Club Nova Clubhouse photo
Members hang out on the porch of Club Nova in Carrboro. Photo courtesy of Club Nova.

A $50 million provision tucked into the budget would go to addressing long-standing problems with housing for people with mental health disabilities.

By Rose Hoban

This story has been updated with additional quotes.

As members of the state House of Representatives consider their budget for the upcoming year, questions still linger about how North Carolina will resolve long-standing problems with housing for people with mental health issues.

The budget proposed by the House Republican majority contains $50 million designated for a new “transitions to community living” program for people with mental health disabilities. Twenty percent of the funds go to creating community resources for people who need housing this year, while the other 80 percent of the money goes to owners of adult care homes, and to providing personal care services for residents.

“This is a backwards approach,” said Fred Waddle, chief policy officer for the state chapter of Easter Seals/ UCP. “There’s $10 million to transition people to community settings, but then they’re spending $40 million to refurbish or change adult care homes.”

The chair of the House oversight committee on Health and Human Services explained that the $10 million for housing was what Department leaders had asked for.

“What this $10.3 million would be, is we have a preliminary figure from the department, essentially a down payment on the program that would provide a number of slots over a period of time to provide housing support and wraparound services… for individuals who have mental illness who can live in the community,” said Rep. Nelson Dollar (R-Cary), during Wednesday night’s budget debate.

The cost of housing

Concerns about housing for people with mental health problems date back  to 2010, when Disability Rights North Carolina wrote to the US Department of Justice, complaining about the state’s use of adult care homes to house thousands of people with mental health disabilities. Disability Rights alleged the state’s way of housing these mental health consumers was “biased” towards putting people in institutions, such as adult care homes, rather than helping them move out into the community, as required by law.

The US Department of Justice decided to investigate the situation and eventually agreed with Disability Rights’ assessment last summer. The state and the US DOJ have been negotiating a settlement since last summer in an effort to avoid legal action by the DOJ.

Other states with similar problems, such as Virginia and Georgia, have ended up agreeing to multi-year settlements, sometimes costing hundreds of millions of dollars.

But details on a possible settlement in North Carolina have been sketchy. The first indication of a number appeared in language included in the House budget bill, which was introduced on Tuesday.

The $10 million allocation for creating housing is a “step in the right direction,” according to an email sent by Vicki Smith, head of Disability Rights NC, an organization that advocates for people with mental health disabilities.

Club Nova photo
Advocates would like to see more independent housing for people with mental health disabilities, like the units created by Club Nova in Carrboro. Photo courtesy of Club Nova.

Smith’s organization has estimated at least 6,000 people currently live in adult care homes who should be somewhere else.

“At this rate, we’re looking at a decade to get all those people housed,” said Disability Rights policy chief Corye Dunn.

“It’s not just about the 6,000 people who are there now. It’s about all the people who come after them and who would be pushed into an adult care home because it’s the only option,” Dunn said. “So we have to close the front door and create resources in the community for people to go to.”

According to Julie Henry, a spokeswoman with the Department of Health and Human Services, it’s still not clear how many units of housing the money would create. She said the $10 million allocation is probably the first of a multi-year agreement with the US DOJ that would be intended to create housing for people with mental health problems.

Rep. Dollar said late Wednesday evening the money would go towards building a number of units “in the low hundreds range.”

“Those initial funds would cover assessments and other costs associated with getting the initiative underway,” he said.

Other states, such as Tennessee, have demonstrated that it doesn’t take a lot of money to create housing options for people with mental health problems. That state has spent less than $30 million over the past 12 years to create close to 10,000 units of housing, ranging from mortgage subsidies to buy houses, to financing rooms in group living situations where support services help people with mental health problems become more independent.

No clear answers

DHHS’s Julie Henry also said there’s not a clear answer about what the $39.7 million included in the House budget for adult care homes would be used for.

According to Rep. Dollar, some of that money will go to address concerns about the state’s program to provide personal care services for people in adult care homes, and for people with disabilities living in their own homes. But he did not offer any specifics and said those answers would be addressed by a blue ribbon commission created in the budget bill.

Rep. Nelson Dollar (R-Cary)
Rep. Nelson Dollar (R-Cary) Image courtesy of the NC General Assembly website

On the floor of the House Wednesday night, Rep. Verla Insko (D-Chapel Hill) questioned the money in the provision.

