1 Department of Health and Human Services (HHS), MENTAL HEALTH: REPORT OF THE SURGEON GENERAL 46 (1999), available at http://www.surgeongeneral.gov/library/mentalhealth/home.html [hereinafter SURGEON GENERAL REPORT].

2 Id.; S. Rep. No. 107-61, at 6 (2001).

3 SURGEON GENERAL REPORT, supra note 1, at 227.

4 Gen. Accounting Office, GAO/HEHS-00-95, Mental Health Parity Act: Despite New Federal Standards, Mental Health Benefits Remain Limited 5 (May 2000) [hereafter GAO Report]; S. Rep. No. 107-61, at 3.

5 SURGEON GENERAL REPORT, supra note 1, at 407-09; see Harrison, Beth Mellen, Mental Health Parity, 39 HARV. J. ON LEGIS. 255, 256 (2002)Google Scholar (noting that a majority of individuals cite cost as the primary reason for not seeking treatment).

6 INST. OF MEDICINE, CARE WITHOUT COVERAGE: TOO LITTLE, TOO LATE 70-71 (2002).

7 Id.; see Harrison, supra note 5, at 256-57.

8 See Signorello, Pamela, Note, The Failure of the ADA—Achieving Parity with Respect to Mental and Physical Health Care Coverage in the Private Employment Realm, 10 CORNELL J.L. & PUB. POL'Y 349, 350-51 (2001)Google Scholar.

9 See tenBroek, Jacobus & Matson, Floyd W., The Disabled and the Law of Welfare, 54 CAL. L. REV. 809, 814-16 (1966)Google Scholar; Weber, Mark C., Disability and the Law of Welfare: A Post-Integrationist Examination, 2000 U. ILL. L. REV. 889, 889-902 (2000)Google Scholar.

10 See Bagenstos, Samuel R., Subordination, Stigma, and “Disability”, 86 VA. L. REV. 397, 426-27 (2000)Google Scholar; Weber, supra note 9, at 900-04.

11 See Remarks on Signing the Americans with Disabilities Act of 1990, 26 WEEKLY COMP. PRES. DOC. 1162 (July 26, 1990) (asserting that the enactment of the ADA would usher in the day when “no American will ever again be deprived of their basic guarantee of life, liberty and the pursuit of happiness” on the basis of their disability).

12 527 U.S. 581, 600-03 (1999).

13 See Bragdon v. Abbott, 524 U.S. 624 (1998).

14 Olmstead, 527 U.S. at 597.

15 Pennsylvania Dep't of Corrections v. Yesky, 524 U.S. 206, 209-10 (1998).

16 42 U.S.C. § 12112(b)(4) (2000) (emphasis added).

17 Id. § 12182(a).

18 Id. § 12181(7)(F).

19 Id. § 12102(2)(A).

20 Id. § 12102(2)(B).

21 Id. § 12102(2)(C).

22 See Toyota Motor Mfr., Kentucky, Inc. v. Williams, 534 U.S. 184 (2002) (reversing a decision that found an employee suffering from “carpal tunnel syndrome, myotendinitis, and thoracic outlet compression” disabled, in part because the lower court disregarded evidence that the employee was capable of engaging in “household chores, bathing, and brushing [her] teeth …”); Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999) (rejecting a claim that an employee denied an opportunity on the basis of a physical impairment was “regarded as” disabled unless the employer subjectively assessed the impairment as substantially limiting major life activities).

23 See 42 U.S.C. § 12201(c).

24 See id.

25 See generally Hoffman, Sharona, AIDS Caps, Contraceptive Coverage, and the Law: An Analysis of the Federal Anti-Discrimination Statutes’ Applicability to Health Insurance, 23 CARDOZO L. REV. 1315, 1333-48 (2002)Google Scholar; Jacobi, John V., The Ends of Health Insurance, 30 U.C. DAVIS L. REV. 311, 352-61 (1997)Google Scholar.

