The Olmstead Fact Sheet

U.S. Supreme Court Olmstead v. L.C. Ruling

On June 22, 1999, the U.S. Supreme Court affirmed through its Olmstead v. L.C. ruling that under the Americans With Disabilities Act (ADA) unjustifiable institutionalization of a person with a disability is discrimination when the treating provider believes that community-based care is appropriate and safe; when the affected person does not oppose the community-based option; and when the placement can be reasonably accommodated taking into account the resources available to the state and the needs of others. The court, in the ruling, determined that institutionalization severely limits a person's ability to interact with family and friends, to work, and to make a life for him or herself. The Olmstead case was brought by two Georgia women with dual diagnoses (developmental disability and mental illness). At the time the suit was filed, both women were receiving mental health services in a state-run institution (inpatient psychiatric hospital), despite the fact that state treatment professionals had evaluated each as capable of being appropriately served in a community-based setting.

The Olmstead Decision

The Court based its ruling in Olmstead on Title II of the ADA, which pertains to Public Services. Section 12132 of Title II states: "…no qualified individual with a disability shall, by reason of his disability, be excluded from participation in, or be denied benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." Federal Regulations define forms of discrimination prohibited under the ADA. This regulation {28 CFR Section 35.130(d)} is commonly referred to as "the integration mandate:" A public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities. The U.S. Department of Justice has defined most integrated setting as "a setting that enables individuals with disabilities to interact with non-disabled persons to the fullest extent possible." Certain principles have emerged from the Court's ruling:

  • 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: a) community-based care is appropriate, b) the person does not oppose such placement, and c) 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,
  • the ADA does not require that community-based services be imposed on people with disabilities who do not desire it.

The court also held 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

Olmstead is not a case about Medicaid. Nothing in the decision changes the basic nature of the Medicaid program or alters the structure of the individual entitlement or state obligations under the law. However, because Medicaid comprises such a large proportion of state health expenditures in the area of long-term care, Olmstead is causing the state to focus even more extensively on its Medicaid policy and program choices regarding long-term care, both in institutions and in the community. Any alterations to the state's Medicaid policies should be thought of as a consequence of, rather than required by, the Olmstead decision. Because the Medicaid program is such a critical resource to states in funding long-term care, the Health Care Financing Administration (HCFA) has been issuing information related to the Olmstead decision to states. For example, HCFA has reminded states that it (HCFA) has the obligation under Medicaid to periodically review the services of all residents in Medicaid-funded institutions and is reviewing how clarification or changes in their policies can help states to strengthen community services. In the court's ruling, HCFA suggested that a state may be able to meet its obligation under the ADA by demonstrating that it has a comprehensive, effectively working plan for providing services to persons with disabilities in integrated settings and a waiting list that moves at a reasonable pace. Although nothing in the ruling requires a state to have such a plan, both HCFA and Office of Civil Rights are strongly encouraging states to develop plans and are offering technical assistance in doing so.

Missouri Actions

Governor Mel Carnahan issued an executive order creating the Home and Community-Based Services and Consumer-Directed Care Commission. The objective of the commission is to develop a comprehensive, effectively working plan, as recommended by the U.S. Supreme Court in its Olmstead decision. The commission is required to submit a working plan to the governor by December 31, 2000. To read the executive order, go to: