Bed money
Getting states to implement the Supreme Court's integration ruling means fighting for dollars that nursing home operators see as rightfully theirs -- by law.

image of dollars and a mattress
By Mary Johnson

Mary Johnson is editor of Ragged Edge.



Let's call him Bobby J. He lived in Missouri. He had an apartment, a job, a dog and a bicycle. "He loved that bike," says Candace Hawkins, national organizer for Freedom Clearinghouse. "He rode everywhere and was well known and liked in the community.

"He didn't have family in the area, but he had become active in a church and was an accepted and supported member of a church family," says Hawkins. At the time Hawkins was the Executive Director of the Missouri Governor's Council on Disability.

Bobby J.'s freedom lasted only a little while.

"His conservator -- his guardian -- decided that he wasn't safe in the community," said Hawkins. He moved the man out of his apartment, into a "long-term care" facility.

"His church group was outraged," Hawkins continues. The group went to court to stop the move. But Bobby J. had already been moved, and separated from his dog and his bike. "And it came out during the legal proceedings that his conservator/guardian had a financial interest in the long-term facility and wanted to fill beds," said Hawkins.

The Lexington Nursing and Rehabilitation Center a few miles north of Bloomington, Illinois, had become a money-losing venture. The facility was certified by the state for 52 "beds" -- jargon for a person housed at the facility who uses one of the beds -- but it had just 20 of its "beds" filled. "For the owners, each filled bed represented an average of $75 a day in state and federal reimbursements," reported the Chicago Tribune.

Owners Richard Benkin, Michael Weis, Joel Gross and Lee Cotton -- who news reports say have financial interests in a number of nursing homes in Illinois -- came up with what may have been a novel scheme for filling empty nursing home beds: with homeless people, these from The Chicago Christian Industrial League, a 91-year-old Chicago social service agency that runs a homeless shelter.

The gig was up when older residents reported the appearance of young men living at the facility -- people in no discernible need of "nursing care." Alerted officials moved to shut the place down -- at least temporarily. The nursing home had "a long history of safety and health violations," reported the Tribune.

The saga, said the Tribune, mirrored "a nationwide problem facing the industry: an unprecedented number of empty beds."

"No person should have to live in a nursing home or other institution," U.S. Dept. of Health and Human Services Secretary Donna Shalala said in a Jan. 14 letter to Governors. "Unnecessary institutionalization of individuals with disabilities is discrimination under the Americans with Disabilities Act."

Shalala's statement came six months after the U. S. Supreme Court had ruled in the landmark case Olmstead v. L.C. and E. W. that "unnecessary institutionalization" violated the "integration mandate" of the Americans with Disabilities Act. Yet unlike the months following another anti-segregation Supreme Court ruling, the 1954 decision Brown v. Board of Education, the nation has heard hardly a whimper about the implications of this integration ruling. There's been only one story in the national media to make any effort to assess the impact of the ruling: a Feb. 13 story in the New York Times by Washington, D. C. correspondent Robert Pear.

The Illinois nursing home industry "is riddled with mismanagement and inadequate care," reported the Chicago Tribune. A recent study of Chicago-area nursing homes showed 229 of 290 "not in full compliance with federal standards." The story is much the same in all 50 states.

People don't want to go into nursing homes if they can find a way to get what they need any other way -- that's one explanation for the "empty beds" nursing home crisis. Another is that nursing home operators have been on a building spree in recent decades, seeing Medicaid as the way to easy profits, and have now smacked up against the simple reality of capitalism that occurs when supply exceeds demand.

Nursing home placement in the United States is by law an "entitlement" -- any person who is eligible for Medicaid, and who needs assistance with things like bathing, dressing or handling their personal care -- can't be denied placement in a nursing home if a "bed" is available. Thus, the nursing home industry dominates our nation's current system of delivering services to people who need assistance. And despite the Americans with Disabilities Act's high-sounding guarantees of integration, people who need services provided through state Medicaid funds will continue to get them in segregated institutions until funding patterns change.

