- and community-based waivers to serve children in community settings.⁸⁸ Because group homes for 16 or fewer persons are not considered IMDs under Title XIX, however, states may bill Medicaid under 42 U.S.C. § 1396a(i) for group home staff and other mental health services provided to group home residents.⁸⁹ States may also fund mental health and substance abuse services under the Section 1915(b) waiver, which allows states to waive Medicaid's freedom of choice provisions and require Medicaid beneficiaries to receive services through a managed care plan. Most states use Section 1915(b) only to fund acute mental health and substance abuse services; a few, such as Colorado, have used it to fund long-term services for persons with significant or persistent mental illness.⁹⁰

Although the IMD exclusion prevents federal funds from being used for home- and community-based waiver services to adults with mental illnesses, repealing the exclusion would merely create another incentive for institutionalization. Opponents of repealing the exclusion point out that little evidence exists that states would request home- and community-based waivers for IMD residents if the exclusion did not exist. For example, as of 2001, only three states had home- and community-based waivers for children and one had a waiver for adults who would be eligible for funding in an IMD.⁹¹

Mental Health Block Grant. The Mental Health Block Grant (MHBG) is the principal federal program designed to support community-based public mental health services and reduce reliance on expensive hospitalization. The program is flexible enough to fund a broad range of services, including respite for families and services to children whose parents have psychiatric disabilities. However, the Administration has proposed to fund the MHBG at the same level in FY 2002 as was available in FY 2001.⁹² This continues a pattern of significant decline in the amount of the block grant in real dollars, from more than $250 million in 1981 to less than $100 million in 1998.⁹³

The Child Health Insurance Program (CHIP). CHIP, enacted under the Balanced Budget Act of 1997,⁹⁴ provides insurance coverage for health care, including mental health services, for children in low-income families who were not, at the time of the statute's enactment, eligible for Medicaid under their state's eligibility rules. States can include CHIP-eligible children as an eligible group under Medicaid, create a separate health program for them, or both. The first option provides the most complete coverage, but only 23 states have adopted it.⁹⁵

Barriers within Medicare. The Medicare program, which provides health care benefits to older adults and persons with disabilities who receive benefits under the SSDI program, requires higher copayments (50% compared with 20%) and limitations on reimbursement for mental health services than for other health services, including for those who receive disability payments under the SSDI program.⁹⁶ The absence of prescription drug coverage under Medicare is a serious problem for mental health consumers who require medication as "a first-line defense against disabling symptoms."⁹⁷ Medicare provides no coverage for other services that are extremely important to persons with serious mental illness, including case management and psychosocial rehabilitation.

(g) Lack of Affordable or Physically Accessible Transportation

Some advocates consider lack of accessible transportation the single largest barrier to the inclusion of persons with disabilities in society because it prevents persons with disabilities from holding jobs, voting, accessing education or medical care, or participating in ordinary community activities.⁹⁸

(h) State Legislative Appropriations

State appropriations for mental health services (not including the federal Medicaid match that may be available for some services) have declined by 7 percent since 1990 and are significantly lower today than they were in 1955, when mental health services consisted primarily of custodial care. Spending fell from $16.5 billion to $11.5 billion in 1997 dollars, adjusted for inflation and population.⁹⁹ State appropriations for mental health services have fallen in relation to total state spending, state spending on health and welfare, and state spending on corrections. From 1990 to 1997, the proportion of all state spending allocated to mental health services fell from 2.12 to 1.81 percent, a decline of 13 percent. ¹⁰⁰

4. Resources and Services Models That Facilitate Community Integration

(a) General

We asked the persons with disabilities whom we interviewed, "What policies could the states enact that would help people who do not need to be institutionalized live in the community?" The responses strongly and consistently favored self-determination and consumer-directed models of service. The respondents showed an awareness of how federal housing programs need to change to foster community integration, as well as the obvious changes that need to occur in the Title XIX program. Many people from all disability groups urged the passage of MiCASSA. Our respondents also advocated better information and training for people with disabilities and support and funding for self-advocacy. The responses include the following:

• Fund self-advocacy and add self-advocacy organizations to the "Big 3" [Administration on Developmental Disabilities] programs [the University Affiliated Programs, the Protection and Advocacy systems, and the Developmental Disabilities Planning Councils]
• Get rid of red tape; change Medical Assistance (MA) rules and guidelines
• Pass MiCASSA
• Make self-determination federal law
• Set aside Section 8 vouchers for people who are ready to leave nursing homes
• Tie a rent subsidy program to persons leaving institutions
• Shift Section 811, which traditionally has been a project-based funding source, to individual vouchers
• Assist people to live in homes with support staff
• Stop putting money into institutions and instead put it into housing.
• Provide essential therapies and communication
• Change professional and bureaucratic attitudes
• Provide more direct information sessions for people with disabilities to learn their rights
• Train people in institutions to learn how to live in the community; have "buddy systems"
• Provide more home-based programs
• Provide vouchers for homeownership
• Provide peer support
• Have flexible emergency response systems
• Provide vouchers for homeownership
• Provide better salaries for personal assistance providers
• Eliminate programs' institutional bias
• Provide more supported-living apartments
• Have better pay for front-line staff
• Have mandatory training for staff to overcome the outdated attitude that "I'm here to take care of you"
• Have more flexibility with waivers
• Provide equitable support for people with disabilities entering the workforce
• Allow people to earn higher wages without influencing benefits
• Give money to people and allow them to use it for support from family and friends, not agencies
• Provide education to communities that it is okay to be different

Our respondents' emphasis on flexible funding and on self-determination, choice, and control over how service dollars are spent are reflected in service models based on self-determination, consumer direction, and direct control of service dollars. These models are not necessarily new-the Centers for Independent Living (CILs) and the mental health consumer/survivors' self-help movement have been providing consumer-controlled services for the past two decades. Indeed, most of these service models are strongly supported by scientific studies of their outcomes for consumers.

(b) Consumer-Directed Personal Assistance Services

Most personal assistance services provided through publicly funded programs have been provided through private service provider agencies. The "agency model" has the following features: (1) care delivered through a provider agency by caregivers who are supervised by medical professionals; (2) case management to coordinate services; and (3) public regulation of providers to ensure quality. Case managers or other professional staff members of the agency make important service delivery decisions.¹⁰¹ Thus, agency-delivered services tend to diminish, rather than enhance, control by disabled individuals over their lives. Yet there is evidence that being able to make personal choices regarding one's own life promotes health, well-being, and personal satisfaction.¹⁰² The success of consumer-directed personal assistance services, which place decisions about service delivery squarely in the hands of the consumer, is therefore not surprising.¹⁰³

Consumer-directed programs permit consumers to have a direct employer-employee relationship with their personal assistants. Health care professionals do not supervise the assistants. The consumer advertises for assistants and interviews, hires, trains, supervises, and, if necessary, fires them.¹⁰⁴

Many variations on this concept can be funded under existing Medicaid law and regulations.¹⁰⁵ The California In-Home Supportive Services (IHSS) program, which serves more than 200,000 consumers, of whom about half are 65 and older, is the largest and oldest consumer-directed care program in the United States. The program allows payments to a wide range of caregivers, including family and agency-managed caregivers. An evaluation of the IHSS program in the late 1990s showed that the consumers in the program who selected consumer-directed services had significantly greater levels of disability than the consumers who selected provider or agency-managed services. The consumer-directed model yielded superior results in satisfaction with services, empowerment, and quality of life. Yet the consumer-directed model was significantly more cost-effective than the agency-managed model, costing about 50 percent less for persons with similar disabilities. No evidence was found that consumer-directed services were less safe than agency-managed services. The survey gave no support to the view that consumer-directed services should be limited to those consumers, primarily younger adults, who are considered capable of hiring, firing, and giving direction to their personal assistants.¹⁰⁶

Demonstration programs supported by HHS under Section 1115 research and demonstration waivers take the concept further by placing cash to pay for services directly into the hands of consumers. For example, the Cash and Counseling Demonstration cosponsored by The Robert Wood Johnson Foundation and HHS provides consumers with a monthly allowance or budget based on what Medicaid otherwise would have paid to the beneficiary's regular service providers. Participants in the program develop their own care plans and may spend their allowances as they choose, as long as the services they purchase are related to their needs. The "counseling" part of the program provides counselors to explain tax, labor, and other rules and help consumers with paperwork.¹⁰⁷ Each participant in the program receives a cash allowance based on the number of hours of personal assistance services required and the number of hours of services actually delivered. Program participants can hire family, friends, professionals, or neighbors as personal assistants.¹⁰⁸

Arkansas is providing cash allowances and counseling to 2,242 persons under a demonstration waiver. People who are eligible for Title XIX personal care services are randomly assigned to a treatment group and a control group. The control group receives personal care through a provider agency; the treatment group receives a monthly cash allowance and services to help them use the allowance. Persons with cognitive impairments are eligible for the program. Early data indicate the treatment group participants have less nursing home use than the control group. At the beginning of the program, the state conducted systematic outreach to eligible persons, including a letter from the governor to all persons receiving personal care.¹⁰⁹ Similar programs have been initiated by Florida for 2,847 persons, including 1,000 children,¹¹⁰ and by New Jersey.¹¹¹

In a similar program in Oregon, the state agency deposits money electronically in the participant's bank account every month. The monthly allocation is based on an assessment of the person's functional status. CILs and Senior Services Centers provide training and technical assistance to participants. To conduct payroll tasks, either the participant or a designated surrogate must pass an exam. If the person or surrogate does not pass the exam, a fiscal intermediary is assigned to conduct payroll functions.¹¹²

Initial research on cash and counseling programs demonstrates a high level of satisfaction with cash and counseling programs. More than 80 percent of the participants in programs that have been evaluated reported that their quality of life had improved, whereas none considered that it had diminished. Satisfaction with the availability and flexibility of assistance was extremely high (95%).¹¹³

(c) Centers for Independent Living

The CILs, funded under Title VII, Part C, of the Rehabilitation Act of 1973, as amended, have been highly successful in assisting persons with significant physical disabilities to leave nursing facilities and in diverting nursing facility admissions. The National Council on Independent Living (NCIL) claims that in 1999, the most recent year for which figures are available, the CILs assisted 2,300 persons with disabilities to leave nursing facilities and kept almost 15,000 from being forced into nursing facilities, for an average cost of $643 per person in federal dollars. However, funding for the CILs grew by only $10 million in FY 2001.¹¹⁴

(d) Consumer-Controlled Agency Models

Advocates for persons with physical disabilities recognize that a consumer-controlled agency model is an appropriate choice for some consumers who may prefer to work with an agency that handles the administrative work of providing home and community support services. In the consumer-controlled agency model, the consumer would exercise maximum control over selecting, managing, and dismissing attendants, although in most cases the attendants would be employed by the agency and the agency would provide a pool of attendants from whom the consumer could select. The consumer could, if desired, become his or her own fiscal agent. Although the agency might determine the number of hours of service a consumer would receive on the basis of a functional assessment, the consumer would decide when, where, how, and at what times the services would be delivered. Services would include nonmedical support in instrumental activities of daily living. Unlicensed attendants would be allowed to perform health-related tasks through delegation or assignment. Training on attendant management would be available to consumers who desire it. Services would be available to those who can pay privately, those who can pay for some of the costs, and those whose incomes do not allow them to pay the costs at all.¹¹⁵

(e) Family Support

Family support is a familiar concept from developmental disabilities services, where experience has shown that modest, inexpensive home-based support services can enable people with significant disabilities to live at home with their families and avoid placement in an institution or group home. Some family support programs, such as those in Michigan, pay a monthly stipend to the family to spend as it chooses. These programs have been effective and are highly valued by families. Similarly, modest support services, such as respite care, support groups, training, education, and help in accessing existing community services can significantly enhance the ability of families to continue to care for elderly relatives at home and lessen the time spent in more expensive residential services, such as nursing facilities.¹¹⁶

(f) Consumer-Operated Programs

A list of essential community services for people with mental illnesses developed by the Surgeon General in 1999 includes the following:

• Case management
• Assertive community treatment
• Psychosocial rehabilitation services
• Community alternatives for crisis care
• Services for co-occurring substance abuse and serious mental illness
• Consumer self-help, consumer-operated programs, consumer advocacy
• Family self-help and advocacy
• Housing
• Income, education, and employment
• Health care
• Integrated service systems¹¹⁷

Mental health consumers have emphasized the benefits of consumer-directed initiatives. The National Summit of Mental Health Consumers and Survivors held in Portland, Oregon, in August 1999 identified a number of alternatives to traditional mental health services whose common characteristic is that they are consumer-operated and -directed and provide peer-to-peer support. Those services include the following:

• Peer counseling
• Employment assistance
• Drop-in centers
• Wilderness camping
• Housing assistance
• Holistic and herbal medicine
• Spirituality

The group agreed that the function of these services is "to provide inspiration, hope, and personal experience to peers, provide education and training, and an array of consumer-run services in safe, coercion-free environments, as an integral part of a full system of resources."¹¹⁸ The group recommended that the program and staff certification and credentialing standards for these programs should be designed by consumers for consumers on the basis of their unique experience, knowledge, and research and integrated into the publicly funded system of services.¹¹⁹ Participants in the summit agreed emphatically that forced treatment, including involuntary outpatient treatment, is ineffective, drives people away from voluntary treatment, and would not be necessary if there were appropriate community services available.¹²⁰

The principles of service articulated by the National Summit echo the principles outlined in a 1992 report of the Federal Task Force on Homelessness and Severe Mental Illness and are based on research and practice:

• Access, empowerment, and responsibility. Mental health consumers should be empowered to gain access to mainstream resources, and their dignity must be respected.
• Diversity and flexibility. Services should be culturally competent, individualized, and sufficiently flexible to respond to changing needs and preferences.
• Peer, family, and natural supports. Consumers and their allies must engage in planning, delivery, monitoring, and evaluation of services.
• Local, state, and federal participation. Services should be organized locally but coordinated at the state level and supported with leadership and appropriate fiscal incentives at the federal level.¹²¹

The effectiveness of consumer-directed initiatives at reducing hospitalization of persons with mental illnesses is strongly supported by a small but growing body of research. For example, a large-scale multimethod study of Consumer/Survivor Development Initiative (CSDI) projects in Canada in 1995 found that average inpatient use declined from 48 days to four days. Admissions to hospitals for psychiatric treatment dropped from a mean of three admissions to a mean of 0.6 admissions. Another Canadian study published in 1995 found that nearly 60 percent of the participants in a self-help group had not been rehospitalized and that those who had experienced a significant reduction in hospital days. A much earlier study in New York in 1984 found that persons discharged from psychiatric hospitals who were randomly assigned to participate in a self-help program required half as much rehospitalization 10 months after discharge as a comparable group who did not participate in the self-help program.¹²²

Drop-in centers are one of the most widespread service models created by the mental health consumer movement. The drop-in center was conceived as a way to meet the need for a safe place for people moving from state mental health institutions to find companionship, feel welcome, and gain acceptance. Staffed entirely by consumers, drop-in centers may provide advocacy-training, skills training, and information about housing, benefits, and other issues of interest to consumers as well as social programs. Drop-in centers, such as the program operated by AD Lib Inc., an Independent Living Center in Pittsfield, Massachusetts, have developed into true cross-disability programs whose members include persons with physical disabilities, psychiatric disabilities, retardation, chemical dependency, and learning disabilities.¹²³

(g) Self-determination

Self-determination is a model in which persons with disabilities and a circle of support control the funds that pay for their own services, either directly or through a fiscal intermediary. The use of fiscal intermediaries allows self-determination programs to use Medicaid funding without a research and demonstration waiver. Self-determination, a term that originated in the developmental disabilities service system in Monadnock, New Hampshire in the early 1990s, was an effort to answer the question, "How would a system of supports look if people with disabilities and their circle of friends, or network, were truly in charge of their own services, if they achieved self- determination?"¹²⁴ The Monadnock model, which has been replicated in many states under the National Self-Determination Initiative supported by The Robert Wood Johnson Foundation, is based on four fundamental principles:

Freedom: The ability for individuals with freely chosen family and/or friends to plan a life with necessary support rather than to purchase a program;

Authority: The ability for a person with a disability (with a social support network or circle if needed) to control a certain sum of dollars in order to purchase these supports;

Support: The arranging of resources and personnel-both formal and informal-that will assist an individual with a disability to live a life in the community rich in community association and contribution; and

Responsibility: The acceptance of a valued role in a person's community through competitive employment, organizational affiliations, spiritual development, and general caring for others in the community, as well as accountability for spending public dollars in ways that is life enhancing for persons with disabilities.¹²⁵

Evaluations of self-determination programs, including the evaluation of the original Monadnock project, have been highly positive. The persons supported in the program experienced significant gains in self-determination, quality of life, personal satisfaction, improvement in challenging behavior and vocational behavior, and individualized practices in the home.¹²⁶

