In July 1999, the U.S. Supreme Court in Olmstead et al. v. L.C. et al. interpreted Title II of the Americans With Disabilities Act (ADA) as requiring states to administer programs for persons with disabilities in a manner providing support “in the most integrated setting appropriate.” On February 1, 2001, President George W. Bush announced the New Freedom Initiative, which was later formalized in Executive Order 13217 of July 18, 2001. The New Freedom Initiative established national goals and promised federal assistance to states to remove barriers to home and community support for persons with disabilities. Among the sources of federal assistance that followed were the Centers for Medicare and Medicaid Services' Real Choice Systems Change grants to support improvements in community long-term support systems; Direct Support Demonstration Grants to promote recruitment, training, and retention of direct support personnel; and, most recently, in 2007, the Money Follows the Person demonstration grants, which committed $1.75 billion dollars in enhanced federal Medicaid matching funds (1.5 times the established federal cost-share up to 90% of total costs) to support the initial transfer and first year of community support of people leaving Medicaid institutions.

Such programs, along with administrative and regulatory reforms, are the foundation of Centers for Medicare and Medicaid Services' “Rebalancing” Initiative. The purpose of rebalancing has been to reduce placements of persons with disabilities in Medicaid institutions, both nursing facilities and Intermediate Care Facility/Mental Retardation (ICFs/MR), and to increase the number of people with disabilities receiving support in noninstitutional settings through Medicaid Home and Community-Based Services (HCBS). The primary attention in rebalancing has been given to movement of people out of nursing facilities, which in 2005 received 77.4% of Medicaid long-term support expenditures (as compared with 22.6% for HCBS), but it is equally applicable to persons with intellectual and developmental disabilities (ID/DD).

In the 7 years prior to the decision in Olmstead, HCBS programs for persons with ID/DD had already begun to grow, and by 1995, HCBS recipients outnumbered ICF/MR residents. In the years following Olmstead, the New Freedom Initiative, the Real Choice Systems Change grants, Money Follows the Person, and Centers for Medicare and Medicaid Services national and regional offices have all brought continued focus and resources to efforts to change the balance between HCBS and ICF/MR use. Although it is not possible to assess the effects of these independently, Table 1 does show patterns of change in HCBS and ICF/MR recipients with ID/DD from 7 years before Olmstead (June 1992) to the year of the Olmstead ruling (June 1999), to 7 years following Olmstead (June 2006). As shown, between 1992 and 1999, approximately 200,000 persons with ID/DD were added by states to their Medicaid HCBS programs. Increases took place in every state, although the District of Columbia had not yet developed an HCBS program. During the same period, ICF/MR populations were reduced by 28,343 residents, although increases occurred in 12 states. In the 7 years following Olmstead (1999–2006), the number of HCBS recipients increased somewhat more rapidly than during the 7 years before (217,462 and 199,468 persons, respectively), with increases in every state and a total national increase of 83%. During the same period, ICF/MR residents decreased by 20,303 persons, although increases occurred in 5 states.

Table 1

“Rebalancing” of Home and Community Based Services and ICF/MR Services in 7 Years Prior to and 7 Years After the Olmstead Decision

“Rebalancing” of Home and Community Based Services and ICF/MR Services in 7 Years Prior to and 7 Years After the Olmstead Decision
“Rebalancing” of Home and Community Based Services and ICF/MR Services in 7 Years Prior to and 7 Years After the Olmstead Decision

Figure 1 summarizes these same national statistics on Medicaid HCBS and ICF/MR recipients with ID/DD for 1992, 1999, and 2006. It provides further breakdowns of residents in ICFs/MR of 6 and fewer, 7 to 15, and 16 or more residents. The figure shows that not only was there a generally decreasing population in ICFs/MR, the decrease was most rapid in the largest facilities. Between 1992 and 1999, total ICF/MR populations decreased by 19.4%, while populations of the large ICFs/MR decreased by 28.9% (from 104,986 to 75,286). Between 1999 and 2006, populations of all ICFs/MR decreased by 17.2%, while the populations of the large ICFs/MR decreased by 22.7% (from 75,286 to 58,195). In general, then, it would appear that there were not major changes in the pace of rebalancing in services for persons with ID/DD subsequent to the Olmstead decision, the New Freedom Initiative, and the Real Choice Systems Change grants and other incentives for states to shift from Medicaid institutional to home and community based services. Still, by June 2006, about 83% of all Medicaid HCBS and ICF/ MR recipients with ID/DD were receiving HCBS-financed services and HCBS recipients outnumbered ICF/MR residents in every state except Mississippi and Louisiana. In that sense rebalancing of services for persons with ID/DD by its most common and concrete definition is a well-established as a goal and achievement in most states.

Figure 1

“Rebalancing” from Intermediate Care Facility/Mentally Retarded (ICFs/MR) to Home and Community Based Services (HCBS) in 7 years prior to and following Olmstead: Persons served in 1992, 1999, and 2006. *Includes FY 2005 data for Indiana. White bars = ICF/MR, 1 to 6 residents; hatched bars = ICF/ MR, 7 to 15 residents; black bars = 16+ residents, gray bars = HCBS

Figure 1

“Rebalancing” from Intermediate Care Facility/Mentally Retarded (ICFs/MR) to Home and Community Based Services (HCBS) in 7 years prior to and following Olmstead: Persons served in 1992, 1999, and 2006. *Includes FY 2005 data for Indiana. White bars = ICF/MR, 1 to 6 residents; hatched bars = ICF/ MR, 7 to 15 residents; black bars = 16+ residents, gray bars = HCBS

Table 1

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