It's all about money. American Disabled for Attendant Programs Today, the direct-action grassroots group that has been trying to get the nation to shift to personal assistance services for over a decade, says the nation's long-term "care" system is fundamentally flawed by its bias in favor of institutions. ADAPT wants Medicaid money to "follow the person": people eligible for Medicaid could get services where they wanted -- in a nursing home, if they chose; in their home, if they wanted that. ADAPT's bedrock proposal is a bill called the Medicaid Community Services and Supports ACT -- MiCassa -- once again on Congress's platter as it has been for several years, still completely ignored by national media who, when told about it, yawn and say it will go nowhere fast.

Nursing home services across the nation are subsidized by Medicaid in a way that services provided in one's home are not. To understand why this is the case, one need look only to the powerful national lobby of nursing home operators, the American Health Care Association, and its various state chapters, who see to it that legislators are wined and dined and persuaded to understand how important it is to continue to keep money flowing to the institutions in this nation.

In order to receive federal Medicaid funding, states must have in place a statewide nursing home program. States cannot deny nursing home services because of state revenue shortfalls or budget considerations. But they can deny "home and community-based services" for these very reasons -- and usually do. In well over a dozen states, officials have either been sued -- or are soon likely to be sued -- over denial of services in "integrated" settings rather than in institutions, as advocates move to take the Olmstead decision with the seriousness that integrationists in the 1950s took the Brown decision. But unlike the racial integrationists in the 1950s, today's disability integrationists are carrying out their actions in a society that hardly knows anything has changed.

Federal law guarantees nursing homes increases in their reimbursement rate geared to inflation. Home and community-based services have no such cushion. "Over time, this results in an ever increasing proportion of revenues being spent on institutionally based long-term care," said the Robert Wood Johnson Blue Ribbon Panel on Personal Assistance Services in a report released last summer. "According to federal statutes, states have no limitation on the number of nursing home beds that a state can certify for Medicaid funding," said the Panel.

The numbers of people on waiting lists don't reflect the true need, say those who have studied the problem, because there are a lot of people who don't even know they could sign up for a program. In Louisiana there's a wait of 9 years to get services in one's home -- but no wait at all for a bed in an institution.

" 'Bed growth' continues to eat up money that could go to waivers," says the Disability Statistics Center's Charlene Harrington.

Across the nation, state nursing home associations are locked in battle with state officials to increase the number of "beds." In Mississippi in 1997, the legislature approved 1,500 new "beds"; Nevada approved 1,800 new beds. Read another way; this means more money for nursing home operators.

In Mississippi, a state where the nursing home lobby is surely in ascendency, people didn't need to have any functional limitations to get into a nursing home; but they did have to have limitations in at least 3 "activities of daily living" -- bathing, dressing, eating -- to get on a waiting list to get in-home services of any kind.

In Kansas, state officials are being sued by the state's nursing home operators over Medicaid reimbursement rates. State documents show 8,862 fewer people lived in Kansas's nursing homes in 1999 than in 1993, reports Mouth magazine. Mouth says the state's medical assistance budget for nursing homes rose by 33 percent in the same time -- from $177 million in 1993 to $263 million in 1999. What changed? Reimbursement rates. But the nursing homes want still more.

"Nursing homes talk about how the 'acuity level' has gone way up," Topeka Independent Living Resource Center director Mike Oxford told Mouth. They say that the average age of residents has "gone way up" and that the people in the nursing homes are "sicker."

The same poor-mouth story is being sung by the nursing home lobby nationwide, as industry officials sue the state over what they consider their rightful profits.

When Louisiana officials moved to trim 7 percent off the state Medicaid budget by lowering the reimbursement rate to institutions, operators sued there, too, claiming the cuts would result in "adverse economic effect to the plaintiffs' businesses . . . and possibly the cessation of plaintiffs' business."

"Two of three nursing homes in the state will be losing money if the cuts are implemented," Louisiana Nursing Home Association executive director Joe Donchess told the Baton Rouge Advocate. Nursing home operators were "$109 million behind what we should be paid based on the Medicaid plan," he said.

The state's planned reduction would amount to $35 million a year; nursing homes in Louisiana currently get $500 million a year in Medicaid money.

"Why should nursing homes want to take care of these patients at a loss?" said Association official Lisa Gardner.