26 Equal Employment Opportunity Comm’n, Interim Enforcement Guidance on Application of ADA to Disability Based Distinctions in Employer Provided Health Insurance, N-915.002, § III(C)(2) (June 8, 1993), subsequently recodified in EEOC Compliance Manual, No. 915.003, § IV(B) (2000), available at http://www.eeoc.gov/docs/benefits.html.

27 See Doukas v. Metro. Life Ins. Co., 950 F. Supp. 422, 432 (D.N.H. 1996).

28 See, e.g., Pallozzi v. Allstate Life Ins. Co., 204 F.3d 392 (2d Cir. 2000); Leonard F. v. Israel Disc. Bank of New York, 199 F.3d 99 (2d Cir. 1999); Ford v. Schering Plough, 145 F.3d 601 (3d Cir. 1998); E.E.O.C. v. Deloitte Touche, LLP, 2000 WL 1024700, 11 A.D. Cases 1523 (S.D.N.Y. 2000) (mem.).

29 29 U.S.C. §§ 621-634 (200). See Pub. Employee Ret. Sys. of Ohio v. Betts, 492 U.S. 158, 170-72 (1989).

30 Leonard F., 199 F.3d at 105 (internal quotations omitted) (quoting United Air Lines, Inc. v. McMann, 434 U.S. 192, 203 (1977)).

31 Betts, 492 U.S. at 170-72. See United Air Lines, Inc., 434 U.S. at 203.

32 Leonard F., 199 F.3d at 104-06.

33 INST. OF MEDICINE, supra note 6, at 71.

34 Id.

35 Zuvekas, Samuel H. et al., Mental Health Parity: What Are the Gaps in Coverage?, 1 J. MENTAL HEALTH POL’Y ECON. 135, 142 (1998)Google Scholar.

36 The Surgeon General reported that, for insured patients in 1996, only slightly more than half of mental health service expenditures were covered by insurance (approximately $18 billion out of $32 billion). SURGEON GENERAL REPORT, supra note 1, at 419.

37 See infra Part III.B.

38 SURGEON GENERAL REPORT, supra note 1, at 407.

39 Id. at 408.

40 INST. OF MEDICINE, supra note 6, at 71.

41 MASS. GEN. LAWS ANN. ch. 175, § 47B (Supp. 2002); OR. REV. STAT. § 743.556 (2001); WIS. STAT. ANN. § 632.89 (West Supp. 2002).

42 MISS. CODE. ANN. § 83-9-41 (Supp. 2002); N.Y. INS. LAW § 3221(a)(5) (McKinney 2003); OHIO REV. CODE ANN.§ 3923.30 (Anderson 2001).

43 Several relatively current compilations of state parity legislation exist. See GAO Report, supra note 4, at Appendix III (current as of March 1, 2000); NAT’L CONFERENCE OF STATE LEGISLATURES, STATE LAWS MANDATING OR REGULATING MENTAL HEALTH BENEFITS, at http://204.131.235.67/programs/health/Mentalben.htm (last updated Feb. 6, 2003); AM. PSYCHIATRIC ASSOC., STATE OF THE STATES: PARITY LAWS, at http://www.psych.org/pub_pol_adv/stateparity92000.cfm (last updated Sept. 2000).

44 KAN. STAT. ANN. § 40-2,105 (2001); N.C. GEN. STAT. § 58-51-55 (2001); W. VA. CODE ANN. § 33-16-3a (2002). For state employees, North Carolina goes much further. North Carolina law requires coverage of mental and substance abuse treatment for state employees and requires that the terms and conditions of that coverage, including lifetime and annual spending limits, cost sharing and number of visits covered, be no more restrictive than the coverage of physical health benefits. N.C. GEN. STAT. § 58-51-55.

45 IND. CODE ANN. § 27-13-7-14.8 (Michie 2002); KY. REV. STAT. ANN. § 304.38-193 (Michie 2002). Indiana, like North Carolina, goes further for state employees, mandating the coverage of mental health treatments. IND. CODE ANN. § 27-13-7-14.8.

