Adult Homes in Crisis:
Plan for Reform

A Report by the New York State Assembly

Committee on Health
Richard N. Gottfried, Chair

Committee on Mental Health, Mental Retardation
and Developmental Disabilities

Martin Luster, Chair

Committee on Aging
Steven Englebright, Chair

Committee on Oversight, Analysis and Investigation
Jeffrey Klein, Chair

Albany, NY
June 2002


The Assembly Committees on Health; Mental Health, Mental Retardation and Developmental Disabilities; Aging; and Oversight, Analysis and Investigation held public hearings in New York City on May 10th and Albany on June 6th on the quality of care in adult homes.

Some people with mental illnesses are being warehoused in adult homes. To stop this warehousing, we need a commitment to invest in more supportive housing and a commitment to enforcement. The Pataki Administration has not provided either one.

It is clear that there are serious weaknesses in the State's licensing, inspection and enforcement of the adult home industry. As a result, the health, safety, and welfare of adult home residents have been damaged.

Over the last decade, the Legislature created programs to improve care and services in adult homes. But the Administration has hamstrung these programs with bureaucratic delays, under-funding, and regulations that block effective use of the programs. An appropriate long term strategy must fix the problems with existing programs as well as deal with the question of whether large adult homes are the appropriate homes for mentally ill people and others with special needs.

The Governor has recently proposed legislation that unfortunately calls for little more than higher penalties, without any guarantee that the State would end its longstanding policy of not enforcing the existing regulations. Witness after witness at our hearings described situations where the State stopped enforcement actions, reduced fines, let bad operators off the hook, and under-funded enforcement offices.

The Executive Branch claims that there are statutory obstacles to effective adult home enforcement. But the Department of Health (DOH) testified that it has had oversight of adult homes since 1998 and that most of the DOH staff working on this issue since 1998 had also worked for the prior agency. And yet, they did not propose statutory changes until after the New York Times series appeared.

Any real solution to the adult home crisis must lead to a system where the mentally ill are provided with community-based housing with adequate and appropriate services, rather than being warehoused in large, institution-like adult homes. Mechanisms like the Community Mental Health Reinvestment Act, which devotes money saved by reductions in the state inpatient psychiatric system to community-based treatment, and the New York/New York III proposal will be important components of such a long-term strategy. In addition to an immediate emergency response, we must establish a framework for long-term adult home reform.

In the short term, the Governor must enforce existing laws and regulations, and New York must see to it that adequate funds are provided to the operators and residents of adult homes and targeted to quality care, and that the State can, when necessary, place poorly-run homes under the control of a responsible operator.

Systemic Problems

Based solely on the Governor's response to the adult home situation, one would think that the major obstacle to effective oversight and regulation of the adult home industry is an existing maximum penalty that is too low. But according to testimony, the State has entered into stipulations that minimized the fines imposed on adult home operators, has halted successful enforcement actions, and has dragged its feet in bringing in temporary operators.

According to the testimony of Jeanette Zelhof of MFY Legal Services, the State could have fined the owners of Seaport Manor almost $500,000 if the State had sustained all the charges it had brought. Instead, the State settled for $20,000 before the case was even concluded. Alan Shulkin, Region 11 Coordinator of the Public Employees Federation, testified that the Health Department's NYC office had been painstakingly working to close Seaport Manor before the Central Office took its small action.

In June 2000, based on findings by the New York State Commission on the Quality of Care for the Mentally Disabled, the State evacuated approximately 60 residents from the Leben Home. The State then proceeded to fine the home $65,000. But $60,000 of that $65,000 was suspended. The State did not appoint a temporary operator, even though the Health Department was investigating charges that the home had allowed doctors to perform unnecessary prostate surgery on 24 residents. The New York Times reported that there were at least 50 unnecessary eye surgeries later performed. After MFY Legal Services brought public pressure to bear, the Department of Health appointed a temporary receiver.

In the case of Brooklyn Manor, the State withdrew its case in 1996 and renewed the operator's license, even though an Administrative Law Judge had concluded that the operator was unfit to operate the home, refused to renew its license, and imposed approximately $70,000 in fines.

The Legislature fought for the Quality Incentive Payment (QUIP), Limited Licensure, and Assisted Living Programs and the 1994 reform package in an effort to improve the adult home system. The Pataki Administration, however, systematically underfunded and failed to implement QUIP as the Legislature intended, wrote restrictive regulations for the Limited Licensure Program and has not expanded the proven successful Assisted Living Program. Unfortunately, because of this, these programs were never allowed to achieve the results envisioned by the Legislature.

