BISMARCK — North Dakota is dramatically increasing spending on home- and community-based services while officials negotiate a settlement with the federal government over allegations the state is housing older adults and people with disabilities in nursing facilities rather than enabling them to live in their communities.

The U.S. Department of Justice in 2015 notified the state it was launching an investigation in response to multiple complaints it received that allege the state "fails to serve people in nursing facilities in the most integrated setting" and puts people at "serious risk of nursing facility placement," according to a letter sent to then-Gov. Jack Dalrymple's office.

The letter accused the state of violating the Americans with Disabilities Act and a 1999 Supreme Court decision that requires states provide services to people with disabilities in less-restrictive settings.

DOJ officials never publicly announced the investigation, and state officials also did not disclose it. The Bismarck Tribune learned of it through advocates for the disabled and requested the letter from the governor's office.

Gov. Doug Burgum's spokesman Mike Nowatzki said earlier this week the state "is voluntarily participating in settlement negotiations with the Department of Justice to address the concerns raised by the investigation and avoid litigation."

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"The state acknowledges that there has been limited investment in home- and community-based services for individuals with disabilities in North Dakota," Nowatzki said in a statement.

North Dakota lawmakers during the 2019 Legislature provided a significant boost in funding for home- and community-based services.

The Legislature this year added more than $18 million for such services, including spending more Medicaid money on in-home care and expanding the number of people eligible to receive compensation for in-home services, according to Nancy Nikolas Maier, director of the Aging Services Division of the state Department of Human Services. The additional money for the current two-year budget cycle represents a 27% increase over funding for the previous biennium, she said.

Several bills also directed state officials to work with the nursing home industry to establish guidelines nursing homes can use to provide in-home care.

Sen. Dick Dever, R-Bismarck, who carried the Department of Humans Services' budget bill, said lawmakers were made aware of the Justice Department's investigation and discussed the lawsuit this past session. Lawmakers also visited with DOJ attorneys to discuss the investigation, he said.

Dever said the federal investigation was not the "main factor" in lawmakers' decision to boost funding for home- and community-based services. He said there's been a push in recent years to provide additional state funding for these services.

"(The DOJ is) investigating just about every state on this, but the lack of home- and community-based services, I think, is a real concern here," Dever said.

The DOJ launched similar investigations in several other states in recent years, including one that was completed in 2016 in South Dakota. Department spokeswoman Kelly Laco declined to comment on the investigation in North Dakota.

The head of a state agency that advocates for the legal rights of North Dakotans with disabilities applauded the federal investigation and the additional state funding for in-home care.

"I believe the investigation is going to result in positive changes for North Dakota," said Teresa Larsen, executive director of the North Dakota Protection and Advocacy Project.

Larsen said her agency and other disability advocacy organizations were contacted by DOJ attorneys regarding the investigation. She said her agency referred to attorneys people with disabilities who were either in a nursing home or at risk of being placed in one, and wanted to live in their communities.

"People, unless they have a real need for 24/7 nursing care, it really is not the least restrictive, most appropriate environment for anyone," she said.

North Dakota lawmakers this year also provided additional funding for a position within Protection and Advocacy that will work with a state group that ensures people with disabilities receive services in their communities.

Josh Askvig, state director of AARP North Dakota, also commended the Legislature's investments this past session in "needed improvements" related to in-home care.

"AARD ND looks forward to full implementation of these legislative measures and to building on these steps to make further progress to ensure citizens needing long term care have a choice in where and how they receive long term care services," Askvig said in a statement.

Shelly Peterson, president of the North Dakota Long Term Care Association, said as the DOJ investigation continues, nursing facilities "want to be part of that solution and provide services within a person's home."

"We are working with the Department of Human Services to identify barriers that can be removed and help get in-home services in rural communities throughout North Dakota," Peterson said in a statement.

Nowatzki, the governor's spokesman, said officials are "very optimistic a settlement agreement will be reached soon."