• Mission & Governance
• Services Overview
• How to Get Involved
• Standing Committees
• NCSL Foundation

• Issue Areas: A-Z
• State-Federal Relations
• NCSL Standing Committees
• News from D.C. and the States

• About State Legislatures
• Elections, Campaigns & Redistricting
• NCSL's StateConnect Directory
• Web Sites

• Online Guide to NCSL Services
• Staff Sections and Networks
• Meetings & Professional Development
• Staff Directories

• Meetings Calendar
• Online Registration
• Meetings Home Page
• Legislative Summit

• Bookstore
• State Legislatures Magazine
• NCSL's StateConnect Directory

THE STATES' RESPONSE TO THE OLMSTEAD DECISION:
HOW ARE STATES COMPLYING?

Preface and Acknowledgments

Introduction and Methodology

Findings

Conclusion

Appendix A: State Contacts

Appendix B: State Findings

Preface and Acknowledgments

The States' Response to Olmstead is a cooperative effort between NCSL and AARP's Public Policy Institute. Through generous financial support from AARP, this report is being provided as a free resource to state legislators, legislative staff and others through NCSL's website at http://www.ncsl.org/. This paper is the third in a series of NCSL reports designed to better understand the effects of the Olmstead ruling on state policy. NCSL's first 50-state survey, published on NCSL's Web site in March 2001, provided an overview of the choices states were making as they acted on their obligations under the Olmstead decision. Building on this work, NCSL issued a second study in January 2002 that reviewed state Olmstead planning activities. This paper follows up on the preceding two papers with an additional focus on implementation.

NCSL thanks AARP for its continued support of this state survey series on Olmstead. AARP has generously supported our research series during the past three years. NCSL is indebted to project officer Enid Kassner, with AARP's Public Policy Institute, for her support and guidance. NCSL also thanks AARP's John Luehrs, Van Ellet and Elizabeth Clemmer for their input.

Introduction and Methodology

This report categorizes current Olmstead implementation activities, including legislative initiatives, structural changes and implementation barriers, and analyzes Olmstead plans that were released in 2002.

The report reflects activity as of December 2002. NCSL initially surveyed each state's main contact(s) for Olmstead activities during the summer of 2002. During the telephone interview, survey respondents provided information about the following topics: Olmstead planning activities, consumer involvement, lawsuits, implementation timelines, major recommendations and priorities, strategies for implementing the recommendations, legislation, costs and funding. When states reported issuance of plans or formation of commissions between August and December, analysts made a second round of calls in the fall to obtain updated information.

The survey findings for each state are contained in appendix A. These state summaries are presented as brief sketches of state activities. A list of state contacts appears in appendix B. A summary of 2002 state legislation is located in appendix C.

Findings

Implementation

Building on plans developed in 2000 or 2001, a number of states began the process of implementing Olmstead plan recommendations. While redesigning service delivery systems is never easy, the most challenging state fiscal environment in at least a decade forced many states to pull back from their original implementation schedules. With lagging state revenues, many states used federal systems change grants to jumpstart their implementation efforts.

Several states enacted legislation to build up components of their community-based care systems, including formalizing task forces, strengthening information and referral and bolstering consumer directed-care programs. Lawsuits growing out of the Olmstead ruling are receiving attention in several states, but their impact on policy is not yet clear.

As the old saying goes, timing is everything. Many Olmstead plans were issued as state officials were releasing their budget shortfall numbers. Almost all states are experiencing revenue shortfalls that are likely to have profound effects on state services.

In addition to the shortfalls resulting from declining revenues, states have experienced escalating Medicaid costs. According to the National Association of State Budget Officers (NASBO), Medicaid spending grew by more than 13 percent between 2001 and 2002, the fastest rate of growth since 1992. Thus, state legislatures and other state officials have been grappling to contain Medicaid costs rather than expand services. Most Olmstead plans contend that expansion is required, at least in the short run, to meet the growing need for community-based long-term care services.

Another effect of state budgets has been on state agency staff. Some of our state contacts no longer are employed by the state. Many of our new contacts stated that the lack of state staff to coordinate Olmstead planning efforts is a major barrier. Several states have hiring freezes on new state employees.

