On June 18, 2026, the Department of Justice, Office of Legal Counsel issued a legal opinion titled, Application of the Rehabilitation Act and Americans with Disabilities Act to State Institutionalization of Patients with Severe Mental Illness or Disabilities.
The opinion made three findings: 1) In prohibiting discrimination on the basis of disability, neither section 504 of the Rehabilitation Act nor Title II of the Americans with Disabilities Act (ADA) imposed an integration mandate on states in their treatment of mentally disabled individuals, nor does either statute authorize the responsible Executive Branch agencies to impose such a mandate; 2) A statutory mandate that states treat mentally disabled patients in maximally integrated settings would raise serious questions regarding the scope of Congress’s power under the Fourteenth Amendment, the Interstate Commerce Clause, and the Spending Clause; 3) In Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581 (1999), the Supreme Court did not hold that section 504 of the Rehabilitation Act or Title II of the ADA require states to treat mentally disabled patients in the most integrated setting appropriate to their needs.
This legal opinion, which is only binding on the executive branch, deals a blow to decades of federal court precedent upholding the requirement to administer programs and activities in the most integrated setting appropriate the needs of individuals with disabilities and in particular, requiring community-based treatment for persons with mental disabilities when (1) the State’s treatment professionals determine that such placement is appropriate, (2) the affected persons do not oppose such treatment, and (3) the placement can be reasonably accommodated, taking into account the resources available to the State and the needs of others with mental disabilities.
While private litigants may continue to pursue their rights under the integration mandate in court, this opinion could further undermine Medicaid for home and community-based services at a critical moment when states are absorbing funding reductions resulting from HR1.
LeadingAge has reached out to the Centers for Medicare and Medicaid Services for more information on their intent to provide guidance to states on the Home and Community Based Settings Final Rule, including clarifying the scope of community integration provisions. To read LeadingAge’s article on the decision, click here.