Warning signs for group homes emerge amid budget stalemate

Posted July 26, 2015

Scores of disabled people who live in group homes rallied outside the Legislative Building on Nov. 14, 2012, saying they will likely be on the streets within two months if lawmakers don't take action to provide Medicaid funding for personal care services they need in their daily lives.

— Eric likes sports, especially basketball. He likes his two-day-a-week job at Marbles Kids Museum. He loves attending his family's Lutheran church.

Anchoring the 47-year-old's life is his group home, where he and four other developmentally disabled men have lived together for years.

"Moving for him would be traumatic," said Heidi Berger, Eric's sister. "Routine is very important. He has a meaningful life at the moment."

The prospect of big changes in Eric's life came up earlier this month when Easter Seals, the nonprofit that runs the group home where he lives, gave notice to the state and local mental health agencies that they would close the Zebulon group home and seven others across the state. Four of those homes serve adults with mental illness, while four others serve adults like Eric with developmental disabilities. In all, 40 people would be affected.

Officials with Easter Seals insist they took the decision to close these homes based on their waning ability to care for the aging residents with the dollars available, not any systematic problem with how the state and local governments manage group homes. However, mental health advocates worry that, if a large, well-run nonprofit finds it challenging to keep up with the needs of residents, smaller companies are surely feeling the economic pinch as well.

"I know there are a whole lot of small operators out there saying the same thing: 'When do we get enough money to pay our mortgage?'" said John Nash, executive director of the Arc of North Carolina, which owns four of the group homes that Easter Seals says it will soon give up managing.

Nash and others involved in the Easter Seals homes say their aim is to make an administrative shakeup invisible to the residents. But some of those same people also warn that the problems casting a pall of uncertainty over Eric's life could spread if lawmakers don't clear the way for the state to make both short-term and long-term fixes to a thicket of problems involving group homes.

'Aging in place'

Eric was born healthy. When he was 3 years old, an acute illness deprived him of oxygen, damaging his brain and body. Today, he functions with the cognitive ability of a kindergartner or first-grader, his sister says.

Still, for much of his life, he lived at home, attended school and, with the help of his family, found work over the years. But when his mother died and as his father aged, the family needed help.

"There is no way for one person to manage Eric's needs on his own," Berger said.

He is confined to a wheelchair, and side-effects from treatments have left him dependent on a colostomy.

Group homes like the one where Eric lives typically have between four and six residents. Across the state, there are 6,014 licensed beds for adults with developmental disabilities. Another 1,362 beds are licensed for adults with mental illnesses such as schizophrenia.

In additional to providing a place to live, the homes are staffed to help residents with basic activities. Some residents simply need help remembering to take medication and keeping to their schedules, while others, like Eric, need help with everything from toileting to bathing.

Eric's also getting older, something that Easter Seals says is a common thread with the residents of the group homes they are hoping to transfer to new managers.

"From my understanding, there are other providers out there that have a more robust infrastructure that focuses on the aging and more medically fragile population," said Dennis Williams, executive vice president of programs for Easter Seals UCP North Carolina & Virginia.

Officials with the North Carolina Department of Health and Human Services say this is a growing issue with people living in group homes for those with mental illnesses as well as developmentally disabled adults. As they get older, ailments such as arthritis and heart disease join the cluster of symptoms residents have dealt with for years.

"The idea of aging in place was not something that was prevalent 10 or 20 years ago," said Dave Richard, the state's Medicaid director.

In short, back when group homes were encouraged to develop as an alternative to large institutions, nobody planned for the inevitable reality of dealing with a population that would not necessarily ever be cured of their ailments but get older – and more expensive.

Funding not straight forward

DHHS doesn't care for the mentally ill directly. Rather, those services are provided through a network of public-private companies known as Local Management Entities – Managed Care Organizations, shorthanded as LME-MCOs. Those quasi-insurance agencies receive what amounts to a flat fee to care for their population.

That gives both the state and LME-MCOs roles in fostering and overseeing a network for group homes where people who need help can turn. Berger recalls that finding a placement for her brother was not easy, and those in the field say there are regularly waits for available beds.

The LME-MCO with responsibility for Wake County is called Alliance Behavioral Health. Doug Fuller, a spokesman for Alliance, said the Zebulon group home is the only one in the company's area that has given notice it may close. That said, the agency doesn't keep tabs on all of the licensed group homes in its area, only the ones with residents whose treatment is paid through Alliance.

"Alliance contracts with some group homes but not others," Fuller explained. "We would have no idea if a non-contracted home planned to close, and in fact, we may not know if a contracted home closes unless they house consumers that Alliance placed in their care. In that case, it would be their responsibility to notify and work with us to transition those consumers."

