RALEIGH, N.C. — North Carolina must find homes for thousands of mentally ill people in communities and stop housing them in adult care centers, where residents say their lives are regimented and boring, the U.S. Department Justice told the state in a letter this week.

"Adult care homes are institutional settings that segregate residents from the community and impede residents' interactions with people who do not have disabilities," Assistant Attorney General Thomas E. Perez says the letter, dated July 28 and sent to Attorney General Roy Cooper.

Keeping the mentally ill in adult care homes violates the Americans with Disabilities Act, Perez said. The state not only places the mentally ill in such homes, but encourages them financially to stay there instead of going to communities by providing about $550 to those who live in adult care centers, the letter said.

DOJ officials toured adult care homes in March and April, talking with residents who said they wanted to return home. "Throughout our investigation, residents emphatically expressed their desire to leave their adult care home and become members of their communities again," the letter said. One resident said he "would do anything to get out; this is a prison" while another said the residents spend their days vegetating and smoking because there's nothing else to do.

The state doesn't disagree with the letter's basic thrust — that the mentally ill shouldn't live only with other mentally ill people or with elderly people who may be frail — and the DOJ relies on the state's own findings to help reach its conclusions.

But about 5,800 people with mental illness live at 288 adult care homes with at least 20 beds where people with mental illness comprise at least 10 percent of the population, the letter says. Many landed in the homes when North Carolina reduced the number of beds available at three state mental hospitals, Dix, Cherry and Broughton, said John Rittelmeyer, litigation director for Disability Rights North Carolina, an advocacy group.

"Even though adult care homes are not appropriate settings for persons with mental illness and state law prohibits the admission of persons to adult care homes for the treatment of mental illness, the facilities have become a major part of the state's mental health service system," the letter says. "Thousands of people with mental illness receive services in adult care homes — although they could be served in more integrated settings — because there are few community-based options available to them."

Disability Rights North Carolina Executive Director Vicki Smith called the DOJ's letter "a critical step towards true recovery for people with mental illness" in the state. 

The DOJ investigation arose from a complaint filed last year by Disability Rights North Carolina, which said the homes are dingy and dangerous, violating the rights of mentally ill residents.

"We couldn't be happier" with the decision, Rittelmeyer said Friday. The decision is proof "that the state of North Carolina can do a lot better in offering people with mental illness the choice of living in the community and not in a large institutional setting like an adult care home," he said.

The state keeps the mentally ill in the adult care homes partially because that's convenient, Rittelmeyer said. When a psychiatrist visits an adult care home, he or she can treat many patients at the same time instead of just a few.

Officials with the state Attorney General's Office and the state Department of Health and Human Services are reviewing the letter.

While some parts of DOJ's ruling may need to be challenged, the state now has to find community-based homes for the mentally ill, said Rep. Nelson Dollar, R-Wake. "We have to find adequate and suitable housing for these individuals," he said. "That has to be our No. 1 concern at this point in time."

In March, DOJ visited adult care homes in Durham, Wake Forest, Cary, Wilson, Fremont, Greensboro and Rocky Mount. In April, the officials went to homes in Louisburg, Kannapolis, Morganton, Wilkesboro, Nebo and Conover.

In the past two years, the DOJ has reached settlements in similar cases in Delaware and Georgia, Rittelmeyer said.

In addition to the DOJ investigation, the state may have problems with the federal government over Medicaid payments, which aren't supposed to go to what's called "institutions of mental disease," which are facilities that predominantly care for people with mental illness. North Carolina has identified as many as 41 adult care homes that house as many as 2,000 people that might qualify as institutions of mental disease, Rittelmeyer said.