OLMSTEAD V. L.C.: IMPLICATIONS AND SUBSEQUENT JUDICIAL, ADMINISTRATIVE, AND LEGISLATIVE ACTIONS

CRS Report for Congress
Olmstead v. L.C.: Implications and Subsequent
Judicial, Administrative, and Legislative Actions
Melinda De Atley
Law Clerk
American Law Division
Nancy Lee Jones
Legislative Attorney
American Law Division
Summary
The Supreme Court ruled in Olmstead v. L.C. that Title II of the Americans with
Disabilities Act (ADA) requires states to transfer individuals with mental disabilities into
community settings rather than institutions when a state treatment professional has
determined the appropriateness of such an environment, the community placement is not
opposed by the individual with a disability, and the placement can be reasonably
accommodated. The Health Care Financing Administration (HCFA), as a response to
the Supreme Court’s decision, sent a letter to states on January 14, 2000 outlining
interim guidance for compliance with the requirements of Title II of the ADA regarding
community based services. This report will discuss the Supreme Court’s decision,
subsequent lower court decisions, the HCFA letter, and selected legislation. It will be
updated as necessary.
Background
Olmstead v. L.C., a landmark case on the rights of persons with mental disabilities,¹
found that “unjustified isolation...is properly regarded as discrimination based on
disability.”² Writing for the majority, Justice Ginsburg interpreted Title II of the
Americans with Disabilities Act (ADA) to prohibit such “unjustified isolation” but noted
several limitations: a state treatment professional must determine the appropriateness of
the environment, community placement is not opposed by the individual with a disability,
and the placement can be easily accommodated. The case was remanded for a
determination of the type of relief the state should provide.

¹ Olmstead v. L. C., 119 S.Ct.2176, 527 U.S. 581, 144 L.Ed.2d 540 (1999).
² Supra note 1 at 2185.
Congressional Research Service ˜ The Library of Congress

The ADA provides broad nondiscrimination protection for individuals with disabilities
in employment, public services, public accommodations and services offered by public³
entities, transportation and telecommunications. Title II of the ADA states in part that
“no qualified individual with a disability shall, by reason of such disability, be excluded
from participation in or be denied the benefits of the services, programs, or activities of a
public entity, or be subjected to discrimination by any such entity.”⁴ Public entity is⁵
defined as a state or local government.
The plaintiffs in Olmstead were mentally disabled individuals voluntarily confined in
a state hospital’s psychiatric unit. Their physicians had determined them to be capable of
living in a community based environment. Georgia refused to transfer these individuals to
a less restrictive setting, although the programs were available in the state. The plaintiffs
then brought suit under the ADA arguing that their segregation in the state institution
violated Title II of the act.
Supreme Court Decision
The Supreme Court in a six to three decision held it was discriminatory to force the
plaintiffs to remain in an institutionalized setting when a qualified state professional had
approved the placement of the plaintiffs in a community setting, the community placement
was not opposed by the plaintiffs, and the placement could be reasonably accommodated.
In so ruling the Court clarified that it was not suggesting that a state must close all of its
institutions in favor of only community-based programs. More specifically the Court
indicated that a state must simply make “reasonable accommodations” to a person known
to have physical or mental limitations and who is able to live in a less restrictive setting.⁶
However, the state still maintains the right to argue that even a reasonable accommodation
would present an undue hardship.⁷
Writing for the majority, Justice Ginsburg discussed the appropriateness of
institutional care in various circumstances, and further explained that institutional care is
appropriate in cases of “acute psychiatric symptoms” and for those whom a protective
environment allows the freedom to function without undue intervention.⁸ Justice Ginsburg

³ 42 U.S.C. §12101 et seq. For a more detailed discussion of the ADA see Nancy Lee Jones, “The
Americans with Disabilities Act (ADA): Statutory Language and Recent Issues,” CRS Rep. No.

98-921A.