(h) Supported Employment

Successful employment programs combine education, rapid placement in a real job setting ("place, then train"), strong support from a job coach or other employment specialist to adapt to and sustain the job, and support on and off the job from friends, peers, and coworkers.¹²⁷ Research has shown improved vocational outcomes from supported employment to people with significant disabilities who traditionally have not worked in real jobs.¹²⁸

Innovative approaches to the employment of persons with mental illnesses include New York's practice of making available, through a request for proposals process, a portion of the savings from discharging persons from psychiatric institutions to the counties. Counties have responded by creating employment programs, including supported employment and clubhouse models. In Florida, a consortium of behavioral health provides job training, placement, and post-employment support with a combination of mental health and labor department funds.¹²⁹

(i) Intensive Case Management

Research suggests that intensive case management, including the programs known as Assertive Community Treatment (ACT) and Assertive Case Management (ACM),¹³⁰ is consistently superior to traditional case management in reducing inpatient stays among persons with serious mental illness.¹³¹ Indeed, the evidence of outcomes of traditional case management, in which the case manager assesses needs and deficits and refers the person to services, has been so negative that the model is not recommended as "best practice."¹³² Intensive case management combines high frequency of contact, small caseloads, proactive outreach to consumers, 24-hour availability, and supporting consumers where they live rather than in an office-based practice. ACT, a descendent of the Training in Community Living model developed by Leonard Stein in Madison, Wisconsin, in the 1970s provides all these features of intensive case management along with a multidisciplinary team approach in which case management is provided by teams of psychiatrists, social workers, nurses, vocational specialists, and other professionals.

Research has shown that intensive case management methods are effective in reducing hospitalization and achieving cost savings, even taking into account the cost of intensive case management and reduced caseloads. For example, a 1993 longitudinal study that tracked people who had been discharged from a state hospital and received ACT using a team approach found a 28 percent decrease in hospital bed days used by the participants by the third year of the study and an "impressive" cost savings for the target area. A 1993 study of the results of an ACT program developed for consumers in a rural community found significant reduction in hospital admissions and length of hospital stay and a 52 percent reduction in the annual cost per person, taking into account the costs of hospitalization, the costs of traditional services, and the costs of the ACT program. Using a powerful research design, a Canadian study in 1996 found more striking results. In that study, all persons referred to a psychiatric hospital during a 12-month period were randomly assigned either to an assertive community rehabilitation program using a team approach modeled on ACT or to a hospital-based case management program. The mean number of hospital days for the experimental group was 39 compared to 256 for the control group. In each month of the study, more and more of the consumers in the treatment group were living in the community, and they scored higher on objective measures of quality of life.¹³³

Mental health consumers advocate strongly that using ACT and Program of Assertive Community Treatment (PACT) services to force consumers into involuntary outpatient treatment should never be done, because forced treatment is ineffective, drives people away from voluntary treatment, and would not be necessary if there were appropriate community services available.¹³⁴ It is possible, and certainly preferable, to provide the benefits of ACT on a voluntary basis.

(j) MiCASSA

The Medicaid Community-based Attendant Services and Supports Act (MiCASSA), introduced but not yet enacted in the past several Congresses and supported overwhelmingly by the disability rights movement, is important to note here because it would end the institutional bias of Title XIX by allowing individuals eligible for nursing facility or ICF/MR services the election to receive community-based attendant services and support. Services covered by the Act would include assistance with activities of daily living, including personal care, household chores, shopping, managing finances, using the telephone, participating in community activities, supervision, and teaching community living skills. MiCASSA services would require the following:

• They would be provided in the most integrated setting appropriate to the needs of the individual.
• They would be based on functional need, rather than diagnosis or age.
• They would be provided in home or community settings, including school, work, recreation, or religious settings.
• They would be selected, managed, and controlled by the consumer of the services.
• They would be supplemented with backup and emergency attendant services.
• They would be furnished according to a service plan agreed to by the consumer.
• They would be accompanied by voluntary training on selecting, managing, and dismissing attendants.

MiCASSA would allow consumers to choose among various consumer-controlled service delivery models, including vouchers, direct cash payments, fiscal agents, and agency providers.

A person unable to direct his or her own care may be assisted by an authorized representative. The bill would also cover transition costs from a nursing facility or ICF/MR to a home setting; for example, it would cover rent and utility deposits, bedding, basic kitchen supplies, and other necessities and would allow an enhanced federal match of up to 90 percent for persons whose costs exceed 150 percent of average nursing home costs.¹³⁵ The IMD exclusion would not create a barrier to eligibility for persons with mental illnesses.