Although some recommendations do not require significant revenues, new state appropriations will be needed to implement many of the plan recommendations, especially those related to increasing the number of waiver slots or residential settings that are available for people with disabilities.

Significant new appropriations to serve more people within the community, however, are highly unlikely in most states. State fiscal conditions continue to deteriorate. A November 2002 NCSL survey revealed that more than half the states are facing gaps in their fiscal year (FY) 2003 budgets. More than half the states report that expenditures are exceeding budgeted levels. Many fiscal experts predict dismal forecasts for FY 2004, as well.

Recent federal grant and technical assistance opportunities have been, perhaps, the most promising development. CMS awarded millions of dollars in new grants in 2001 and 2002 to 48 states-every state except Arizona and South Dakota-and one territory to develop programs for people with disabilities and long-term illnesses.

These awards have allowed states to implement some of their recommendations. States are using these grants to:

• Move eligible individuals from nursing facilities into the community;
• Improve personal assistance services that are consumer-directed and/or offer maximum individual control; and
• Help design and implement effective and enduring improvements in community long-term support systems to enable children and adults of any age who have a disability or long-term illness to live and participate in their communities.

CMS also funded a National Technical Assistance Exchange for Community Living initiative to provide training and information to states, consumers, families, and other agencies and organizations.

Task Forces. State legislatures in California, Delaware, New Hampshire, New Mexico, New York, Oklahoma, Vermont and Virginia enacted legislation to convene Olmstead-related commissions. Much of this legislation specifies the membership of the task force and directs the task force to provide its findings by a certain date.

Consumer Direction. State legislatures in Colorado, Florida and Maine directed state agencies to implement consumer-directed care programs where consumers can hire their own family members and friends to provide long-term care services using government funds.

• Colorado would allow senior citizens to receive a direct payment through vouchers to purchase qualified services. The state plans to use state and federal money-roughly $40,000 from state coffers and $77,000 in federal funds-to implement the consumer-directed care program.
• Florida would allow people enrolled in the Medicaid home and community-based waiver program to hire a service provider of their choice.
• Maine calls for the implementation of state-funded and Medicaid-funded consumer-directed personal care assistance services for adults with disabilities.

Information, Referral and Assessment. State legislatures in Florida, Maryland and Mississippi addressed the need for consumers to receive timely, readily accessible information on home and community-based services and the need for comprehensive evaluation procedures that provide for the least restrictive placements.

Subject to appropriations, Florida plans to establish a statewide 211 Network, which consumers will be able to dial on their telephone to access information and referral services.

Maryland law now requires social workers to provide nursing home residents a one-page information sheet that explains the availability of services under home and community-based waiver programs. The law also requires that, when a resident indicates an interest in receiving services in the community, the case manager at the local department of social services must refer the resident within 10 days to those who can provide information and benefit applications.

Mississippi law authorizes its mental health department to develop a consumer-friendly, single point of intake and referral for individuals with mental illness, mental retardation, developmental disabilities, or alcohol or substance abuse. The law also requires that consumers and their families be part of the assessment and planning process when appropriate. Finally, the new Mississippi law calls for the appropriate institutional, hospital or community care setting for individuals, and may provide for the least restrictive placement if the treating professional believes such a setting is appropriate, if the person affected or their parent or legal guardian wants such services, and if the department can do so with a reasonable modification of the program without creating a fundamental alternation of the program.

A detailed listing of 2002 legislation is included in appendix C.

Several state contacts said that Olmstead-related lawsuits-some of which have been settled-have been important factors in their long-term care planning and implementation efforts. Lawsuits in roughly half of the states are either pending or have recently been settled.

The lawsuits typically involve people with developmental disabilities who are seeking admission to home and community-based waiver programs. Lawsuits have focused on waiting lists, access to services and placement in integrated settings. However, their effect on the availability of community services is not yet clear.

Planning

As 2002 ended, the vast majority of states were engaged in structured planning efforts around Olmstead. Most states have published their plans or information on their ongoing planning processes on the Internet. Olmstead planning efforts are aimed at creating more choices in health care, housing, employment and long term supports for individuals with a broad range of disabilities. Strengthening consumer-directed care is a priority for many states. Some states revised their plans during the past year to reflect new areas of emphasis.

