NC failed to meet court-ordered deadlines for moving people with mental illnesses out of adult care homes. But it got another extension.

Published June 10, 2021

By Lynn Bonner

Service gaps, lack of central control over regional offices, COVID-19 pandemic contribute to “mission drift”

North Carolina had eight years under a 2012 court order to move 2,000 people with mental illnesses out of adult care homes and into houses or apartments. A few years ago, the state received an extension to this July. It won’t make that deadline, either. 

The U.S. Department of Justice and North Carolina negotiated the original court order after a federal investigation found that the state was using adult care homes to warehouse people with severe mental illnesses in violation of the U.S. Supreme Court’s Olmstead decision. Under the Americans with Disabilities Act, people “have the right to receive services in the most integrated settings possible,” the Justice Department said then.  

The court settlement required the state to find and help pay for 3,000 housing units for people with severe mental illnesses and to move 2,000 people from adult care homes into community housing by July 2020.  

The state found ways to get the required number of affordable apartments and houses, but missed other major targets. It has not reached the goal of moving people from adult care homes, which was central to the court agreement. It continues to fall short of providing community mental health services that would help people leaving those homes to successfully live on their own, and in supporting people with severe mental illnesses who want jobs.  

The agreement has been modified four times since 2012. A federal court judge signed the latest change in March. It gives the states another two years, until July 1, 2023, to reach the housing goal. In the next two years, the state must help another 840 people leave adult care homes. It must also continue to work to keep people from going into adult care homes in the first place, and help people leaving psychiatric hospitals find housing.  

People who were diverted from adult care home placements are occupying most of the nearly 3,000 housing slots.  

 Corye Dunn, Disability Rights NC

Corye Dunn, director of public policy at Disability Rights NC, said the results of the community housing effort are an example of “mission drift,” evidence that the state Department of Health and Human Services does not have enough control over the regional mental health offices that oversee county community services. Those regional mental health offices are called Local Management Entities/Managed Care Organizations.  

The state contracts with the LMEs, which receive federal, state, and local money. LMEs pay the mental health providers who work with residents.  

“With the lack of centralized authority, sometimes ineffective practices go relatively unchecked,” Dunn said. “If they’re not cultivating providers, ensuring fidelity to an evidence-based model, and if you’re not ensuring adequate training and adequate payment to retain them in those services, you’re going to get those patchy, inconsistent results.” 

The state needs to focus on building a network of mental health service providers, Dunn said.  

“That’s going to take active management. It’s not going to happen just organically,” she said. “We can’t pretend that our network as it exists is adequate. It’s not.” 

Martha Knisley is an independent reviewer who monitors the state’s progress toward the goals set out in the court order and files reports each year. Those reports are based on document reviews and interviews with dozens of people: current and former residents of adult care homes, as well as people in psychiatric hospitals, service providers, staff from regional mental health offices, and state staff.  

The most recent report is for fiscal year 2020, which ended in June 2020, but focuses on information and trends from the last six months of 2020.  

In the report, Knisley applauded the state for finding ways to increase housing available for people with mental illnesses and for likely reaching the 3,000-unit goal by July 1. But North Carolina has fallen “far short” of meeting goals for moving people out of adult care homes and for “providing access to the array, frequency, and intensity of individualized recovery-based services and supports necessary to enable individuals to transition to and live in community-based settings.” 

She also noted in the latest review that the state hadn’t made progress in transitioning people out of nursing homes over the previous year, and had actually slipped a little. 

Sam Hedrick, senior advisor for the ADA and the Olmstead Act

Sam Hedrick, senior advisor for the ADA and the Olmstead Act at the state Department of Health and Human Services, had a brighter assessment. There is room for improvement, she said, but the state is closer to meeting the 2,000-person goal than it was when Knisley finished her latest review.  

By the end of March, 1,630 people who had been living in nursing home were in supported housing, Hedrick said. Considering that people who are moving are older and many have complex physical needs, the LMEs are doing well, she said.  