The potential of seeing group homes close has sparked protests and, at times, quick action over the past four years.

Since before Gov. Pat McCrory took office in 2013, there have been off-and-on crises with funding for group homes, mainly surrounding the loss of a replacement for "personal care services" money that used to come from Medicaid. Federal rulings found that it was inappropriate to use personal care services money for residents in those homes, but the state had no ready mechanism to replace that money.

There still isn't.

Over the past three years, North Carolina has used a series of state-funded patches to paper over the loss. Another such patch is ready to go, Richard said, but is on hold because the state budget has been delayed.

House and Senate lawmakers were unable to meet their July 1 deadline due to a number of disagreements and, by all appearances, will blow past the Aug. 14 date when a temporary funding measure runs out. That ongoing uncertainty is keeping the state from shifting more money into the group home system because agency officials don't know if they'll be allowed to keep the money in question.

But the problem has more components than simply replacing the PCS funding. Easter Seals says its decision had less to do with PCS funding for particular residents and more to do with whether overall funding available for group homes is enough for them to properly care for residents.

"It's part of a bigger picture in terms of what the realistic funding is for people in these homes," said Rep. Marilyn Avila, R-Wake, who heads the budget subcommittee with responsibility for DHHS funding and has worked on the group home issue.

There's no one source or entitlement program that pays for all group home patients. Some private insurance and family money is involved, Social Security Disability Income pays for some care, as is the case with Eric, and other funding comes from state programs.

"Each person may have multiple funding streams that support their day-to-day life," said the Arc's Nash.

Each of those funding streams faces ebbs and flows – ebbs have been more common during the recession – and even when stitched together may not cover the entire person or provide the same level of care they once enjoyed.

Even the houses themselves are not simple pieces of real estate. In the case of homes owned by the Arc of North Carolina and operated by Easter Seals, their expenses are underwritten with federal Housing and Urban Development funding for low-income individuals. Reapplying for that funding, if lost because the home is vacated, would be a costly, time-consuming and possibly unsuccessful process, Nash said.

The strains that the recession has placed on these various funding streams show up in different ways.

Berger said that Eric's group home used to take its residents on regular outings. That has become more rare over the past decade.

"When he first entered the group home, they used to do more things. They went on a beach trip every year," she recalled. "My father sometimes will pay for them all to go to a baseball game."

Continuing uncertainty

The question of long-term funding for group homes has been obscured by immediate concerns, both from issues about replacing PCS funding and notices like the ones from Easter Seals.

"It's one of those situations where, if your head is barely above water today, you don't worry about drowning in a few years," Avila said.

Still, most involved agreed a long-term fix is what's needed and would save money in the long run.

"Having people living on their own is a much cheaper and much more effective circumstance," Nash said of the group homes.

It's also legally required. Federal rulings have found that the state is obligated to house patients in the "least restrictive" circumstance possible. If group home residents like Eric wind up in a big institution like a nursing home, federal regulators are likely to take a dim view.

"They (the U.S. Attorney General's Office) will be all over that. It would become a huge, huge issue here in the state," Nash warned.

Richard said DHHS has been working on such a long-term fix, but he points out that one of the issues delaying the budget is the competition between proposals to overhaul the Medicaid system. Until lawmakers settle on what the system will look like and what kind of latitude DHHS will have to restructure, it's unclear what the permanent fix for group homes will look like.

Among the questions that new structure will have to grapple with is how much a group home patient should cost and whether that cost needs to shift as the resident ages.

The Arc, other groups and the state have tried to come up with a number that represents the cost of caring for someone in a group home. But because needs differ from individual to individual and costs shift from county to county, no one figure can account for all needs.

Of course, all of that involves details in a discussion that is much more basic for the families of group home residents and residents themselves. Avila says her goal is to make sure that the discussion never filters down to those living in the homes.

"We know what people need, and we want to give it to them," she said. "We hope they won't see any impact at all."


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  • Phillip Mozingo Jul 27, 2015
    user avatar

    7 out of 6 active shooters in the past 3 years had mental health issues. Our politicians have greatly diminished mental health funding. This is why most of the shootings take place to begin with. Their families always say the same thing. "We tried to get them help but no one would help us!" And we wonder why there are so many shootings in this country. It's about 90% of the reason. People are hurting!

  • Rob Creekmore Jul 26, 2015
    user avatar

    Wealthy politicians only care about other wealthy people.

  • Johan Summer Jul 26, 2015
    user avatar

    Yes - I intend to sound like a broken record when I say that.... unless enough Legislators find themselves with family members in need of these services - they will never take these health needs seriously. Let's not wait for another "class action lawsuit" to fix this problem; we owe these NC citizens, most whom cannot care for themselves, quality healthcare.