A major strategy for complying with the Olmstead decision is either through the establishment of a new task force or the assignment of an existing long-term care commission to conduct Olmstead-related planning or coordination activities. Governors, legislators and agency heads took the lead in either creating the commissions or directing existing task forces to work on these issues.

• Among the commissions created by executive order were those in Arkansas, Indiana, Maryland, Missouri, North Dakota, Ohio, South Carolina, Texas and West Virginia.
• Some states have created work groups or task forces through state legislation. Among these states are California, Mississippi, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Vermont and Virginia.
• Most task forces have developed under the leadership of state agency directors. Among these are Arizona, Georgia, Hawaii, Iowa, Illinois, Maine, Mississippi (which also has state legislation), North Carolina, Utah, Washington, Wyoming and the District of Columbia.

The scope and breadth of task force activities do not appear to be related to their method of establishment. However, it is notable that several of the most recent task forces were established through legislation that was spearheaded by advocates in the disability communities.

Although the Supreme Court case involved two women with both mental illness and developmental disabilities, the Olmstead decision has broad application to all disabled people, regardless of age. Thus, most states are assessing their systems of care for people with developmental disabilities, people with physical disabilities, people with mental illness and older people with disabilities. In addition, Olmstead activity focuses on various subgroups, including 1) institutional residents whose needs can be appropriately met in the community, 2) residents in community-based settings who require institutional care, and 3) people who reside in the community and are at risk for institutionalization because of the absence of care.

Some of the task forces consist entirely of state agency personnel organized in to work groups, while others have members from nearly every stakeholder group in the state. Many of the task forces held hearings and meetings across the state and gathered feedback from consumer representatives. Many state task forces have Web sites that provide useful information about their Olmstead-related activities (see exhibit 3).

Most state task forces wrote plans that set forth goals and strategies for serving people with disabilities in the least restrictive settings. States, however, are in various stages of the planning process. Currently, 21 states have issued plans or reports, and at least 12 plan to issue them during 2003 (see exhibit 4). These numbers differ from those cited in NCSL's January 2002 report because some states have revised their draft plans or delayed the release of their plans in order to seek further comments and make revisions.

• Ten states-Arizona, Indiana (also issued an updated interim report in December 2002, final report due June 2003), Iowa, Maryland, Mississippi, Missouri, Montana, Ohio, South Carolina and Texas (also issued an update in December 2002)-issued plans or reports in late 2000 or in 2001. A detailed analysis of these plans was presented in NCSL's 2002 paper. Appendix A includes brief write-ups of each of these states.
• Eleven states-Arkansas, Connecticut, Delaware (a commission report also due in March 2003), Hawaii, Illinois, Kentucky, Massachusetts (phase one), Utah, Washington, Wisconsin and Wyoming-released plans and reports in 2002. An analysis of each of these plans is presented in appendix A.
• At least 12 states-Alabama (January 2003), California (April 2003), Colorado (2003), Louisiana (January 2003), Maine (March 2003), Nevada (June 2003), New Jersey (January 2003), New Mexico (2003), North Carolina (2003), Oklahoma (July 2003), Virginia (August 2003) and West Virginia (2003)-are working on their reports and plan to issue them during the year.
• At least four jurisdictions-Alaska, Florida, Pennsylvania and the District of Columbia-have task forces but do not intend to write comprehensive plans or reports. Their efforts are focused on projects related to Olmstead.
• The remaining six states with task forces did not specify whether they would write a plan or identify a date for release of a plan.

As was true of plans released in previous years, most Olmstead plans released in 2002 are significant efforts. They categorize services and programs within existing long-term care systems, identify the numbers of people who are receiving services both in institutions and in the community, and recommend reforms that focus on consumer choice and dignity.