The regional agencies are working to make sure that older people with mental illnesses leaving adult care homes have primary care providers and any necessary home health or personal care services in place when they move out, she said. 

COVID-19 slowed some of the effort because workers couldn’t get into adult care homes to talk to people, Hedrick said. They made some modifications using technology or by meeting with people outside. The work is getting back on track, she said, and the state will definitely meet the settlement goals by 2023.  

“We have spent a lot of time laser-focused on adult care homes as a priority population,” Hedrick said. “We had a really good plan. Unfortunately, COVID took the wind out of our sails last year.” 

People in adult care homes say follow-up is lacking

As part of their work, Knisley and her team go into adult care homes to interview people living there. Knisley told Policy Watch this week that “gaps in time” are a problem. 

If people are presented with the idea that they can move out of an adult care home, but there’s no timely follow-up, reluctance can set in, Knisley said. “People would express their interest in housing and employment, and it didn’t happen.” 

One person living in an adult care home said that community living is “a hoax,” because someone talked to her about moving but she never got the chance to leave, Knisley said. 

Some who moved into community housing said they did not get timely connections to mental health workers.  

There were “gaps in providers not meeting with people early on,” Knisley said. If there’s no relationship between the provider and the individual, “services break down and were not effective,” she said.  

Few people who they wanted to work actually received help preparing for or finding jobs, the review found.  

Some were told that they would lose their benefits if they got jobs, but were not offered counseling to determine how much they could earn and keep their benefits. Others were told that, for various reasons, they weren’t ready to work.  

Sometimes it’s hard for guardians or counselors to believe that people with severe mental illnesses can work, Knisley said in the interview. “It’s our hesitance about people going to work that sometimes gets in the way,” she said.  

One woman wanted to learn to use a laptop so she could search for part-time work and connect with people, Knisley said. One man wanted to get his high school diploma. Another started a business.  

Hedrick said COVID stopped the plan to improve supported employment, but it’s picking up speed again. “We’re going to see some improvement this year,” she said.  

In her report, Knisley said state contracts with the LMEs don’t clearly detail the obligations the regional offices have under the court settlement.  

“The State has failed to spell out obligations clearly for specific requirements in contracts and to monitor the effectiveness of their guidance and requirements over time,” she wrote. “This has led to the State’s failure to meet the services obligations in this Agreement.” 

In an interview, Knisley said the state is moving in the right direction. Next year, as part of the move to managed care for state Medicaid, people who have severe mental illnesses or developmental disabilities can enroll in what the state calls “tailored plans,” or souped-up health plans that will include both mental and physical health care. With the first contracts, only existing LME/MCOs are allowed to offer tailored plans.  

The state has made the court settlement requirements part of the tailored plan requirements, Knisley said.  

“I do think you’ll see more improvements in services,” she said.  

Hedrick agreed that the move to tailored plans will help. “We can actually set expectations and outcomes we want to see,” she said.  

Dunn of Disability Rights NC, however, anticipates even more problems will arise when regional mental health organizations add physical heath to their responsibilities.  

The regional mental health agencies haven’t been able to meet the court settlement requirements, work that required a lot of coordination. It’s hard to imagine things will get better when they are in charge of coordinating physical health care too, she said.  

“I hope it will improve with the move to Medicaid managed care,” Dunn said. “It can’t get worse.” 

How did the state get 3,000 affordable houses and apartments for people with mental illnesses?
In the first few years after the state agreed to find 3,000 affordable rental units for people with mental illnesses, it didn’t look like it was going to hit the target. 

Eventually, the state developed a plan, and DHHS, the NC Housing Finance Agency, and the LMEs started working together to find new money and use it effectively. The NC Justice Center and Disability Rights NC helped, Knisley said. (NC Policy Watch is a project of the NC Justice Center.)

“The state has done, I think, a very good job at standing up a supported housing system in TCL (Transitions to Community Living), and I hope they can use this model for all people with disabilities,” she said.