Court Strips Integration Mandate From Section 504 Rules
A federal judge in Texas v. Kennedy agreed to remove "most integrated setting" language from Section 504 regulations after the Justice Department, originally the defendant, switched sides to side with states challenging the rule. The reversal follows a June DOJ opinion disavowing the integration requirement and a July announcement that DOJ would stop relying on its enforcement guidance. Disability rights advocates say the ruling does not undo ADA or Olmstead protections but creates legal ambiguity that could let states scale back community-based services, particularly as states face pressure to cut Medicaid spending. Advocacy groups are now backing legislation to codify integration protections and working with states directly to strengthen disability laws.
State Medicaid agencies and MCOs administering LTSS and HCBS programs now face reduced federal regulatory clarity on integration requirements just as budget pressure mounts to cut home- and community-based service spending.
LTSS · Behavioral Health
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