⁴ 42 U.S.C. §§12131-12133. There is a question whether Title II of the ADA is constitutional.
The Court did not have this issue before it in Olmstead but has granted certiorari in a case to be
decided next term, Garrett v. University of Alabama. For a more detailed discussion see Nancy Lee
Jones, “The Americans with Disabilities Act: Eleventh Amendment Issues,” CRS Rep. No.
RS20472.
⁵ 42 U.S.C. §12131.
⁶ See supra note 1 at 2189-2190.
⁷ Id.
⁸ See supra note 1, at 2189.

stressed that this holding in no way relieves the state from providing institutional care to
those who have need of an intense supportive environment.
Most importantly, the Court confirmed that the “[u]njustified isolation” of persons
with disabilities is discrimination.⁹ The Court explained that institutionalizing individuals
who are able to function in a community based program serves to perpetuate the
stereotyping of all persons with disabilities. Moreover, the Court recognized that the
consequences of institutionalizing a person results in his or her diminished capacity for
social, cultural, and work opportunities. However, states may rely upon reasonable
assessments by professionals of an individual’s ability to meet the requirements for living
in a community based program. Also, even if the state provides community based services,
the Court found that the state’s responsibilities are “not boundless.” The ADA does not
require fundamental alterations of a state’s services or programs. The Court found that
“[s]ensibly construed, the fundamental-alteration component of the reasonable-
modifications regulations would allow the State to show that, in the allocation of available
resources, immediate relief for the plaintiffs would be inequitable, given the responsibility
the State has undertaken for the care and treatment of a large and diverse population of
persons with mental disabilities.” Similarly, the Court found that if a state has a
comprehensive, effectively working plan for placing individuals with disabilities in a less
restrictive setting and a waiting list that moved at a reasonable pace, the requirements of
the ADA would be met. The Supreme Court then remanded the case for further
consideration of the appropriate relief.
The dissent argued that distinctions were being made among members of the same
class, which does not rise to the level of discrimination on the basis of a characteristic
described in the statute.¹⁰ The dissent did not believe that the state of Georgia had
discriminated against the petitioners for reasons related to their disability. Arguing against
the majority’s view that it was discriminatory to keep the plaintiffs in an institutional
setting after becoming eligible for another placement, the dissent found that temporary
exclusion would not amount to discrimination.
Subsequent Court of Appeals Decisions
Two court of appeals cases thus far have reviewed the implications of the Olmstead¹¹
holding: Rodriguez v. City of New York, and Weyer v. Twentieth Century Fox Film
Corporation.¹² In Rodriguez, the second circuit court of appeals found that New York
State’s Medicaid program did not violate the ADA when the state refused to provide
safety monitoring as an independent service for Medicaid recipients suffering from mental
disabilities. Writing for the second circuit, Chief Judge Winter clarified the holding in
Olmstead as being “inapposite” to the decision before them in Rodriguez. According to
Judge Winter, the issue in Olmstead concerned the provision of a service which the state
of Georgia already provided and maintained as a program for persons with mental
disabilities. In the Rodriguez case, the State of New York did not have an established

⁹ Supra note 1 at 2187.
¹⁰ See id at 2194.
¹¹ 197 F.3d 611 (2^nd Cir. 1999).
¹² 198 F.3d 1104 (9^th Cir. 2000).