Like the plans released in 2001, the 2002 plans focus on the following strategies:

• Helping people make the transition from institutions into the community;
• Promoting affordable and accessible housing;
• Improving the recruitment and retention of direct care workers;
• Providing information and referral as well as family-centered assessments;
• Allowing funding to follow the individual rather than the providers;
• Reducing the waiting lists for home and community-based services;
• Increasing employment opportunities for people with disabilities;
• Enhancing data collection activities and systems;
• Improving transportation that complies with the Americans with Disabilities Act (ADA) requirements; and
• Assuring quality of care based on outcomes.

Transitions. Plans released in 2002 indicate that states are seeking to shift more people from institutions-primarily nursing homes-into the community and to divert unnecessary institutional placements during hospital discharge planning. The federal Centers for Medicare and Medicaid Services (CMS) has encouraged this strategy and provided funding through nursing home transition grants awarded to 27 states since 1998. During this time, both the size of the grants and the number of grantees have grown, from $160,000 to $175,000 to each of four states in year one to $550,000 to $800,000 to each of 11 states in 2002.

Housing. Almost all the plans released in 2002 came to the same conclusion-that the lack of accessible, affordable housing is one of the most significant barriers to serving more people with disabilities in the community. To that end, the Connecticut Long-Term Care Committee, for example, recommended improving the reporting of accessible housing units to its Accessible Housing Registry and exploring the possibility of providing tax incentives to encourage new homes or substantial renovations to meet minimum accessibility standards.

Workforce. Paraprofessional workers such as nursing assistants, home health aides and personal care attendants provide the bulk of hands-on care that many people with disabilities need in order to remain at home or in community-like environments. Vacancies and high turnover rates reportedly range from 40 percent to more than 100 percent annually among these workers. This direct care worker shortage results from low wages, nonexistent or poor benefits, limited advancement opportunities, and lack of respect for the important services they provide. It is no wonder that the task forces issued many recommendations to help remedy this situation. For example, Hawaii's commission recommended identifying existing funds for workforce training and education, developing a unified community-living workforce development plan, and establishing a public-private partnership to provide professional liability insurance for community living personnel.

Information, Referral and Assessments. An important vehicle to ensure that people receive services in the most appropriate setting of their choice is through information, assessment and referral services. All the task forces stressed the importance of empowering consumers to make informed choices regardless of where they live. Two of the six objectives in Wisconsin's plan outline strategies for informed choice, assessment and decision-making. Likewise, state officials in Wisconsin have been working to provide long-term care information through their resource centers. The resource centers offer voluntary, preadmission consultation and counseling services to people who have long-term care needs. The federal government also has approved its new long-term care functional screening device, which is designed to standardize the nursing facility level of care determination process. Utah's Division of Aging and Adult Services recommended developing an on-line, statewide resource directory. Utah's Division of Mental Health recommended adopting standardized preferred practice guidelines in the assessment of adults to ensure statewide consistency in the delivery of mental health services, with the goal of providing a comprehensive assessment to identify the least restrictive level of treatment for each individual.

Funding to Follow the Individual. State Medicaid programs are mandated to pay for nursing home services and a set of federal standards (often bolstered by state standards) governs the operation of such facilities. Except for home health services, home and community-based services are established under state option and exhibit great variation in availability and scope across the states. Some state task forces noted the "institutional bias" of required coverage for institutional care and options coverage for community-based care.

One strategy for increasing the availability of funds to support community-based care is to allow funds that are devoted to the care of institutional residents to follow them into the community. Arkansas recommended allowing Medicaid nursing home residents to receive a cash allowance to support their residence in their own homes. The state noted that converting 5 percent of funds that support clients in facilities into funds that support their community residence would channel more than $20 million into community settings.

Waivers. The Supreme Court suggested that a state could establish compliance with the ADA if it created a comprehensive, effective working plan for placing qualified people in less restrictive settings and made a good faith effort to reduce the waiting lists for community-based services at a reasonable pace. To ensure that matching federal Medicaid funds are available to them, states are suggesting provision of more home and community-based services through the 1915(c) waiver programs.

