States, advocates prepare for Supreme Court battle over funding for home- and community-based services
ADA requires states to expand choice to disabled and mentally retarded, say lower courts
The U.S. Supreme Court is set this spring to rule on a case that, if upheld, would force states to provide expensive home- and community-based services for the mentally disabled. Some 24 states have either filed amicus briefs or joined the appeal to stop the expansion, which they say would add astronomical costs to their Medicaid budgets.
Many state governments say letting the lower court rulings stand would devastate their Medicaid budgets. In Florida alone, officials estimate that compliance with the lower court rulings would cost as much as $1 billion annually.
The high court will hear oral arguments in the case of L.C. v. Olmstead, brought by two Georgia women with mental retardation and psychiatric conditions who were patients in a state psychiatric hospital. The women claim discrimination under the Americans With Disabilities Act (ADA). Doctors at the hospital agreed they were appropriate for discharge into community programs, but no state money was available for such services.
The women won their case in the U.S. District Court. The state of Georgia appealed the District Court decision to the 11th Circuit Court of Appeals, which has jurisdiction over Florida, Georgia, and Alabama. The appellate court upheld the decision.
Georgia now has asked the U.S. Supreme Court to decide whether the public services portion of the ADA "compels the state to provide treatment and habilitation for mentally disabled persons in a community placement, when appropriate treatment and habilitation can also be provided to them in a State mental institution."
The issue is becoming more pressing in the United States as those who are mentally retarded live longer and their aging parents worry about how their adult children will be cared for. The Arc, the nation’s leading advocacy group for the retarded, estimates that nearly 250,000 mentally retarded people are on waiting lists for either residential or day services. Advocates say the ADA provides a legal means of forcing states to act.
At issue is interpretation of a regulation adopted by the U.S. Justice Department to enforce Title II of the ADA. It says a public entity "shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities." The department has said the regulation means community placement of institutional residents is required when treating professionals in the state institutions recommend such placement.
The state is required under the ADA to make such expenditures, said the 11th Circuit Court, unless community placement is so "unreasonable given the demands of the State’s mental health budget that it would fundamentally alter the service it provides."
With so many states claiming the expansion of services would bankrupt their budgets, it would seem simple to claim such placements as "unreasonable." However, the courts have set stringent tests for making such claims.
The court said the following three factors must be considered:
• the reasonableness of the expenditures in light of the entire budget for mental health;
• whether it would be unreasonable to require the state to expand its waiver program to minimize the financial burden;
• whether any difference in the cost of providing community-based services will lessen the state’s burden.
Sally K. Richardson, director of the Health Care Financing Administration’s Center for Medicaid and State Operations, wrote to all state Medicaid directors last July alerting them to L.C. v. Olmstead and two other Medicaid cases related to the ADA. Ms. Richardson pointed out that Attorney General Janet Reno has said "states have an obligation to provide services to people with disabilities in the most integrated setting appropriate to their needs." The department maintains that the "most integrated setting" standard applies to all state programs, including Medicaid programs.
Many states, expecting the ruling to exert a significant drain on their budgets, are resisting the effort to mandate increased home- and community-based services. Twenty-two states joined with Georgia in asking the Supreme Court to review L.C. v. Olmstead. In their brief, they said that if applied elsewhere, the 11th Circuit’s reasoning "will necessarily affect the manner in which services are provided to individuals with disabilities in any group setting. It is self-evident that if a state spends enough money, virtually any person can safely and appropriately be served in his or her home (or in the most integrated community setting). However, legitimate fiscal reality limits the ability of states to adequately fund community-based placements for all individuals with disabilities."
So far, 14 states have joined in an amicus brief to the Supreme Court on the case, making the argument that the federal government should not interfere in states’ operation of mental health and developmental disability systems. Advocates for the disabled were able to persuade 12 of the original 22 states that supported the appeal to the Supreme Court to withdraw their support and not oppose the 11th Circuit decision.