In Olmstead v. L.C.,¹³⁶ the U.S. Supreme Court, in interpreting the ADA¹³⁷ and its implementing regulation 28 C.F.R. § 41.51(d),¹³⁸ held that "[u]njustified isolation ... is properly regarded as discrimination based on disability."¹³⁹ The logical consequence, the Court held, is that in appropriate circumstances, "proscription of discrimination may require placement of persons with mental disabilities in community settings rather than institutions."¹⁴⁰ Those circumstances exist, the Court further held, when the institutionalized person is "qualified" to live in a community setting "with or without reasonable modifications" to the government entity's rules, policies, or practices."¹⁴¹

Olmstead v. L.C. was brought in U.S. District Court in Georgia on May 11, 1995, by Lois Curtis,¹⁴² a woman with disabilities who was institutionalized at Georgia Regional Hospital at Atlanta (GRH-A), a state mental hospital.¹⁴³ Ms. Curtis challenged her continued confinement in the institution despite the professional judgment of her psychiatric treatment team that she no longer required inpatient treatment but instead needed community residential and habilitation services.¹⁴⁴ Ms. Curtis alleged violations of her rights under the Due Process clause of the Fourteenth Amendment and Title II of the ADA.¹⁴⁵ She sought declaratory relief and an injunction releasing her from GRH-A and providing her with appropriate treatment by qualified professionals.¹⁴⁶ A consent order entered in July 1995 discharged Ms. Curtis to a state institution for persons with retardation, from which she was discharged in February 1996 to a community support program known as "Nyasha Hands." However, the transfer did not resolve the case because Ms. Curtis contended that she was not receiving appropriate services to support her in the community.¹⁴⁷ Meanwhile, Elaine Wilson, who was also confined at GRH-A and whose claims were similar to those raised by Ms. Curtis, was granted leave to intervene in the case.¹⁴⁸ Both plaintiffs and defendants filed motions for summary judgment, asking the court to decide the case on the uncontested facts.¹⁴⁹

The defendants claimed that Ms. Curtis' claims were moot because she was already receiving services in a community setting. They argued that they had not violated Ms. Wilson's rights because she was denied community placement because of inadequate funding, not because of discrimination based on her disability. They further argued that they had not violated Ms. Wilson's rights under the Due Process clause because the decision to treat her at GRH-A was based on the exercise of professional judgment.¹⁵⁰

The district court held, first, that Ms. Curtis' claims were not moot, although she was now receiving the services she sought in the community, because her claims were "capable of repetition, yet evading review."¹⁵¹ The court therefore reached the merits of both plaintiffs' claims.

Reciting the familiar standard for proving discrimination under the ADA, the district court stated that to prove a violation of Title II of the Act, the plaintiffs must show (1) that they are "qualified individual[s] with a disability"; (2) that they were excluded from participation in or denied the benefits of a public entity's services or programs or were otherwise discriminated against; and (3)_that such discrimination was "by reason of" their disability.¹⁵² Applying the standard, the court found that "there is no dispute that plaintiffs are qualified individuals with a disability" and that they could be placed in the community. The defendants disputed whether Ms. Wilson should live in the community, but the court held that "the qualified experts [were] unanimous" in their opinion that she could.¹⁵³

The defendants next argued that the two women were denied community services because of inadequate funding and therefore that the plaintiffs had failed to prove that they had been discriminated against by reason of their disability. The court rejected this contention and held that "under the ADA, unnecessary institutional segregation of the disabled constitutes discrimination per se, which cannot be justified by a lack of funding."¹⁵⁴

The district court based its holding on an analysis of the text of the statute, its legislative history, and the Title II regulation promulgated by the U.S. Attorney General. The court found that the statute made clear, in 42 U.S.C. § 12101(a)(2), (3), and (5), that "segregation" of persons with disabilities is a form of discrimination that Congress intended to eliminate.¹⁵⁵ The court also found that the legislative history of the ADA is "replete" with statements reflecting Congress' intent to prohibit unnecessary segregation.¹⁵⁶ Finally, the court held that the Title II regulation stating "a public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities" "plainly" prohibits discrimination.¹⁵⁷ The court also noted that the regulation requires public entities to make reasonable modifications in existing programs to avoid discrimination: "A public entity shall make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program, or activity."¹⁵⁸