“I spoke to several bill drafters, they didn’t really understand this. Even the Secretary (of DHHS) is unsure of what this money is going to do,” she said.

For years, the state has paid for personal care services at different rates for people in adult care homes versus in their own homes, requiring people to need a higher level of care in order to stay at home.

Advocates have long complained about this “institutional bias.”  Recently the Centers for Medicare and Medicaid Services told North Carolina this practice violated Medicaid rules and would have to be resolved.

Dollar said late Wednesday that part of the $39 million would go to “ways in which we can ultimately resolve the issues surrounding the state’s PCS program.”

“The $39.7 million is geared more toward the second part of the fiscal year between January and July to provide a cushion as we untie the Gordian knot of personal care services, equalize services, whether it’s in home or in facility, equalize the components of the various programs,” Dollar said in response to Insko’s questions.

“There just aren’t enough details here, we really don’t know what this money is for,” Insko said in response to Dollar.

“Money from the settlement is still going to go to use adult care homes as holding tanks for people for another five years,” said Lou Wilson, lobbyist for the N.C. Association of Long Term Care Facilities. “But that’s not new… they’ve been doing that for five decades.”

Personal care

Officials from DHHS had requested the blessing of state lawmakers to ask Medicaid for a waiver that would allow North Carolina to create a personal care services program to apply equally to all people with disabilities. The “i waiver” would provide for personal care for people who need help with more than two activities of daily living – activities such as bathing or preparing food or managing their medications – no matter where they live.

Health officials say this program would resolve CMS’s concerns about the state’s institutional bias in the provision of care.

DHHS officials also estimated some 9,000 additional people around the state would become eligible for the personal care services if the state uses Medicaid money to pay for the personal care program. They have estimated it would cost the state an additional $15 million to provide those services as part of the Medicaid program, with the federal government providing matching dollars.

Federal officials have given North Carolina until January to get a personal care service program in place.

But observers say they think the House budget doesn’t include the waiver program.

“If I understand what I think I understand, they would use some of that money for people in adult care homes who don’t meet the two activities of daily living requirement,” Wilson said. “They wouldn’t leave them out in the cold.”

New standards

Dollar also said some of the $39.7 million in the House budget would be used to help adult care homes, which have long had a vacancy rate topping 20 percent industry-wide.

“We are looking at options for addressing this that will require additional state investment in order to insure that the adult care home industry stays healthy,” Dollar said.

“We are establishing, by passage of this provision, a blue ribbon commission to address both housing issues in the community and transition issues involving adult care homes,” he said.

The NC House of Representatives met late into the evening last night, debating the budget bill.
The NC House of Representatives met late into the evening last night, debating the budget bill.

Advocates, and now the DOJ, have said that adult care homes are too institutional for housing people with disabilities. But in North Carolina, there’s often been no other housing option for someone coming out of a psychiatric hospital.

Now, the federal Centers for Medicare and Medicaid Services is in the process of creating new standards for home and community based services that include facilities such as adult care homes. The standards set rules for making residences more “home-like”, that means providing residents with access to food and visitors, and giving people a choice in who they share a room with. Following the rules will be sufficient for facilities to comply with the Americans with Disabilities Act and Supreme Court rulings around living situations for people with disabilities.

Leaders in the adult care home industry have opposed the standards.

“Some of it is good… I have no problem with things like telephone access,” said Ed Weeks, after a meeting in March. Weeks owns and operates several facilities in Cumberland County.

“Some of it has no ability to be done,” he said.

Weeks said, for example, owners worry about residents having food or refrigerators in their rooms.

“We’ve had residents with small refrigerators in their rooms, and then the health inspector comes and cites us for it,” Weeks said.

But even if the industry makes changes, many advocates doubt adult care homes can ever be made to be “home-like” and will continue to be primarily institutional in nature.

“Most adult care homes are set up more like nursing homes,” said Waddle, from Easter Seals/ UCP. He pointed out most states are moving towards creating small community-based facilities and supported apartments for people with disabilities.

“Instead of putting more beds into the community, we’re preserving this institutional bias that North Carolina has always had,” he said.

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Rose Hoban

Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...

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