46 TEX. INS. CODE ANN. § 3.51-14 (Vernon 2002). Texas also extends greater protection to state employees, mandating coverage of treatment for mental illness of the same scope (including number of visits, cost-sharing and spending limits) as for physical illness. Id.

47 COLO. REV. STAT. § 10-16-104 (2002); N.H. REV. STAT. ANN. § 415:18-a (1998 & Supp. 2002).

48 CAL. INS. CODE § 10144.5 (West Supp. 2002); CONN. GEN. STAT. ANN. § 38a-488a (West 1958 & Supp. 2001); DEL. CODE. ANN. tit. 18, § 3343 (1999 & Supp. 2002); MONT. CODE ANN. § 33-22-701 (2001); R.I. GEN. LAWS § 27-38.2-1 (2001); VT. STAT. ANN. tit. 8, § 4089b (2001).

49 CAL. INS. CODE § 10144.5 (“severe” mental illness is defined as schizophrenia, schizoaffective disorder, bipolar disorder, major depressive disorders, panic disorders, obsessive-compulsive disorders, pervasive developmental disorder or autism, anorexia nervosa and bulimia nervosa); MONT. CODE ANN. § 33-22-706(6) (“severe” mental illness is defined as schizophrenia, schizoaffective disorder, bipolar disorder, major depression, panic disorder, obsessive compulsive disorder and autism); OKLA. STAT. tit. 36, § 6060.10 (2002) (“severe” mental illness is defined as schizophrenia, bipolar disorder, major depressive episode, panic disorder, obsessive-compulsive disorder and schizoaffective disorder).

50 DEL. CODE ANN. tit. 18, § 3343 (“serious” mental illness is defined as schizophrenia, bipolar disorder, obsessive compulsive disorder, major depressive disorder, panic disorder, anorexia nervosa, bulimia nervosa, schizoaffective disorder and delusional disorder); R.I. GEN. LAWS § 40.1-5.4-7(10) (“serious” mental illness is defined as “schizophrenia, bi-polar disorders as well as a spectrum of psychotic and other severely disabling psychiatric diagnostic categories, but does not include infirmities of aging or a primary diagnosis of mental retardation, alcohol, or drug abuse or anti-social behavior”).

51 FLA. STAT. ANN. § 627.668-669 (West 1996 & Supp. 2002); KAN. STAT. ANN. § 40-2,105 (2000). The Diagnostic and Statistical Manual of the Mental Disorders, 4th edition, (DSM-IV) is published by the American Psychiatric Association in Washington, D.C.

52 CONN. GEN. STAT. ANN. § 38a-488a; VT. STAT. ANN. tit 8, § 4089b.

53 See Nelson, Keith, Comment, Legislative and Judicial Solutions for Mental Health Parity: S. 543, Reasonable Accommodation, and an Individualized Remedy under Title I of the ADA, 51 AM. U. L. REV. 91, 102-03 (2001)Google Scholar; see also S. REP. NO. 107-061, at 2 (2001).

54 Equitable Care for Severe Mental Illness Act of 1995, S. 298, 107th Cong. (1995).

55 “Severe mental illness” was defined as “an illness that is defined through diagnosis, disability and duration, and includes disorders with psychotic symptoms such as schizophrenia, schizoaffective disorder, manic depressive disorder, autism, as well as severe forms of other disorders such as major depression, panic disorder, and obsessive compulsive disorder.” Id. § 6.

56 Id. § 3(a)(2).

57 Id. § 4.

58 See Senate Report 107-061, supra note 53, at 2 (2001).

59 Mental Health Parity Act, Pub. L. No. 104-204, tit. VII, 110 Stat. 2874, 2944-50 (1996) (codified at 29 U.S.C. § 1185a (2000) & 42 U.S.C. § 300gg-5 (2000)).

60 29 U.S.C. § 1185a(b)(1) (2000); 42 U.S.C. § 300gg-5(b)(1) (2000).