Employment. For younger people with disabilities, full integration into the community often may mean seeking paid employment. States are recognizing the value of adapting their Medicaid eligibility policies to support continued coverage for people with disabilities who work. In addition, several states are interested in making personal assistance services available to people in the workplace to support continued employment. In Washington, for example, a cross-agency workgroup has been working with multiple partners-including the Social Security Administration and employment providers-to plan for the implementation of the Ticket To Work and Work Incentives Improvement Act. The Medical Assistance Administration in Washington has chosen to change its Medicaid eligibility rules through the Medicaid Buy-In program to support the competitive employment of individuals with disabilities. Working people with disabilities make premium payments for their Medicaid coverage based on a sliding income scale. Likewise, as one of its goals, the Kentucky plan stressed that the employment rate for people with disabilities should be increased through the creation of a seamless system of employment supports.

Data Collection. As a first step in creating their plans, state commissions estimated the number of people with disabilities in the state who need services now and in the future and identified those at risk of needing services. They also assessed current long-term care services and identified gaps in service availability. This task led many state task forces to recognize the need for better data systems and information management infrastructures. For example, the Wyoming plan recommends that the Division of Aging and its Project OUT database track assessment time, the length of time on a waiting list, client satisfaction levels, and complaints and grievances.

Transportation. Several task forces acknowledged that serving people in the community is nearly impossible in some areas-particularly in remote and rural areas-because individuals lack accessible transportation. Hawaii, for example, recommended developing a unified, community-based living transportation plan with stakeholders and integrating ADA requirements into contracts with transportation vendors.

Quality and Accountability. Several task forces addressed the need both for monitoring the effects of long-term care programs and guaranteeing grievance procedures to consumers and putting into place procedures to ensure that their plans be evaluated, revised and updated regularly. Wyoming's Aging Division recommended that the Olmstead plan monitoring be conducted by teams created in the quadrants of the state. The teams are to encompass families, consumers, providers, legislators and other policymakers who will evaluate the state's compliance with its plan. Wyoming's plan will be updated by July 1, 2004, and every two years thereafter, if not sooner. The governor in Illinois issued an executive order in 2002 to appoint an Illinois Disabilities Advisory Committee to monitor the progress of its plan. Massachusetts proposed establishing a baseline of expenditure and utilization rates for facility-based services to be updated annually as well as developing a process and timeline to compile lists of those individuals waiting for long-term care services and analyzing current client populations at risk of facility placement.

Excellent examples of plan monitoring and oversight exist in Mississippi, Missouri and Texas, which were the first states to issue their plans. Each of these states put processes in place during 2002 to monitor their progress and/or set their implementation priorities.

Mississippi currently is writing a progress report of its plan to determine which recommendations have been implemented using existing state agency resources and which recommendations have not been realized.

Missouri created a new task force-the Personal Independence Commission-to prioritize the former commission's plan recommendations and draft an action plan. Its major priorities include measuring plan implementation yearly; developing statewide Olmstead training for state agency and provider staff; creating a clearly defined appeals procedure; training consumers on how to hire and fire attendants; developing a universal application form for home and community services across agencies; monitoring waiting lists; and implementing the Ticket to Work Incentives Improvement Act, including the buy-in provisions.

Texas issued its revised Promoting Independence Plan to the governor and Legislature on December 2002. In accordance with its state legislation-which created the Task Force on Appropriate Care Settings for Persons with Disabilities-the state's Health and Human Services Commission revises the plan in even-numbered years.

Conclusion

Decreasing revenues and rising Medicaid costs caused tight budgets in most states in FY 2001 and FY 2002 and continued concern in FY 2003. The November 2002 election of new state legislators and governors marks a change in leadership in many of the states. The effect of these developments on long-term care reforms in the states is uncertain. A number of states are considering cost-containment options, many of which affect long-term care programs and services.

However, several state plans are works in progress for the long run. These plans will evolve in response to funding, stakeholder input, agency-related initiatives, and continued growth and demand for community services and supports for people with disabilities.

This study is a work in progress. Please contact Wendy Fox-Grage at (202) 624-3572 or wendy.fox-grage@ncsl.org if the authors have incorrectly reported or inadvertently omitted certain Olmstead activities. For more information about Olmstead activities in the states, please visit the NCSL Olmstead Web page at www.ncsl.org/programs/health/disabil2.htm.