New Medicaid rules threaten group home budgets
by Anna Oakes
One local group home director is relying on state officials
to reach a solution on new Medicaid regulations that could push thousands of
persons with developmental disabilities and severe mental illness out of group
and adult care homes.
“I am counting on the fact that there’s going to be a fix,
somehow, some way,” said Michael Maybee, director of Watauga Opportunities.
Among other services, the nonprofit agency operates two six-person group homes
for adults with developmental disabilities.
Effective Jan. 1, 2013, changes to Medicaid enacted by the
General Assembly this year increase the eligibility requirements for persons
receiving the Medicaid personal care services subsidy — a significant funding
source for residential facilities in which persons with developmental disabilities
and mental illnesses are placed.
Recently the federal government said North Carolina cannot
have different eligibility requirements for individuals who receive personal
care services in community-based homes versus those in adult residential
For years, the state has required persons living in
community-based homes to need assistance with two or more daily living
activities to receive the Medicaid subsidy; persons in adult care or group
homes were only required to need assistance with one activity.
To address this, the General Assembly enacted new rules in
House Bill 950 requiring persons to need limited hands-on assistance with three qualifying daily living
activities — including eating, dressing, bathing, toileting and mobility — or
two daily living activities in which one requires extensive assistance to
receive Medicaid personal care services reimbursement, no matter where they
receive the services.
But developmentally disabled adults “don’t need that kind of intense assistance,” Maybee said.
“They don’t need help eating, but they can’t plan a
nutritious meal. They can’t shop for food, but maybe they can make a sandwich.
They don’t need help getting dressed, but they need to be reminded, ‘it’s cold,
get a jacket.’
“They don’t need hand-over-hand assistance with these
things,” he said.
Yet, without the personal care services reimbursement, many
group homes may be forced to close.
“It ends up being one-third of a group home budget. Large
providers, they basically said, ‘We can’t run our homes with a 35 percent
budget cut. We’ll have to close them down,’” said Maybee.
The General Assembly allocated $39 million to adult care
homes to assist in the transition and mitigate the loss of income from
residents who no longer qualify for Medicaid personal care services
reimbursement, but group homes received no transitional funding.
The state has had years to plan for this, Maybee said.
Until 1995, group homes were primarily funded through the
state’s domiciliary care rate of about $1,200 per person per month, he said.
The state then shifted some funding — about $350 per month — to Medicaid
through the personal care services reimbursement. But for years, the federal
Centers for Medicare & Medicaid Services have warned against inequitable
eligibility requirements for personal care services, Maybee noted.
“I’ve been working with a group for a couple of years now
trying to get the state to come up with options,” he said.
The matter is amounting to a crisis at the same time the
state and the U.S. Department of Justice have reached an agreement to provide
more community-based housing choices for persons with serious mental illness in
Under the agreement, North Carolina is required to provide
3,000 community-based housing slots for citizens with serious mental illness by
But only between 100 and 300 housing slots are required by
July 2013 — not enough to cover the thousands who may lose their placements in
residential facilities because of the new Medicaid requirements.
“It is possible that there would not be enough housing slots
at any one time to serve all the persons who are eligible or who wish to move
out of an adult care home. Housing slots are being created over time, and a
limited number will be available each year,” said Christina Carter, chief
operating officer for Smoky Mountain Center, the local management entity that
supervises mental health services for Watauga and 14 other counties.
“Persons leaving an adult care home because of loss of
personal care services eligibility would be eligible for a housing slot as long
as he/she retains Medicaid or income is within the limits set by the federal
government,” Carter said.
But unlike the placement of mentally ill individuals in
adult care homes, group home placement is an ideal living scenario for adults
with developmental disabilities, Maybee said.
“That’s the one part of our system that has been working. We
are tearing apart the capacity we have for developmental disability issues,” he
said. “(The housing issues are) just coinciding for the perfect storm.”
Currently, independent assessments are being conducted to
evaluate Medicaid recipients’ degree of functional
disability and level of unmet needs for personal care services. If enough
people deemed ineligible for Medicaid personal care services reimbursement
appeal those findings, it could buy some time via the court system until the
legislature convenes in January, Maybee noted.
Lynne Mason — executive director of Hospitality House, the
Boone-based homeless shelter serving seven counties — noted that 90 percent of
the population the agency serves has a mental health or substance abuse
“It’s something we deal with almost on a daily basis,” she
said. “I think the general public does not understand how debilitating mental
illness can be; it’s so much more than being a little down, or a pill will fix
it. It’s a real struggle for individuals; it’s not an easy illness to manage.”
A lack of housing alternatives for persons with mental
disorders means that they often end up in homeless shelters, but shelters are
not equipped to provide all of the services these individuals need, Mason said.
“We cannot provide the level of care that some need,” she
said. “If we can’t serve them, they end up back on the streets.”
Carter said Smoky Mountain Center is closely communicating
with state health officials on the Medicaid eligibility issue.
“No one has all the information at this point, including not having a definitive number of persons who will be affected,” she said. “We are monitoring the developments closely and are prepared to do all we can to assist residents who may be affected.”