61 As originally passed, the Mental Health Parity Act applied only to group plans for employers with more than fifty employees. Pub. L. No. 1040-204, tit. VII, § 712(c)(1)(B). It was extended in 1997 to cover Medicaid managed care plans and plans in the State Children's Health Insurance Program. 42 U.S.C. § 1396u-2(b)(8); 42 U.S.C. § 1397cc(f)(2); see Senate Report, supra note 53, 107-061, at 3.

62 29 U.S.C. § 1185a(e)(4); 42 U.S.C. § 300gg-5(e)(4).

63 29 U.S.C. § 1185a(b)(2); 42 U.S.C. § 300gg-5(b)(2).

64 29 U.S.C. § 1185a(c)(2); 42 U.S.C. § 300gg-5(c)(2). This exemption was rarely invoked. The GAO reported that “[f]ederal agencies estimated that as many as 10 percent of health plans affected by the law, or 30,000 health plans, could be eligible for the exemption. However, as of March 2000, Labor officials reported that only nine employers nationally had claimed an exemption.” GAO REPORT, supra note 4, at 16 n.21. The likely reason for the failure of exemption applications to materialize was the unexpectedly low cost of compliance with the Act. See infra Part III.A.3.

65 See 29 U.S.C. § 1185a(a)(1) & (2); 42 U.S.C. § 300gg-5(a)(1) & (2).

66 Pub. L. No. 104-204 § 712(f), 110 Stat. 2847, 2950 (1996).

67 Pub. L. No. 107-147, § 610, 116 Stat. 21, 60 (2002) (to be codified at 26 U.S.C. § 9812(f)).

68 See supra Part II.B.2.

69 See Harrison, supra note 5, at 268-72; Otten, Alan L., Mental Health Parity: What Can It Accomplish in a Market Dominated by Managed Care?, at 8–9 (Milbank Memorial Fund, June 1998)Google Scholar available at http//www.milbank.org/mrparity.html; Roland Sturm et al., Mental Health and Substance Abuse Parity: A Case Study of Ohio's State Employee Program, 1 J. MENTAL HEALTH POL’Y & ECON. 129, 129-130 (1998); see also GAO Report, supra note 4, at 16-17; S. REP. NO. 107-61, supra note 53, at 2.

70 See Lehman, Anthony F., Quality of Care in Mental Health: The Case of Schizophrenia, 18:5 HEALTH AFFAIRS 52, 53–55 (1999)Google Scholar; Marczyk, Geoffrey R. & Wertheimer, Ellen, The Bitter Pill of Empiricism: Health Maintenance Organizations, Informed Consent and the Reasonable Psychotherapist Standard of Care, 46 VILL. L. REV. 33, 38–40 (2001)Google Scholar; Norquist, Grayson & Hyman, Steven E., Advances in Understanding and Treating Mental Illness: Implications for Policy, 18:5 HEALTH AFFAIRS, Sept. 1999, at 32, 35–36CrossRefGoogle Scholar.

71 See Otten, supra note 69, at 4-5 (noting that some insureds were “seeing psychotherapists month after month because they were dissatisfied with relationships with their boss or their spouse or child. Were these really ‘mental health’ problems to be covered by health insurance?”).

72 See GAO Report, supra note 4, at 17-18.

73 See id. at 10-11.

74 S. REP. NO. 107-61, supra note 53, at 3 n.3; see GAO Report, supra note 4, at 16 n.21 (noting that only nine employers nationally had claimed the exemption as of March 2000).