Inspection Problems

According to the New York Association of Homes and Services for the Aging (NYAHSA), a key problem with enforcement is that inspectors are not adequately trained. The Public Employees Federation (PEF) testified that there are not enough inspectors. There are only 4 inspection employees in the New York City office (5 if you include the secretary). In 1995, the New York City office had 10 staff. A minimum of 13 staff is needed to conduct the necessary surveys of the 120 adult homes in the region.

In addition, according to PEF there are 10 to 12 referrals for enforcement from the New York City office alone waiting for action in Albany. Only 2 have been acted on.

Comptroller McCall's 1998 audit identified widespread problems in both enforcement and inspections. Timelines are not met, record keeping is so inadequate that one cannot tell who has found what during an inspection, and reports of unlicensed homes go unresolved for years.

Not surprisingly, this lack of staff and enforcement has led to tardy inspections. Non-compliant homes are supposed to have an unannounced inspection every twelve months and homes that have received the Department's highest rating are supposed to be inspected every 18 months. According to PEF, at least half of the inspections required in the last three years have not been done on time.

Short Term Recommendations

In the short term, the Assembly proposes a legislative package that includes the following elements. While these will not "fix" all of the adult home problems, they will move us toward a solution to the systemic problems while dealing with the immediate emergency.

  1. Emergency Inspection Teams. Emergency inspection teams should be set up, with representatives from the Department of Health, the Office of Mental Health, the State Office for the Aging, and the Commission on Quality Care for the Mentally Disabled. The teams would conduct emergency inspections of all "impacted" (25% or greater residents with mental illness) homes first and then the remainder of the adult homes. In addition to existing measures, the inspections would include a level-of-care evaluation to determine the appropriateness of individual resident placement, a character and competence review and criminal records check of the owner, operator and employees of the facility.
  2. More inspectors. The State needs to hire more inspectors to enforce the existing regulations.
  3. Temporary operators. It ought to be easier for the State to appoint an involuntary receiver and to appoint a temporary operator pending the revocation or suspension of an operator's operating certificate. Tenants have a right to stay in their homes, regardless of the owner's misconduct. To protect that right, the temporary operator or receiver should stay in place until a qualified owner is prepared to operate the adult home.
  4. Prosecution authority for the Attorney General. The Attorney General's office has been effective over many years in prosecuting cases of patient abuse and fraud in nursing homes. The same effective energy and independence should be applied to the operation and oversight of adult homes. The prosecutorial jurisdiction of the Attorney General's office should be expanded to cover any criminal conduct relating to adult home operations.
  5. Quality Assurance Fund. A fund should be set up within the control of the Commission on Quality of Care for the Mentally Disabled that would be used to support resident advocacy and adult home quality initiatives, including basic infrastructure, such as air conditioning. Fines generated by adult home regulatory actions would finance the fund.
  6. Expand referral restrictions. Hospitals, Office of Mental Health and Office of Mental Retardation and Developmental Disabilities in-patient facilities and Correctional facilities should be prohibited from referring people to adult homes which are not in compliance with regulations or the law. In addition, adult homes under enforcement would be prohibited from admitting new residents until the compliance issues are addressed. An exception should be made where the person resided in the adult home at the time of the admission to the hospital if the person wants to return to that adult home.
  7. Licensing of adult home administrators. This has worked well for nursing homes and should be extended to adult homes.
  8. License revocation. Operators whose adult home operating certificate or license as an administrator has been suspended or revoked should be prohibited from applying to another State agency for any other kind of operating certificate or license.

Long Term Recommendations

The Assembly will continue drafting legislation responding to the points raised in this report regarding funding, quality care, and providing adequate supportive housing.

In addition, a Temporary State Commission on Adult Home Reform should be established to examine issues relevant to reform of the adult home model of residential care. The Commission would be comprised of both Executive and Legislative with recognized independence and ability. It would be given the time-limited task of examining a range of issues including but not limited to considering:

  1. How best to provide appropriate care for the mentally ill and others currently residing in adult homes, including how to move mentally ill people and others with special needs out of large adult homes and into community-based supportive housing.
  2. The sufficiency of existing regulatory tools.
  3. Strengthening provisions for the establishment of receiverships.
  4. The appropriateness and sufficiency of existing funding streams supporting the adult home model.
  5. The effectiveness of existing processes and procedures for ensuring the character, competence, and qualification of owners, operators, and employees of adult homes.
  6. The appropriateness of for-profit versus not-for-profit operation of adult homes.
  7. Whether the existing system of delivering adult home services should be reconfigured to recognize different types of populations being served.
  8. Compliance of all service delivery systems with the Olmstead decision.

The Commission would issue its report and recommendations to the Governor and the Legislature in time for consideration in next year's State budget and legislative deliberations.