Moving ahead with Olmstead: to comply with the Americans with Disabilities Act, states are working hard to find community placements for people with disabilities.

Elaine Wilson and Lois Curtis wanted their freedom. After living in a state psychiatric hospital for several years, they wanted Georgia to provide their long-term care in the community. They felt isolated and knew they were physically and mentally capable of living in society with certain supports, despite mental retardation and schizophrenia. The state said it couldn't do that. There were no services available, and a tight budget limited Georgia's ability to accommodate their requests.

So, with the Americans with Disabilities Act (ADA) in hand, Elaine and Lois marched all the way to the U.S. Supreme Court to plead their case, Olmstead vs. L.C. (1999), and won. The Court stated that isolation of people with disabilities is a form of discrimination under the ADA. States must provide services in the most integrated setting possible, appropriate to the needs of qualified people with disabilities. The ruling directs states to make "reasonable modifications" in programs and activities. Modifications that would "fundamentally alter" the nature of services, programs or activities are not required.

As a result, the federal government encourages states to plan for reforms not only in the health arena, but also in transportation, housing, education and other social supports that can help people with disabilities live in a community.

An unfunded judicial mandate of this magnitude creates a daunting task for state policymakers. Three years have passed, and states continue to struggle with how to interpret and apply the Olmstead decision.

MEDICAID'S INSTITUTIONAL BIAS

Because Medicaid is the primary funder for long-term care and covers a large number of people with disabilities, many states focused their initial efforts on how Olmstead affects Medicaid budgets. "Medicaid's the appropriate starting point," says Allan Bergman, president and CEO of the Brain Injury Association of America. "There are significant Medicaid dollars currently supporting people with disabilities, and policymakers need to look there first."

In fact, more than 35 percent of all Medicaid spending goes to longterm care services. Institutions get the lion's share--about 71 percent in 2001. Many refer to this lopsided distribution as the "institutional bias." Although every state has a variety of waivers to provide community-based services, the vast majority of funds continue to support nursing homes or other institutional settings.

"Medicaid creates an inherent institutional bias because it provides an entitlement to a skilled nursing facility, while allowing states the option to offer personal care services or home and community-based services through a waiver. Olmstead moves away from that bias and presumes people should be in the community first," Bergman says.

STATES FOCUS ON CHOICE

Under the Court decision, states can no longer provide long-term care only in an institution, if a person's needs can be met in the community, with a few exceptions. Senator Bernest Cain, chair of Oklahoma's Senate Human Resources Committee and co-chair of the new Olmstead committee, sees the need to offer different options. "I've always seen Olmstead as an opportunity to give people choices. Let them make their own decisions about the kind of services they need and want. But, those choices need to be in an educated environment, where people fully understand all their options."

Following a 2001 interim study, Oklahoma passed legislation that created a legislative Olmstead committee. Forty-two states plus the District of Columbia have some similar type of task force or committee. The Oklahoma Legislature--and at least seven other legislatures--play a leadership role in Olmstead decisions. "I've worked hard to get people involved, but felt we should take the lead," Cain says. The committee includes a wide variety of interests including legislators, state agencies, disability advocates and nursing home representatives.

The committee is working toward an Olmstead plan to move certain people out of institutions and into the community. The Court said that a state could comply by creating "a comprehensive, effectively working plan" to show how it will fully integrate people with disabilities into society. More than half the states will have some type of plan by the end of the year. Some of them probably won't fit the criteria set forth by the federal government, but they serve as a starting point. "Things can get better if a plan is in place," Cain says.

Bergman agrees, "Developing a state plan is very important and it can serve as the best defense any state can have. Of course, if it's not funded, its not effectively working."

North Dakota is another state that's making Olmstead planning a priority. Governor John Hoeven established a commission in 2000, but planning didn't kick into high gear until last year. The commission must create its plan this year. Although legislators participate on the commission, the executive branch is taking the lead.

Still, the legislature stays involved and tracks the commission's progress. "Because of a lawsuit in the 1980s," says Senator Judy Lee, commission member and chair of the Senate Human Services Committee, "we've addressed many of these issues over the last 20 years. Our homes and schools for people with mental retardation and developmental disabilities are in fairly good shape. Our biggest issues surround nursing homes with the elderly and younger people with physical disabilities. We also need to address the needs of the mentally ill," Lee says. "Parity is a real issue here."

Senator Lee's concerns about parity are shared in many states because Olmstead applies to all people with disabilities, regardless of age or. disability.

North Dakota also faces challenges as a rural state. "I think the single most important issue during this year's session will be the delivery of all types of services--from education to health care. We can't place individuals in a rural community without access to health care providers, home health care or basic services like transportation and a fully stocked grocery store," says Lee.

While North Dakota and Oklahoma recently revved up their Olmstead activities, many other states continue to build their planning around long-standing efforts to strengthen community services. Texas has worked on these issues for many years, and now the programs and efforts are receiving even more attention. The state's plan addresses budgets, timelines, worker transitions and many other topics involved with providing community-based services to people with disabilities.

One of Texas' most recent policy innovations was Rider 37, which passed during the 2001 legislative session. This appropriations rider actually ties the long-term care money to the person receiving the services. If someone chooses to leave an institution, the money that funded the person's care follows the person into the community care budget or vice versa. A total of 1,189 people had moved out of nursing homes to live in the community using Rider 37 as of Nov. 1, 2002. Sixty-nine percent, or 823 people, were over age 65; the rest were younger people with physical disabilities.

Addie Horn, director of long-term care services and supports for the Texas Health and Human Services Commission follows the progress of Rider 37. "Rider 37 provides the ultimate freedom of choice because the money is already there. It doesn't require new expenditures." Horn says. Rider 37 will be up for review this session.

Texas also passed legislation in 2001 that established three community pilot programs--one rural, one urban and one mixed. Texas Representative Elliott Naishtat supported the pilot programs and successfully sponsored another bill that requires the Health and Human Services Commission to study various ways to redirect state money into community-based services. "Texas has made efforts to give people with disabilities an opportunity to live in the community and have meaningful lives," Naishtat says. "We need to figure out how we can redirect funds to maximize their impact. It's important that individuals and state personnel are aware that those who currently live in institutions have every right to be in the community if that is what they want, their doctors agree and it doesn't break the bank." By law, the aggregate costs for waiver services cannot exceed the cost of institutional services. States may save money when placing certain individuals, who need less than 24-hour medical assistance, into the community . Even with all its efforts, Texas continues to struggle with its waiting list of more than 40,000 citizens who want to receive publicly funded community-based services.

LEGISLATION HELPS

Most states continue to create plans and assess current long-term care capabilities, although a few have moved forward with legislation. In 2001, Maryland expanded its home and community-based waiver income limitation to 300 percent of the Supplemental Security Income level to serve more people. Missouri tackled the health care workforce shortage for home health aides and certified nursing assistants by raising wages for those who assist people with mental retardation and developmental disabilities. In addition, the state increased funding for training staff and added a new personal care benefit to the Medicaid plan. All these efforts helped keep people with disabilities in the community.

Budget shortfalls, a weak economy and terrorism changed the political landscape in 2002, but a few states found low cost opportunities to keep the Olmstead process alive. Many states included efforts to improve consumer education and outreach, and legislation reflected those issues, as well. Maryland wanted to increase consumers' knowledge about Olmstead and the different state-funded long-term care options. Under the new law, nursing homes must provide a one-page information sheet about home and community-based services to all their residents. Florida and Mississippi passed laws that help track current numbers of nursing home residents, as well as those in the community with mental illness or developmental disabilities who may be at risk of institutionalization.

TOUGH DECISIONS AND CHALLENGES

Because Olmstead involves various groups and many issues from home health care to transportation, states need to assess their entire long-term care systems. The Court's guidance without too many specifics gives states the opportunity to create long-term care reforms that fit their needs. But the decision is complex, and states face great challenges in complying.

For North Dakota, the answers become blurred when policymakers look at individual cases. "It's not an easy answer. For some, community placement may not be appropriate because it could create a different kind of isolation and fear," Lee says. "We have long, cold winters, and some of our elderly will stay in their homes all season by themselves rather than brave the ice and cold. For some of these people, the socialization of an assisted living facility may be more fulfilling. People are at different stages in life, and programs must adapt to different needs."