75 GAO Report, supra note 4, at 16 n.21.

76 The literature suggests an upsurge in research on outcomes and treatment effectiveness research in the last decade. See Marczyk & Wertheimer, supra note 70, at 76-84; McEvoy, Joseph P. et al. eds., The Expert Consensus Guideline Series: Treatment of Schizophrenia 1999, 60 J. CLINICAL PSYCHIATRY 8 (Supp. 11 1999)Google Scholar; Norquist & Hyman, supra note 70, at 42-44; Rubenstein, Lisa V. et al., Evidence-Based Care for Depression in Managed Primary Care Practices, 18 HEALTH AFFAIRS 89, 96–101 (1999)Google Scholar; see also Keller, Martin B. et al., A Comparison of Nefazodone, the Cognitive Behavior-Analysis System of Psychotherapy, and Their Combination for the Treatment of Chronic Depression, 342 NEW ENG. J. MED. 1462 (2000)Google Scholar; Rosenheck, Robert et al., A Comparison of Clozapine and Haloperidol in Hospitalized Patients with Refractory Schizophrenia, 337 NEW ENG. J. MED. 809 (1997)Google Scholar.

77 Findlay, Steven, Managed Behavioral Health Care in 1999: An Industry at a Crossroads, 18:5 HEALTH AFFAIRS 116, 116 (1999)Google Scholar; SURGEON GENERAL REPORT, supra note 1, at 423; GAO Report, supra note 4, at 15.

78 Findlay, supra note 77, at 117.

79 Id. at 116-17.

80 Id. at 117-18.

81 KRISTEN REASONER APGAR, U.S. OFFICE OF PERS. MGMT., LARGE EMPLOYER EXPERIENCES AND BEST PRACTICES IN DESIGN, ADMINISTRATION, AND EVALUATION OF MENTAL HEALTH AND SUBSTANCE ABUSE BENEFITS—A LOOK AT PARITY IN EMPOYER-SPONSORED HEALTH BENEFIT PROGRAMS 7-8 (Mar. 2000), available at http://www.opm.gov/insure/mental/report.pdf.

82 See Mechanic, David & McAlpine, Donna D., Mission Unfulfilled: Potholes on the Road to Mental Health Parity, 18:5 Health Affairs 7, 9 (1999)Google Scholar; Otten, supra note 71, at 12; Findlay, supra note 77, at 121.

83 See GAO Report, supra note 4, at 16-17 (only 3 percent of businesses complying with federal parity requirements report cost increases); Mechanic & McAlpine, supra note 82, at 8.

84 See Otten, supra note 69, at 4-5.

85 See Sage, William M., Regulating Through Information: Disclosure Laws and American Health Care, 99 COLUM. L. REV. 1701, 1775-80 (1999)Google Scholar; see also Blum, John D., Leveraging Quality in Managed Care: Moving Advocates Back into the Box, 2002 WISC. L. REV. 603, 609 (2002)Google Scholar; Hall, Mark A. et al., Measuring Medical Malpractice Patterns: Sources of Evidence from Health Services Research, 37 WAKE FOREST L. REV. 779, 783-84 (2002)Google Scholar; Rosoff, Arnold J., The Role of Clinical Practice Guidelines in Health Care Reform, 5 HEALTH MATRIX 369 (1995)Google Scholar. Much of the continuing work on small area variation in healthcare derives from the pioneering work done by John Wennberg and Alan Gittelsohn. See, e.g., Wenberg, John & Gittelsohn, Alan, Small Area Variations in Health Care Delivery, 182 SCIENCE 1102 (1973)Google Scholar.

86 See Marczyk & Wertheimer, supra note 70, at 38-40; Norquist & Hyman, supra note 70, at 35- 36.

87 See Sharfstein, Steven S. et al., Managed Care and Clinical Reality in Schizophrenia Treatment, 18:5 HEALTH AFFAIRS 66, 86 (1999)Google Scholar.

88 See Jacobi, John V., Canaries in the Coal Mine: The Chronically Ill in Managed Care, 9 HEALTH MATRIX 79, 106-07 (1999)Google Scholar; Sandy, Lewis G. & Gibson, Rosemary, Managed Care and Chronic Care: Challenges and Opportunities, in MANAGED CARE AND CHRONIC ILLNESS: CHALLENGES AND OPPORTUNITIES 12 (Fox, Peter D. & Fama, Teresa eds., 1996)Google Scholar.