Although the Olmstead decision made it the law of the land, services to people in an "integrated setting" do not have the "entitlement" status of services in the segregated setting of nursing homes. Two federal laws -- the Americans with Disabilities Act and federal Medicaid law -- simply conflict. That is, unless you decide that the Supreme Court didn't really mean "integration" in the sense advocates mean it. That seems to be the position state officials have taken

"There is a lot of misinformation and confusion regarding the recent Olmstead Supreme court ruling," Missouri Division of Mental Retardation and Developmental Disabilities head John G. Solomon wrote to advocates in a Sept. 23 memo. He went on to quote the Court's decision that the state would be required to place residents of institutions in community settings when "the placement can be reasonably accommodated, taking into account the resources available to the state."

"The state's obligation to provided community-based" services "is not boundless," he warned them. "States may refuse to provide placements that would cause them to fundamentally alter their service programs. Thus, no state is required under this ruling to dismantle its current institutional system to fund clients who want community placement."

If the money "follows the person," as ADAPT has been calling for, and as many advocates are now pushing states to do in the wake of the Olmstead decision, "that bed cannot be backfilled," Solomon said. "This could be very complicated," he warned.

The issue of "filling beds" is a huge one in Missouri," says Hawkins. "I've heard nursing home administrators claim in state hearings that they have mortgages -- investments in brick and mortar to protect -- and the state has a responsibility to 'backfill beds' if they were to lose patients due to a change in state policy. I think the phrase 'backfill beds' says it all. At least for those nursing home directors, they are concerned about 'beds,' not people."

Solomon's "position on Olmstead," Hawkins says, is "really disgusting."

"The ratio of federal, state, and local public spending on nursing homes to spending on home and community-based long-term care services is 3.69," reports the Blue Ribbon Panel. There's no "entitlement" for integrated services, despite the Supreme Court ruling. Although states have for years been able to choose a "personal care option" to be part of their Medicaid state plan, and thus serve people in their own homes, many states are leery of it, because if they make it part of their state plan, then it too becomes an "entitlement" -- and any Medicaid eligible person who needs personal assistance services can demand them.

It's no secret that nobody wants to go to a nursing home. But people do want services in their own homes. If they know their state will provide them, then "people will come out of the woodwork" for the services," said one state official, putting into words what has become known as The Woodwork Effect .

Better to go with waivers, say many state officials. Waivers -- meaning a waiver from federal Medicaid rules for a small 'test' program -- are safer. States can limit the number of people on a waiver -- and Medicaid rules require that in general, people getting services under "waiver" program not cost the state more money than if those people were in a nursing home.

Of course they generally don't. According to the Disability Statistics Center, the U.S. Medicaid expenditure per recipient for people in nursing homes in 1997, the most recent year for which figures are available, was $19,077 a year; home and community-based programs paid by Medicaid cost $5,328 per recipient. Almost all of the nation's non-institutional services today are being funded through Medicaid waivers, while the fundamental shift in Medicaid envisioned by ADAPT's MiCassa bill languishes in a Congressional committee backwater.

States now must have "a comprehensive, effectively working plan" for people to get services "in less restrictive settings," said federal Medicaid Director Timothy M. Westmoreland in a letter accompanying Shalala's. If the state has a waiting list, it must move "at a reasonable pace not controlled by the State's endeavors to keep its institutions fully populated."

The Arc of the United States says there are more than 200,000 disabled people are on waiting lists nationwide -- and that's just people with developmental disabilities. In Texas, the state nursing home waiver has a waiting list of 20,000 people. Massachusetts has 16,000 people on one waiting list and 3,600 on another, according to the Boston Herald. Most other states' numbers are in the same stratospheric ranges, say advocates.

Using the Olmstead decision, Michigan Protection and Advocacy sued the state Department of Community Health last fall on behalf of the people stuck in nursing homes there who, according to the suit, the state had already "evaluated" and "determined they didn't need nursing home care." Yet the state had failed to provide them with personal assistance for living at home. In January, the Oregon Advocacy Center sued the state over its waiting lists, which had had the same people on them for decades, waiting for services the state would not fund.

When Hawaii advocates sued their state in November, the state countered that to change the funding or size limits of its waiver program "would constitute a fundamental alteration"; the ADA didn't require a "fundamental alteration" in programs, it argued, using the same argument Missouri's Solomon was using on advocates.