The Washington, DC-based Bazelon Center for Mental Health Law, which organized an amicus brief in the 11th Circuit, says it is calling on advocacy organizations to file briefs as friends of the court. Specifically, the Bazelon Center wants disability advocates to help assure the justices that many states already are committed to providing services in the community instead of in institutions and that they can comply with the integration mandate at a reasonable cost.
This is particularly important to advocates because a number of organizations representing public officials, including the National Governors Association, the National Conference of State Legislatures, and the Conference of State Governments are marshalling their forces to challenge the lower courts’ decisions. They have formed the State and Local Legal Center, which has filed an amicus brief on behalf of its members with the Supreme Court on the Olmstead case.
In documents posted on the Internet, the Bazelon Center says the State and Local Legal Center’s brief, and the list of organizations supporting it, create the impression that every state, county, and city in the country backs the State of Georgia in its appeal. Bazelon is calling on advocates to "make clear that the State and Local Legal Center’s brief does not speak for all states, counties, and cities—especially not for states that have withdrawn from the states’ amicus brief." The advocates maintain that community-based care is less expensive than institutional care, and that funding can be shifted to follow any migration from residential to home or community settings.
Observers in a number of states have said the Supreme Court may be planning to overturn the lower courts’ rulings. Their reasoning is that in cases such as this, the justices usually will not hear an appeal unless there have been conflicts in lower court decisions. Because all lower court decisions to date have agreed with each other, they suspect that the Supreme Court may have agreed to hear the Olmstead case because justices believe the 11th Circuit decision should be overturned.
One of the states most interested in the Supreme Court’s decision is Florida, which has been under pressure for several years to move developmentally disabled and mentally ill people from segregated state institutions to integrated community settings.
Florida Gov. Jeb Bush recently proposed increasing funding for the developmentally disabled by $210 million and restructuring how services are provided and money is spent. He has called for a system that is "consumer-driven, family-oriented, and choice-based."
Too little, too late?
Advocates say Bush’s proposal is a step in the right direction but still too little, too late. A number of cases already are pending in U.S. district courts in Florida. Miami attorney Steven Weinger is litigating two class-action suits against the state. The first involves clients who entered a home- and community-based services waiver program only to find out later the state had imposed an arbitrary funding cap on individuals based on their needs when they entered the program. Clients were told that if they needed additional services, they would have to give up services they already were receiving. Thus, clients who were able to prove a need for services such as physical therapy could not receive the services because the state wouldn’t fund them. In addition, Mr. Weinger says, the state put unrealistic limits on certain services, such as providing no more than a 10-month supply of diapers in a 12-month period.
In the second suit, Mr. Weinger is challenging Florida’s practice of fixing its budget for home and community-based services, which entails refusing to add new recipients unless someone dies or moves elsewhere. Mr. Weinger says this creates a waiting list for such services of several thousand people.
The 11th Circuit has ruled that every individual with a developmental disability must be offered appropriate services within 90 days, a requirement Florida says would cost an estimated $750 million to $1 billion annually. Mr. Weinger says he has a motion for contempt pending against the state for refusing to implement the Circuit Court order.
Olmstead does not mean everyone must be treated in a community-based setting, Mr. Weinger says, but that residents must be allowed to choose the setting in which they believe they will be best served. Those who would rather be in an institution have that option under the Circuit Court ruling, he says.
Several other states have committed themselves to programs to reduce waiting lists and expand services. Wisconsin has a waiver to combine Medicare and Medicaid funding streams for its Wisconsin Partnership and improve outcomes by combining community long-term support with a health component. New York proposes to spend $230 million over five years to cut its waiting list of 6,500, and Maryland has a multimillion-dollar plan.
The seriousness of the problem perhaps is best seen in New Jersey. In 1994, New Jersey voters approved a $160 million bond issue, with half the funds earmarked to reduce home and community-based waiting lists. In four years, the waiting list has grown from 4,000 to 5,214 as more families taking care of adult children seek help. State officials now say $323 million will be needed to address the problem.
Contact the Judge David L. Bazelon Center for Mental Health Law at (202) 467-5730, and Mr. Weinger at (305) 444-0060.