program to provide independent safety monitoring to those with mental disabilities.
Finally, the Rodriguez court understood the Supreme Court’s holding in Olmstead to
explicitly hold that a state was required to provide its services with equity and
nondiscrimination among those who are eligible: it did not hold that a state must create a
service program where it does not already maintain one.
In the case of Weyer v. Twentieth Century Fox Film Corp., the ninth circuit also
distinguished Olmstead from the facts of the case before it. The Weyer case dealt with an
insurance disability policy which provided longer term benefits for those with physical
disabilities versus shorter term benefits for those with mental disabilities. The Court found
that this type of discrimination between different types of disabilities was consistent with
Supreme Court precedent, including Olmstead. The Weyer court distinguished Olmstead
by interpreting the holding as speaking only to “unwarranted institutional confinement.”¹³
Furthermore, the court found that distinguishing between disabilities was allowable and
that the Supreme Court endorsed distinctions for insurance purposes by its rulings in¹⁴¹⁵
Alexander v. Choate and Traynor v. Turnage. The ninth circuit further distinguished
the facts by noting that Congress’ intent in creating the safe harbors in the ADA was to
allow for discrimination in underwriting of risk by insurance companies.
HCFA Letter
On January 14, 2000, the Health Care Financing Administration (HCFA) sent a notice
to all State Medicaid Directors enunciating key principles for compliance with Title II of
the ADA following the ruling in Olmstead.¹⁶ This letter highlighted several points. First,
Olmstead was seen as applicable to all individuals with disabilities, not just those with
mental disabilities. Second, the requirement to provide services in the most integrated
setting was seen as applicable to those already institutionalized along with those being
assessed for institutionalization. Since Medicaid plays a key role in delivery of community
based services, HCFA developed key principles as guidelines for compliance with the ADA
in service delivery.
HCFA indicated that a state may demonstrate compliance with the ADA, as
interpreted by the Supreme Court in Olmstead, in two ways. First, a state may show that
it has a comprehensive plan for the placement of qualified individuals with disabilities in
a less restrictive setting. Second, compliance may be demonstrated by showing a waiting
list that moves “at a reasonable pace”, devoid of state controls to keep its institutions at
full capacity.
More specifically, in developing this plan the states may provide opportunities for
individuals with disabilities and their representatives to play active roles in plan
development and evaluation. Another key principle outlined in the HCFA letter encourages
the states to ensure that there is not unjustified or unwarranted institutionalization of those
who may function in a less restrictive environment. When carrying out this principle, the

¹³ Weyer v. Twentieth Century Fox Film Corp., 198 F.3d 1104 (9^th Cir. 2000).
¹⁴ 469 U.S. 287 (1985).
¹⁵ 485 U.S. 1372 (1988).
¹⁶ [hhtp://www.hcfa.gov/medicaid/smd1140a/htm].

states should ensure that community-integrated services are available. In addition, another
principle is that states should offer a disabled individual and their family the opportunity
to make an informed choice in deciding between the community-based and the
institutional settings. Finally, the principle of quality assurance and quality improvement
encourages the maintenance of a program with sound management principles to ensure
effective delivery of services.
Selected Federal Legislation
There has been long standing congressional interest in the provision of community¹⁷
services to individuals with disabilities. In 1987, Congress created authority for states
to expand home and community based long term care services under Medicaid in response
to what was perceived to be a bias in Medicaid’s service and eligibility provisions toward
institutional care. The program, found at section 1915c of the Medicaid statute, authorizes
HCFA to waive certain Medicaid requirements to allow states to provide home and
community based long term care services to persons of all ages who otherwise meet
eligibility requirements and who, without the home and community based services, would
be institutionalized.
In 1997, H.R. 2020, 105^th Cong., the Medicaid Community Attendant Services Act
of 1997, was introduced. H.R. 2020 would have expanded availability of personal
attendant care by requiring state Medicaid plans to make the service available to each
eligible individual who would otherwise require institutional care. The major criticism of
the legislation was its cost. The Congressional Budget Office estimated that the bill could
cost $10 to $20 billion a year.¹⁸
Since the decision in Olmstead, legislation has been introduced in both the House and
Senate to further enable Medicaid to assist the states in complying with the requirements
of Title II of the ADA. On November 16, 1999, Senator Harkin introduced S.1935, 106^t^h
Cong., the Medicaid Community Attendant Services and Supports Act of 1999. This bill,
often referred to as the MiCASSA legislation, would amend Title XIX of the Social
Security Act ( Medicaid) to require the states to provide for community attendant services
and supports through Medicaid to individuals who are entitled to nursing facility services
or intermediate care facility for the mentally retarded (ICFsMR). The goal is to provide
eligible individuals with disabilities with community attendant and support services which
would better enable them to live in a community setting rather than a state institution. The
bill prohibits federal expenditures for community attendant services to be more than the
amount that would have been spent if the individual had been institutionalized. A similar^th
bill, H.R. 4416, 106 Cong., was introduced in the House by Representative Danny Davis
on May 10, 2000.

¹⁷ See e.g. H.R. 2020, 105^th Cong.
¹⁸ For a more detailed discussion of H.R. 2020 see Carol V. O’Shaughnessy, “Summary and
Analysis of H.R. 2020, the Medicaid Community Services Attendant Services Act of 1997,” CRS
General Distribution Memorandum (November 25, 1997).