In July 2010, Disability Rights NC filed a complaint against the State of North Carolina. The complaint alleged that the State’s practice of warehousing people with mental illness in adult care homes (ACHs) violated the Americans with Disabilities Act (ADA). Specifically, this practice violated the ADA’s integration mandate, which says people with disabilities should receive services in the most integrated setting possible.

The U.S. Department of Justice (DOJ) investigated and found that the State was violating the ADA. In July 2011, DOJ issued a Letter of Findings that outlined the minimum steps North Carolina needed to take to meet its obligations under the law.

In July 2012, the State of North Carolina and the DOJ reached a settlement agreement. The State agreed to an eight-year plan to develop community-integrated housing and services for 3,000 individuals with mental illness living in ACHs. Disability Rights NC is actively participating in the State’s implementation efforts to ensure the rights of people with disabilities are protected.

An independent reviewer provides annual reports on the State’s progress toward fulfilling the settlement agreement.

Settlement Agreement in a Nutshell

  1. The State must develop 3,000 new units of supported housing over seven years for people with serious mental illness, targeting those in large ACHs with high percentages of people with mental illness (i.e., homes with at least 50 beds where at least 25% of residents have mental illness and homes with between 20 and 49 beds where at least 40% of residents have mental illness). Also targeted are people with serious mental illness coming out of state hospitals who are homeless or have unstable housing, and people with serious mental illness diverted from admission to ACHs. The housing units are permanent, afford tenancy rights, enable people with disabilities to interact with people without disabilities to fullest extent possible, and do not limit access to the community. The State will arrange a rental subsidy plus appropriate support services. All but 250 of these housing units must be scattered-site supported housing, with no more than 20% of the units in a development occupied by people with disabilities known to the State.
  2. The State must provide the array and intensity of services and supports that people with serious mental illness need to live in integrated settings. The State will rely on ACT, CST, psychosocial rehab, peer supports, crisis intervention, supported employment, and other services. The State will significantly expand ACT teams; 50 teams serving 5000 people will be created by 2019.
  3. The State will require each LME/MCO to develop an adequate crisis intervention service system including mobile crisis teams, walk-in crisis clinics, community hospital beds, 24/7 crisis lines, etc.
  4. The State will expand supported employment to serve the populations targeted by the agreement. By 2019, the State will serve 2,500 people.
  5. The Agreement includes provisions requiring frequent in-reach and education efforts focused on people in ACHs and state hospitals to be conducted by teams knowledgeable about resources, supports, and services (including community providers and peer specialists).
  6. The Agreement provides for discharge planning requirements that begin at admission; identify strengths, preferences, needs and desired outcomes; document any barriers that prevent a person from going to more integrated settings; and set forth a plan to address those barriers. The planning must set a date when transition can occur. The State must set up a preadmission screening and review process to divert people with serious mental illness from admission to ACHs.


Every year, an independent reviewer assesses the State’s progress in the eight-year plan. Independent Reviewer Martin Kinsley released the latest report and compliance chart in November 2017. Her findings featured the same themes that she reported in the previous two years—progress toward compliance is slow, with the State missing certain benchmarks of compliance with the terms of the settlement agreement. Kinsley reports that progress is uneven: “There has been major progress in Supported Employment; mixed progress in Supported Housing, In-reach, Transition Planning, and Quality Assurance and Performance Improvement; and minimal progress in Pre-Admission Screening and Diversion and Services.” As in previous years, she emphasized the importance of community-based services.

Previous annual reports on implementation of the settlement agreement: