New Yorkers, Adult Homes Get Second Chance

“Adult homes warehoused mentally ill people for decades until a court order gave residents a chance to move. The embattled institutions were in danger of closing when the state threw them a financial life raft — the elderly.”

Five years ago, New York City’s long-troubled adult home industry appeared to be facing a slow, painful death — a fate it had earned after four scandal-ridden decades of housing mentally ill residents for profit.

The homes were once envisioned as an alternative to the state’s notoriously inhumane psychiatric hospitals. But in 2002, The New York Times exposed how they had become flophouses, rife with neglect, exploitation and despair. Residents threw themselves from rooftops and died of heatstroke in rooms that lacked air conditioning. Disability rights advocates filed a class-action lawsuit, arguing that the state had violated residents’ constitutional rights. After 10 years of litigation, the case was finally settled by the administration of Gov. Andrew Cuomo, who, while on the campaign trail, had called the state’s oversight of the homes a “fundamental government failure.” Under a court order, state-contracted mental health assessors would now have the authority to enter the homes, evaluate residents’ capacity and desire to live on their own and usher those who qualified into subsidized apartments, in a system called supported housing. For a business built on the state and federal dollars that paid for each patient’s care — roughly $1,200 per resident per month, multiplied by as many as 350 beds in each home — the potential financial losses were devastating. But documents and interviews show that while members of Cuomo’s administration negotiated the terms of the settlement, they were also developing a plan to keep the adult home industry alive, giving operators a second chance with a new, more lucrative population in the form of the elderly and infirm. The state would invite the homes to apply for licenses to operate what’s called an Assisted Living Program. Dating back to 1991 in New York, assisted living was designed for elderly people who could get by with minimal assistance and did not need the rigid structure and costly medical staff of a nursing home. Some adult homes already had assisted living beds; others had tried and failed to get the necessary credentials.

Surf Manor, now called Brooklyn Terrace, is one of the homes applying for an assisted living license. James Introne, the state’s deputy secretary of health from 2011 to 2013 and principal negotiator of the settlement, came up with an idea to give the homes affected by the litigation a new opportunity to apply for such licenses. In interviews with ProPublica, he recalled his thinking at the time: He knew some might be forced out of business, leaving residents homeless. He also knew that the adult homes would fight the settlement. He saw assisted living as a way to “avoid their active resistance,” he said. To get licenses, the homes would have to make significant improvements to their staff and structure.

“The idea was carrot and stick,” Introne said. “The bad ones you want to close. The good ones, you give them a chance.” The state closed one home by emergency order in 2017. But at least 12 of the remaining 22 homes affected by the litigation have been granted 50 or more assisted living beds, with several more awaiting final approval. Some of those beds are occupied by people with mental illness, but now the adult homes can bill Medicaid for additional services at a higher rate. Documents indicate that each home could make nearly four times more money per resident. Some of the system’s watch dogs are concerned that the licenses are going to homes that obstructed the settlement and now can take advantage of their ability to bill more. They want to know what the residents will get in exchange and how the state will ensure the safety of a new, equally fragile population when it has failed those with mental illness, both inside the homes and in supported housing.

In response to questions, Department of Health spokesman Jonah Bruno defended the Assisted Living Program. He pointed out that homes across the state, not just those affected by the litigation, were eligible to apply for assisted living licenses and many had run such programs for decades. He said the program is closely regulated and addresses a critical need. “An ALP provides a broad range of services to our senior citizens, allowing them to live in the least-restrictive environment,” he said. “Without these ALP services, many residents would potentially need to move to nursing homes, which are restrictive, institutional-like settings that provide, in some instances, similar services but at a greater cost to the Medicaid program.”

Amy Kennedy, the executive director at the New York State Center for Assisted Living, which represents adult home operators in Albany, said the shift to assisted living was important for people whose needs were intensifying as they aged in adult homes. “The ALP Program was designed so that residents of adult homes who would normally qualify for a nursing home level of care, at their option, could choose to stay in the adult home and age in place,” she said, adding that her organization’s “members include many adult homes that offer excellent care and services to their residents.”

But Introne, who left his government job just before the settlement was implemented, now looks back on his idea with a mix of frustration and regret, saying the state gave away the licenses without getting enough in return. “They blew it,” he said.