89 Mechanic & McAlpine, supra note 82, at 12-13.

90 See Otten, supra note 69, at 4-5.

91 SURGEON GENERAL REPORT, supra note 1, at 423-24.

92 See generally Blum, John, Overcoming Managed Care Regulatory Chaos Through a Restructured Federalism, 11 HEALTH MATRIX 327 (2001)Google Scholar; Furrow, Barry R., Regulating the Managed Care Revolution: Private Accreditation and a New System Ethos, 43 VILL. L. REV. 361 (1998)Google Scholar; Hyman, David A., Regulating Managed Care: What's Wrong With a Patient Bill of Rights, 73 S. CAL. L. REV. 221 (2000)Google Scholar; Korobkin, Russell, Determining Health Care Rights from Behind a Veil of Ignorance, 1998 U. ILL. L. REV. 801 (1998)Google Scholar.

93 See RICHARD KRONICK & JOY DE BEYER, MEDICARE HMOS: MAKING THEM WORK FOR THE CHRONICALLY ILL (1999); Jacobi, supra note 88, at 97-102.

94 See Audrey Burnam, M. & Escarce, José J., Equity in Managed Care for Mental Disorders, 18:5 Health Affairs 22, 25–26 (1999)Google Scholar.

95 Id. at 27.

96 See id. at 29.

97 See Trubek, Louise G., Informing, Claiming, Contracting: Enforcement in the Managed Care Era, 8 Annals Health L. 133, 141-43 (1999)Google Scholar.

98 ERISA provides a private cause of action for members of employment-based plans to challenge a denial of promised coverage. 29 U.S.C. § 1132 (2000). See Kennedy, Kathryn J., Judicial Standard of Review in ERISA Benefit Claim Cases, 50 Am. U. L. Rev. 1083, 1091-94 (2001)Google Scholar.

99 See Trubek, supra note 97, at 138-39.

100 See id.

101 Jacobi, John V., Patients at a Loss: Protecting Health Care Consumers Through Data Driven Quality Assurance, 45 U. KAN. L. REV. 705, 757-62 (1997)Google Scholar.

102 Id. at 766.

103 Id. at 762-64; Trubek, supra note 97, at 136-38.

104 Burnam & Escarce, supra note 94, at 29.

105 See Foote, Sandra M. & Jones, Stanley B., Consumer-Choice Markets: Lessons from FEHBP Mental Health Coverage, 18:5 HEALTH AFFAIRS 125, 129 (1999)Google Scholar (noting that CAHPs and quality data are not available for mental health benefits for FEBHP participants; unlikely to be available in the near future).

106 Burnam & Escarce, supra note 94, at 29; see also Blum, supra note 85; Rosoff, Arnold J., The Role of Clinical Practice Guidelines in Health Care Reform, 5 HEALTH MATRIX 369 (1995)Google Scholar.

107 See Lehman, supra note 70, at 58-59.

108 See Frank, Richard G. et al., The Value of Mental Health Care at the System Level: The Case of Treating Depression, 18:5 HEALTH AFFAIRS 71, 84–86 (1999)Google Scholar.

109 See Mechanic & McAlpine, supra note 82, at 18.

110 See Bailit, Michael H. & Burgess, Laurie L., Competing Interests: Public Sector Managed Behavioral Health Care, 18:5 HEALTH AFFAIRS 112 (1999)Google Scholar; Hogan, Michael F., Public-Sector Mental Health Care: New Challenges, 18:5 HEALTH AFFAIRS 106 (1999)Google Scholar; SURGEON GENERAL REPORT, supra note 1, at 422.

111 See Mechanic & McAlpine, supra note 82, at 14-15.

112 See Hogan, supra note 110, at 106; SURGEON GENERAL REPORT, supra note 1, at 414.

113 See SURGEON GENERAL REPORT, supra note 1, at 414.

114 Id. at 415.

115 Id. at 419.

116 42 U.S.C. § 1396d(i) (2000); see Jennen, Susan M., Note, The IMD Exclusion: A Discriminatory Denial of Medicaid Funding for Non-Elderly Adults in Institutions for Mental Diseases, 17 WM. MITCHELL L. REV. 339, 344-47 (1991)Google Scholar.

