Changes to rules about who can receive personal care services may mean thousands with mental health disabilities could lose their places of residence when the rules go into effect.

By Rose Hoban

As many as 12,000 people with intellectual, developmental and severe mental health disabilities are in danger of having to leave their homes after January 1. That could happen if new rules on the assistance they receive in group homes are allowed to go into effect.

At a loud and emotional meeting sponsored by the Wake County chapter of the National Alliance for Mental Illness (NAMI) on Aug. 27, group-home residents were joined in a packed room at a local church by group-home owners and mental health advocates to complain that new rules around Medicaid reimbursement could mean that many homes must close their doors.

“There’s no one in the Department of Health and Human Services that likes what’s happening right now and what we have to implement,” said Tara Larson, chief of clinical operations for the state Medicaid program, who spoke on a panel at the meeting.

Both Larson and Jim Jarrard, acting head of the Division of Mental Health, Developmental Disabilities and Substance Abuse Services, called the situation a “perfect storm.”

Vicki Smith, executive director of Disability Rights North Carolina, followed up on that analogy.

“We’ve talked about a perfect storm, and you know what happened in the end of that movie?” Smith asked after Larson and Jarrard spoke.

“They died. The perfect storm results in death.”

Storm was a long time brewing

The looming situation is the outcome of years of foot-dragging by state lawmakers in providing assistance for people with disabilities to live in their communities that matches that available for people living in institutions.

Lightning Storm
State officials and advocates alike have described the confluence of events around Medicaid personal care services a “perfect storm.” Photo Biso, via Wikimedia Creative Commons

For years, North Carolina has allowed adult care homes – originally designed to house frail senior citizens – to also house people with mental health problems.

The adult care homes were restricted from providing treatment or therapeutic help to the mentally ill living there, so in effect, those people ended up warehoused alongside the elderly.

Two years ago, Disability Rights North Carolina complained about the situation to the U.S. Department of Justice. The DOJ investigated and eventually agreed that North Carolina was improperly using the adult care homes to house people with disabilities. The DOJ found this to be in violation of the Americans with Disabilities Act and North Carolina has been instructed to rectify the situation.

Many people with mental health problems ended up in adult care homes simply because they needed a place to stay and some help with personal care services, such as assistance with medications or getting meals.

Medicaid has been paying for those personal care services. The catch has been that in order to receive benefits and remain in their own homes, people with mental health problems were required to need assistance with two or more of these activities.

If they lived in an adult care home, they were only required to need assistance with one activity. That difference was vital.

The result is that many people with mental illness might have been able to live in their own communities if given that small bit of help – and if not for the profound lack of supported housing available around the state.

So, with no other way to get the assistance they needed, thousands of people with mental health problems ended up in adult care homes.

A similar discrepancy has existed in group homes – facilities that are restricted to a maximum of nine people with mental health, intellectual or developmental disabilities.

No one has challenged the appropriateness of group homes for people with developmental or mental health disabilities. In these homes, staff usually have received training in helping residents become more independent over time. But people in group homes also were only required to need help with one activity of daily living in order to receive Medicaid reimbursement.

Now North Carolina has been told by federal officials that the state Medicaid program must treat everyone equally – whether they live in an adult care home, a group home or the community.

So during the last legislative session, state lawmakers tightened standards around the eligibility rules for personal care services. Now everyone – in adult care homes, group homes or the community – will be required to need help with three activities of daily living. Lawmakers said they set the standards higher to prevent people from coming out of the “woodwork” to claim the benefits.

The General Assembly also provided close to $39 million to adult care homes to help with the transition.

But what lawmakers overlooked in tightening the rules is that people living in group homes would also be affected, and there’s no money to help those homes in this year’s budget.

“I asked a lot of questions about that $39 million, and group homes were never mentioned in the discussions I had in the General Assembly,” said Rep. Verla Insko (D-Chapel Hill), who attended last week’s meeting. “So I can guess it was the adult care home industry that was doing the negotiation, and they just didn’t mention the group homes.”

Deadline looms

The new Medicaid personal care eligibility rules go into effect on Jan 1 of next year, but lawmakers don’t reconvene until later that month.