Olmstead does not require states to shut down every long-term care institution. The Court specifically stated that "nothing in the ADA... condones termination of institutional settings for persons unable to handle or benefit from community settings." The decision offers individuals the right and opportunity to choose where they want to live. "If you believe in choice, then you need to respect each individual's decision, as long as they, their family or guardian have all the necessary information to make that decision," Horn says.

ECONOMIC IMPACT

State-funded institutions employ hundreds of people and, in some areas, serve as the economic stronghold for the community. Greater emphasis on community alternatives, a key element of Olmstead can strike fear in the hearts of state employees and legislators who see it as a road to unemployment and economic despair for a particular area.

"These are legitimate concerns," says Bergman. "This is not about moving one group and pitting it against another. All of the stakeholders need to be included in the planning, so workforce issues can be discussed and career opportunities developed. The transition of the state workers needs to be directly addressed, especially with the current workforce shortage of certified nursing assistants and home health aides. Workforce issues are very significant and states need to look at programs in places where it has been done successfully."

Oklahoma Senator Cain shares these concerns. "Transitions will be part of the plan, but we need to be creative, so it's not hard on state employees. I've always gone to bat for these folks, trying to find options. But, I'm leery of the talk that we'll be able to save every state job."

BUDGETS

Despite any effort to move Olmstead implementation forward, no state can ignore the drooping economy and how it's forcing states to cinch their budget belts even tighter. Budget shortfalls and Medicaid overruns continue to plague the country. The 2002 election brought great change in some states, and new leaders may try to solve budget problems differently. Texas has an anticipated $5 billion to $12 billion deficit, and the Republicans have taken control of the Legislature for the first time since Reconstruction. "It will be hard to keep programs going. Human services may move to the bottom of the ladder," Naishtat says.

Health and human services currently accounts for one-third of the Texas budget and Representative Arlene Wohlgemuth agrees that funding will be an issue. "Even though everything is on the table and every program will be scrutinized, we need to be careful about undoing what we've done," she says. "Texas has many valuable programs.

"Health and human services is one of the biggest items in our budget, second only to education. As we look to streamline our programs, bigger items will be expected to make bigger adjustments."

Oklahoma faces similar issues. "We've always got a gun to our head," says Cain, "but that doesn't keep us from trying." Cain hopes Oklahoma can develop short- and long-term goals that will keep the process moving forward, even in tight fiscal times. "We struggle because we must react to what's in front of us. Education and corrections are at our doorstep, but I've seen things go down and come back. We can't limit our dreams because of finances. Progress can be made over time."

RELATED ARTICLE: FEDS STEP FORWARD WITH ASSISTANCE

While states continue to struggle financially, the feds have stepped forward with grant money to help apply Olmstead. As part of the administration's New Freedom Initiative, the Centers for Medicare and Medicaid Services (CMS) distributed more than $120 million in grants during 2001 and 2002. These grants help states increase community-based integration for people with disabilities and improve their current services. Nearly every state has received at least one grant. To learn more about them go to http//cms.hhs.gov /systemschange/default.asp

MEDICAID AND LONG-TERM CARE

Medicaid for long-term care topped $75 billion in 2001, approximately 35 percent of total Medicaid spending. Of this amount, 71 percent, or $53 billion, funded long-term care in nursing homes and intermediate care facilities for the mentally retarded. The remaining $22 billion went to community-based care for people who would otherwise be in an institution.

COST DOES MATTER

The U.S. Supreme Court was not clear when it addressed the issue of state responsibility and implementation costs. "The state's responsibility, once it provides community-based treatment to qualified people with disabilities, is not boundless," the Court said. In fact, the case leaves the states some flexibility to take into account the "available resources to the state and the needs of other state citizens with disabilities." States do not need to "fundamentally alter" their publicly funded long-term care programs.

The court took the extra step to suggest two ways a state can show compliance with Olmstead.

* A state may develop a comprehensive, effective working plan, including timetables, and progress reports, for placing qualified people in community-based settings.

* A state may maintain a waiting list for community-based services, but the list must move at a reasonable pace and must not be motivated by a desire to fill institutions.

Proving what constitutes a "fundamental alteration" or "reasonable pace" will be a challenge for the states.

Johanna M. Donlin is one of NCSL'S expert on the Olmstead decision.