Tim Healy calls the time he spent in a Twin Cities group home “my lost years.’’

Healy, 32, has an intellectual disability and needs help with basic living tasks. But for 12 years at a group home in New Hope, he got little of that. He describes a facility so short-staffed that residents were ignored for hours at a time and rarely allowed to venture outside. He says it was a period of numbing boredom, loneliness and doubt.

Today, living with his mother in West St. Paul, Healy feels reborn. Cradling a guitar, he describes his plans to get married, find a job, start a rock band and take sky diving lessons. “It’s like I was a prisoner,’’ he said. “I’ve been away too long.”

Healy and his family remain furious at state and county officials who administer aid to Minnesotans with disabilities. They say no one told them that Minnesota’s Medicaid program pays for the kind of services that would enable Healy to live at home and independently.

“Tim could have flourished on his own, but we were led to believe that a group home was the only option,” said his mother, Brenda Olson.

Healy’s plight is one example of the way Minnesota is forsaking a legal obligation to promote independence among people with disabilities. Rather than helping develop care plans that would allow them to live in their own homes or apartments, counties across the state continue to steer thousands of Minnesotans with disabilities into facilities that promote dependency and isolation.

State spending on group homes, for Minnesotans with disabilities who receive a coveted form of assistance known as a Medicaid “waiver,” now totals about $1.5 billion a year. That represents about two-thirds of total spending on waivers for people with disabilities — and is more than the combined state spending on agriculture, higher education and pollution control.

Despite that huge outlay, records show that Minnesota rarely conducts inspections or on-site audits to ensure that group homes are delivering the individualized care and daily activities they promise.

As a result, Minnesota has become one of the most segregated states in the nation for housing people with disabilities. In 2016, only 7% of Minnesotans with intellectual and developmental disabilities who received waivers lived in their own homes. Last year, some 44% of Minnesotans with disabilities reported living in group homes — more than twice the national average and the highest rate in the nation.

“We are spending Medicaid dollars on an entrenched system that segregates people and leaves them with little choice,” said Barnett Rosenfield, supervising attorney for Mid-Minnesota Legal Aid. “It’s completely inconsistent with the law and the purpose of waivers.”

For those confined to group homes, the experience is often one of profound loneliness and frustration.

At a group home in Bloomington, Patricia Wilson sobbed while clutching the portrait of her husband of 35 years. The two were placed in separate group homes after she suffered a major seizure. She has seen him only three times in the past year. Wilson said staff at both homes have ignored her repeated pleas that they be reunited.

In Brooklyn Park, Marrie Bottelson, an artist with cerebral palsy, has tried to forget the 13 years she lived in two group homes, where arbitrary rules prevented her from enjoying a normal social life and pursuing her passion for painting.

And in Sibley County, parents of a 20-year-old man who has severe autism and behavioral problems, Dustin Zahn, were recently told by county case managers that he had to “fail in a group home” before he could use public funds to live in his own apartment with supports.

Sue Schettle, chief executive of ARRM, the state’s main trade association for group homes, acknowledged that providers are often unable to meet resident and family expectations for access to the broader community. The primary culprit, she said, is a statewide shortage of caregivers, which has put group homes in a precarious position. Many homes can sustain just one caregiver for every four residents, which makes it difficult — even dangerous — to take individuals on outings, she said.

To address the staffing problem, Schettle said that ARRM and a coalition of disability organizations plan a major marketing campaign next year designed to promote direct care as a profession.

“The big elephant in the room is staffing — and speaking the truth about it,” Schettle said. “We have a whirlwind of problems in this state that are largely related to a lack of human resources.”

Officials with the Minnesota Department of Human Services (DHS), which regulates group homes, said the agency has been intensifying outreach efforts to inform people of their options under Medicaid, including new services that make it easier for a person with a disability to live independently or with families in the community. The agency is also exploring ways to simplify the state’s Medicaid waiver system to make it easier for families to access benefits.

“Our systems have gotten very complex,” said Alex Bartolic, director for disability services at the DHS. “No family or person trying to get services should have to understand how all this system works.”

Minnesota’s system of Medicaid waivers, created in 1984, was designed to use state and federal health care funds creatively to serve people in their homes rather than by paying large medical institutions or hospitals. Group homes, which typically house four adults, were seen as a good option for some people.

Today, in some parts of the state, they are the default — or only — choice.

Group homes get bulk of waiver funds

Shaded counties sent more than 70% of their waiver funds to group homes last year instead of supporting independent living.

Source: Minnesota Department of Human Services

In 55 counties, group homes receive at least 70% of Medicaid waiver funds, according to state records obtained by the Star Tribune. In all but four counties, group homes receive more than half of all waiver spending.

“All too often, group homes are the path of least resistance,” said Lee Ann Erickson, executive director of the Arc Southwest Region, a disability rights group in Fairmont, Minn. “We fit people into the system we have built, rather than tailoring services to meet their needs.”

For taxpayers, the practice is wildly inefficient. In 2017, the state Medicaid waiver program spent $104,000 for every corporate group home resident, compared with about $25,000 for those who live independently with supports.