Although the defendants claimed that all available funds were being used to provide services to other persons with disabilities, the district court held that it would not "fundamentally alter" the defendants' services. The court based its holding on the following factors: First, the defendants had existing programs that provided services to persons like the plaintiffs. Second, it was undisputed that the defendants could provide services to the plaintiffs at "considerably less cost" than in the institution.¹⁵⁹ The court granted summary judgment for the plaintiffs-including a declaratory relief-and ordered the defendants to place Elaine Wilson in the community and provide Lois Curtis with "all appropriate services necessary" to maintain her placement in the community.¹⁶⁰

On appeal, the Court of Appeals for the Eleventh Circuit affirmed¹⁶¹ the district court's judgment that the defendants had discriminated against the plaintiffs "by confining them in a segregated institution rather than an integrated community-based program." However, the court of appeals remanded the case to the district court for further findings concerning the state's defense that providing community services to the plaintiffs would "fundamentally alter" the nature of the states' services.¹⁶²

As it had in the district court, the state contended that the plaintiffs had not been denied community placement because of their disability. The state argued that the ADA requires a comparison of its treatment of persons with disabilities as against that of persons without disabilities and that Ms. Curtis and Ms. Wilson had not shown that they had been denied community services that were available to persons without disabilities. In short, the state argued, "Title II of the ADA affords protection to individuals with disabilities who receive public services designed only for individuals with disabilities."¹⁶³

The court rejected this argument summarily. First, the court reasoned that the state had to concede that the plaintiffs were confined at GRH-A because of their disabilities. Second, the court reasoned that the state had pointed to no legal authority that supported its reading of Title II; rather, the overwhelming authority in "the plain language of Title II of the ADA, its legislative history, the Attorney General's Title II regulations, and the Justice Department's consistent interpretation of those regulations" supported Ms. Curtis' and Ms. Wilson's position.¹⁶⁴

The court of appeals considered first the proper interpretation of the regulations promulgated by the Attorney General to implement Title II of the ADA and noted that because Congress entrusted this task to the Attorney General and directed him to define the discrimination prohibited by Title II, the regulation must be "given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute."¹⁶⁵ Not only does the regulation require that services be administered in the most integrated setting but also the Attorney General had consistently adopted the interpretation that the most integrated setting was one that "enables individuals with disabilities to interact with non-disabled persons to the fullest extent possible," both in the Appendix to the regulation itself and in the decision to "participat[e] in this and similar litigation."¹⁶⁶ Thus, the court held, institutional confinement of a person with disabilities who can live in the community violated "the core principle underlying the ADA's integration mandate" because the opportunity to interact with nondisabled persons is present in only limited circumstances in a state institution, such as GRH-A.

Having found that the district court had properly interpreted the regulation, the court of appeals then considered the validity of the regulation, that is, whether the integration regulation was "manifestly contrary" to the statute. The court found that it was fully consistent with the statute because, in enacting the ADA, Congress had directed the Attorney General to promulgate regulations consistent with the coordination regulations promulgated to implement Section 504 of the Rehabilitation Act of 1973,¹⁶⁷ which contain an integration mandate essentially identical to the language of 28 C.F.R. § 35.130(d). The 504 regulations require recipients of federal funds to "administer programs and activities in the most integrated setting appropriate to the needs of qualified handicapped persons."¹⁶⁸ In effect, the court of appeals held, Congress "ratified" and voiced its approval of the Section 504 coordination regulations, and this ratification was therefore binding on the court.¹⁶⁹

Like the district court, the court of appeals held that the regulation's consistency with the statute was demonstrated by the plain language of the Congressional findings and by the ADA's legislative history. Both demonstrate that "Congress ought to eliminate the segregation of individuals with disabilities in passing the ADA."¹⁷⁰

The court rejected the state's argument that the plaintiffs were not discriminated against "by reason of [their] disability" because they sought services that were not provided to persons without disabilities. "Underlying the ADA's prohibitions is the notion that individuals with disabilities must be accorded reasonable accommodations not offered to other persons in order to ensure that individuals with disabilities enjoy 'equality of opportunity, full participation, independent living, and economic self-sufficiency.'"¹⁷¹ Thus, no showing of differential treatment is required.¹⁷² Indeed, the court found that the state's "indifference to [the plaintiffs'] needs-manifested by their refusal to place them in the community while recognizing the propriety of such a placement-is exactly the kind of cond