Image by helix84, courtesy Wikimedia Creative Commons Credit: Helix84, courtesy Wikimedia Creative Commons

“By then, people will have received their termination of service notifications,” said Julia Adams, assistant director of governmental affairs for the Arc of North Carolina. The Arc advocates for people with developmental disabilities and runs a number of group homes.

“A hundred percent of people in mental health group homes will not qualify and 86 to 90 percent of the people in developmental disability group homes won’t qualify for the new personal care services,” Adams said.

“A lot of these group homes that will be negatively impacted are run by very small not-for-profits where that personal care service reimbursement is vital to keep the operation going,” Adams said.

State Medicaid officials estimate that the new rules will leave at least 12,000 people living in group homes without any reimbursement for their care.

And Adams said that while many people need the services, they often don’t need them in the way the new provisions require.

Under the new rules, care provided has to be completely hands on. But Adams explained that many people with developmental disabilities don’t need to be bathed, for example, they just need to be talked through the process.

“You constantly reinforce the activity, but you don’t do it for them,” Adams explained. “Maybe Jane needs help with dressing. You don’t dress her; you coach her: ‘OK, Jane; now that you have your pants on, pull them above your knees.’ Many people with developmental disabilities get stuck in the middle of the process of dressing or bathing without someone coaching them.”

Adams said people from her organization tried to warn lawmakers that the new rules would be a problem.

“When we saw the language in the special provision, we warned them that group homes had to be in there, so individuals in groups homes could access that $39 million, and we were shot down,” Adams said. “And now that lawmakers understand what’s happened, they’re stuck, because they’re not in session, and the clock is ticking.”

“When I say this is a colossal screw up, I mean this is a colossal screw up,” she concluded. “You can quote me on that.”

Any shelters from the storm?

During last week’s NAMI meeting, Disability Rights head Vicki Smith offered one solution to the problem that could be accomplished before the January deadline – that the state drop its appeal of a ruling this spring that would have frozen things the way they were, with the inequities in place.

U.S. District Court Judge Terence Boyle issued a preliminary injunction prohibiting the state from moving forward with its changes to personal care services.

But the state appealed that decision and received a stay of the preliminary injunction, allowing the process to move forward.

“What we need is time, and how we get the time is if the state would withdraw their appeal, which would lift the stay,” Smith told the crowd. “The preliminary injunction would be in place and it would all be frozen and we could work with the General Assembly when they come back into session in January.”

But Jim Jarrard said he doubted that solution was likely.

“I understand what Vicki’s saying. But from the other side, I understand why our guys had to fight that,” Jarrard said.

He did, though, express some hope.

“In my experience, it’s in those moments where it seems most chaotic, seems most in turmoil, that the best change can come, because you can finally get people around a table saying the current solution doesn’t work right now,” Jarrard said.

But he declined to speculate on what the solution might be.

The Arc’s Adams said her organization is advising anyone who gets a termination of service letter from Medicaid to immediately appeal the decision, which will provide a 90-day extension.

“If we can get everyone to appeal, that will drag the time clock out,” Adams said. “But for some people, that ‘no’ will come back really fast.”

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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...

6 replies on “Thousands of Disabled Could End Up Homeless Due to State Medicaid Rule Changes”

  1. This coupled with all the other incomprehensible things that have happened in NC since the reform is the reason after 25 years of service I got out!

  2. Our lawmakers need to spend some time in group homes volunteering – working one on one with the residents. Then they would realize how vital PCS are to them. Find the $ to protect this deserving & wonderful population!

  3. My 80 year-old mentally handicapped brother-in-law received a Notice of Termination of services at the assisted living facility where he has lived for 11 years. He is not mentally ill; he simply has a low IQ. He also has terminal prostate cancer and is diabetic. We are devastated. The assisted living facility has appealed the decision but advised my husband that he may lose.
    We have been told that he would easily qualify for for assisted or nursing care if he weren’t mentally handicapped. Somehow, I doubt that the laws were ever meant for someone in his situation.

  4. a shame and on this morning I notice n.c is footing the bill for voter i.d at 10 bucks a pop, stupid ass people

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