Faced with contempt of court and $10,000-a-day fines for ignoring court orders to provide services to disabled people, South Florida deputy attorney Paul Hancock told reporters that disabled people on waiting lists would simply "have to wait a while, and that's the way it is."

News media "seemed always to settle defensively behind one bulwark that they felt could not be assailed: It was too expensive. Whatever individuals with disabilities felt was essential to right the scales that were weighed against them was beyond the power of the commonweal to fund, or it could be done only by sacrificing others who were equally deserving." Journalist R. C. Smith, whose 1996 book A Case About Amy chronicles the story of Amy Rowley, whose suit asserting her right under the Education for All Handicapped Children Act to an interpreter for school went to the Supreme Court in 1982, and lost, points out that the issue of an interpreter for a disabled person "was quickly framed as one of containing the costs which would surely swamp all school systems" if disabled people were allowed to just have anything they wanted.

The story by Robert Pear of the New York Times which ran Feb. 13 had the same tone the Times had used for decades. It appears to be one of very few stories about the national impact of the Olmstead decision to have been written.

Pear's story framed the Olmstead decision not as a call to integrate the nation's personal assistance services, but simply as a new cost for states. Just three paragraphs into the story he writes that "state officials said the federal policy went beyond the court ruling and could impose substantial new costs on states.

"The state officials said that compliance would cost tens of millions of dollars in individual states and could cost more than $2 billion a year nationwide." There was nothing in the story to substantiate the $2 billion figure, but it did serve as a scare tactic.

"The Clinton administration's reading of the law could increase costs over all because it could require states to serve a larger population, including disabled people in their communities who have not received services they need," Pear continued. The Woodwork Effect.

"Federal officials contend that the ruling applies to people of all ages with all types of disabilities in all institutions and all state programs," Pear wrote, allowing Roger M. Auerbach, identified as a senior official at the Oregon Department of Human Services and "vice chairman of the National Association of State Medicaid Directors," to respond that he was "surprised at the broad interpretation that the federal government has given to the Olmstead decision" -- and set the stage for the quarrel with the law that Hawaii officials and Missouri's Solomon are using.

Although Pear quotes Auerbach as saying that "in a huge majority of cases, serving people in the community is much less expensive than serving the same people in an institution," his story never bothers to ask the essential question: why do private nursing home operators have the right to continue to amass so much public money at the expense of a large segment of the public that needs services at home?

States seem determined to give the Olmstead decision the narrowest possible interpretation. The National Conference of State Legislatures' recent "Deinstitutionalization of Persons with Developmental Disabilities: A Technical Assistance Report for Legislators" also gives the erroneous impression that the Olmstead ruling applies only to people with certain kinds of disabilities. "It is imperative that NCSL make it clear to the states that Olmstead covers all disabilities," ADAPT's Bob Kakfa wrote to NCSL executive William T. Pound.

Kafka took strong exception to Pear's assertion that the state of Texas was "ahead of many other states in responding to the Supreme Court decision." Pear ended his article by noting that the state had "developed a plan to identify people in institutions who could be served in their communities, and it is setting a timetable for action," suggesting that this was due to the fact that Gov. George W. Bush's father had signed the ADA.

Advocates hooted at that. "Texas's process is not a 'plan,' nor has it been approved by anyone," Kafka said. Although Texas officials had taken some suggestions made by advocates in terms of timelines and benchmarks, they had "ignored most" of them, he said.

State documents with "good rhetoric" "can be mistaken for actually getting and keeping people out of institutions and nursing homes," Kafka said. "We must not be taken by fancy processes and rhetoric that don't result in getting or keeping people out of institutions."

As far as Hawkins knows, Bobby J. is today still in the institution his conservator put him in to bring in a little more money.

The church group lost the fight because they didn't have standing, she explains. "His conservator had the legal right to decide his fate. With the current state law, there was nothing that could be done."

And the church was stuck with large legal bills.

Nursing home lobby money and state legislators

The lobby that fought back

What Medicaid spends -- comparisons

States can offer in-home services under Medicaid now -- if they choose to

Countering the 'Woodwork Effect'



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