The Olmstead case was brought by two Georgia women whose disabilities include mental retardation and mental illness. At the time the suit was filed, both plaintiffs were receiving mental health services in state-run institutions, despite the fact that their treatment professionals believed they could be appropriately served in a community-based setting.

In accordance with that Court ruling, the U.S. Department of Health and Human Services (HHS) today issued guidance to state Medicaid directors on how to make state programs responsive to the desires of disabled persons to live in appropriate community-based settings. The Administration’s goal is to integrate people with disabilities into the social mainstream with equal opportunities and the chance to make choices.

The Olmstead Decision

The Court based its ruling in Olmstead on sections of the ADA and federal regulations that require states to administer their services, programs and activities "in the most integrated setting appropriate to the needs of qualified individuals with disabilities."

Under the Court’s ruling, certain principles have emerged:

• unjustified institutionalization of people with disabilities is discrimination and violates the ADA;
  

• states are required to provide community-based services for persons with disabilities otherwise entitled to institutional services when the state’s treatment professionals reasonably determine that community placement is appropriate; the person does not oppose such placement; and the placement can reasonably be accommodated, taking into account resources available to the state and the needs of others receiving state-supported disability services;
  

• a person cannot be denied community services just to keep an institution at its full capacity; and,
  

• there is no requirement under the ADA that community-based services be imposed on people with disabilities who do not desire it.

The Court also said that states are obliged to "make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program or activity." Meeting the fundamental alteration test takes into account three factors: the cost of providing services in the most integrated setting; the resources available to the state; and how the provision of services affects the ability of the state to meet the needs of others with disabilities.

Olmstead and the Medicaid Program

The Medicaid program can be an important resource to assist states in meeting the principles set out in Olmstead. In its letter/guidance to State Medicaid Directors, the Health Care Financing Administration, which oversees the Medicaid and Medicare programs, reminds states they have an obligation under Medicaid to periodically review the services of all residents in Medicaid-funded institutions.

The letter also reminds states they may chose to utilize their Medicaid funds to provide appropriate services in a range of settings from institutions to fully integrated community support.

HCFA urges states to develop comprehensive working plans to strengthen community service systems and to actively involve people with disabilities and their families in the design, development and implementation of such plans. HCFA also encourages states to take steps to prevent future inappropriate institutionalization of persons with disabilities and to assure the availability of community-based services.

Next Steps

Over the past few years, HHS has focused on expanding and promoting home and community-based services, offering support and technical assistance to states and using the flexibility of the Medicaid program. The Olmstead decision affirms that we are moving in the right direction.

To help states comply with the Court ruling, HCFA and the HHS Office for Civil Rights have begun working with states and the disability community toward the goals of promoting home and community-based services; honoring individual choice in service provision; and acknowledging that resources available to a state are limited by the need to serve both community-based and institutionalized persons.

In addition to continued technical assistance to states, HHS will review relevant federal Medicaid regulations, policies and previous guidance to assure that they are compatible with requirements of the ADA and Olmstead decision and that they facilitate states’ efforts to comply with the law.