117 42 U.S.C. § 1396d(a)(4)(A) (2000).

118 Id. § 1396d(a)(15).

119 Id. § 1396d(a)(16).

120 Id. § 1396d(a)(23), 1396u(b).

121 Id. § 1396n(c)(4)(B).

122 Id. 1396n(c)(2)(D).

123 See STEVEN LUTZKY ET AL., HEALTH CARE FINANCING ADMIN., HHS, REVIEW OF THE MEDICAID 1915(C) HOME AND COMMUNITY BASED SERVICES WAIVER PROGRAM LITERATURE AND PROGRAM DATA 10-11 (The Lewin Group, June 15, 2000) (noting that almost no HCBS funds are targeted at the chronically mentally ill); Judge David L. Bazelon Ctr. for Mental Health Law, UNDER COURT ORDER: WHAT THE COMMUNITY INTEGRATION MANDATE MEANS FOR PEOPLE WITH MENTAL ILLNESS: THE SUPREME COURT RULING IN OLMSTEAD V. L.C. 13 (1999), available at http://www.bazelon.org/lcruling.html (“Because of the federal rule that does not allow payment for services in an Institution for Mental Diseases (IMD), this [HCBS waiver] option is extremely difficult to use for adults age 22-64 who are in hospitals or specialized nursing facilities that are considered IMDs.”).

124 See John Richard Elpers & Bruce Lubotsky Levin, Mental Health Services: Epidemiology, Prevention, and Service Delivery Systems, in MENTAL HEALTH SERVICES: A PUBLIC HEALTH PERSPECTIVE 17 (Bruce Lubotsky Levin & John Petrila eds., 1996) (recognizing the “historical reluctance of federal agencies to assume costs [of mental healthcare] now borne by state and local governments”).

125 The Department of Health and Human Services has recently taken small steps to recognize the need for states to expand their Medicaid programs' community care components. See HHS, PRESS RELEASE: HHS URGES STATES TO CONTINUE TO EXPAND HOME AND COMMUNITY BASED CARE FOR DISABLED RESIDENTS: SUPPORTS “FUNDING FOLLOWS THE PERSON” MODEL (August 12, 2002), available at http://www.hhs.gov/news/press/2002pres/20020812.html (discussing the “President's New Freedom Initiative” that devotes “$120 million in Systems Change Grants to support state efforts to institute community-based approaches”); CTRS. FOR MEDICARE & MEDICAID SERVS., HHS, PROMISING PRACTICES IN HOME AND COMMUNITY BASED SERVICES, at http://www.cms.gov/promisingpractices (last modified Aug. 19, 2002) (discussing an information clearinghouse maintained by HHS to inform states of innovative community care models). These initiatives include some direct additional funding for community-based services and strongly encourage the states to reconfigure their Medicaid programs to emphasize community care. However, most community-based services for people with mental disabilities remain optional.

126 See Perkins, Jane & Boyle, Randolph T., Addressing Long Waits for Home and Community-Based Care Through Medicaid and the ADA, 45 ST. LOUIS U. L.J. 117, 121-22 (2001)Google Scholar.

127 Id. at 125.

128 States turn down federal matching funds for services that they otherwise provide when they adopt this policy. It may be that states are worried about the “woodwork effect”—a response related to pent up demand for services that results in a surge of use in a new program. See STEVEN LUTZKY ET AL., supra note 123, at 29-30. If this is the explanation, it amounts to states refusing to provide services because they are needed too much. If families are exhausting themselves and their savings caring for mentally disabled family members, they would take up an offer of extended community services readily. But this is a good reason to offer the services and not a reason to avoid doing so.

129 See Burnam & Escarce, supra note 94, at 28.