Amy Hewitt, director of the University of Minnesota’s Institute on Community Integration, noted that many people with disabilities “love their group homes” and have close relationships with fellow residents and staff. Even so, she said, the giant supply of group homes — there are nearly 3,800 statewide — has acted as a disincentive to develop more creative options.

In 2018, Minnesota launched a new service covered by Medicaid waivers, known as “individualized home supports,” designed to provide training and direct support for people to live in their own homes. Of the 31,000 Minnesotans on waivers who are eligible for the program, only about 210 have taken advantage of the service, state records show.

“There are many, many people who have no idea that other options exist,” Hewitt said.

On a bright afternoon in August, Cathy Joy Schlager, 64, who has Down syndrome, grinned and waved from her wheelchair as her sister pushed her down the wide streets of Lakefield, a quiet farming community in southwest Minnesota. Local residents, seeing her on a rare outing from her group home, hollered her name from yards or porches and honked their horns as they passed.

For years, Schlager volunteered at a local nursing home, where she brightened people’s days with her wry grin and homespun crafts. She played on softball and bowling teams, joined a traveling clown troupe with her uncle, and wove colorful quilts sold in a thrift shop. At dances organized by a local disabilities group, Schlager would croon along to Johnny Cash on the karaoke machine.

“It doesn’t matter where we go in this town, people know Cathy,” said her sister, Heidi Arndt. “She’s famous.”

Then in the winter of 2018, Schlager suffered a sudden deterioration of her vision, which made it impossible for her to get around without help. Her two sisters, who live and work nearby, decided they could no longer care for her alone. They moved Schlager into a small, four-bedroom group home in Lakefield overlooking cornfields. The pain of separation was mitigated by assurances from managers at the home that Schlager would receive one-on-one care and be taken out in the community at least once a week.

“Our big mistake was believing them,” Arndt said.

Almost immediately, the sisters noticed a disturbing pattern. When they dropped by after work, they found that Schlager had been left alone for hours. Apart from a few hours each weekday at a local activity center, the promised outings did not occur. Her requests to go out with friends or volunteer at an assisted-living facility — just a block away — were ignored.

“We noticed that she was spending a lot of time alone,” Arndt said.

One afternoon this spring, Joni Hanson, one of Schlager’s sisters, dropped by the group home and found her sister slumped over in her wheelchair, facing a blank wall, while two staff members played puzzles in a distant room. She had been sitting in the same spot for nearly three hours. Her dinner lay on a plate in the kitchen, untouched and out of reach.

Pressed for an explanation by her family, managers of the group home repeatedly cited a lack of staff. Most days, the home had just one employee to care for the four residents, which made it unsafe to take anyone out of the home. Even short walks around the neighborhood, so Schlager could get some exercise, were considered a risk. Her sisters said Schlager’s muscles were atrophying after so many hours in her wheelchair.

The executive director of the group home operator, Habilitative Services, Inc., said the company is dedicated to quality service, including providing residents “with opportunities to access and enjoy activities in their communities.”

Janice Reyes has worked in hospitals and senior homes in southwest Minnesota since the 1960s. “I’ve seen a lot,” Reyes said, holding up calloused hands. Yet Reyes said she found the conditions at Schlager’s group home intolerable and quit after a few months. The hardest part, she said, was the guilt that came with working 10-hour shifts alone — unable to take her clients into the community.

“Cathy is a ray of sunshine around here,” Reyes said over coffee at a cafe. “She doesn’t deserve to be hidden in the shadows.”

In 2014, federal health regulators approved sweeping new rules to promote inclusion among people with disabilities who receive Medicaid benefits. The requirements were explicit: Every setting where a person receives Medicaid funds must be integrated into the greater community. This meant that people living in group homes were entitled to the same freedoms that people typically have in their own homes — including the opportunity to control their schedules, choose their roommates, have visitors at any time, and decorate their own rooms.

The rules were hailed as a historic victory by disability rights groups. In Minnesota, however, enforcement of the rules has been minimal, and public awareness of the new protections remains low, say disability rights groups.

Starting in 2017, the state has required group home providers to submit documents, known as “attestation forms,” to demonstrate that residents have full access to the community. The DHS has conducted thousands of remote reviews, known as “desk audits,” of these forms, largely to ensure that the facilities are actually submitting the paperwork, state records show.

Yet the system is largely dependent on group homes self-reporting problems. The DHS has only conducted 86 site visits of group homes since the new federal rule went into effect nearly six years ago.

Without regular spot checks, it is impossible to determine if group homes are actually delivering the services they list in attestation forms and whether residents are getting out into the community, said Roberta Opheim, state ombudsman for mental health and developmental disabilities.

“Simply requiring providers to submit a form is not enforcement,” she said. “It’s almost as if the [new rules] do not exist.”

There are also signs that Minnesota’s regulators have not kept pace with the growth of the group home industry. Complaints of abuse and neglect at state-licensed group homes have doubled since 2014, to more than 3,400 a year. At the same time, the percentage that are being investigated on-site by the DHS has declined consistently each year, falling from 46% in 2014 to 16% in 2018, state records show. Only 31% of maltreatment complaints have been substantiated over the past five years, state data shows.

Now Minnesota faces heightened scrutiny from a federal judge. In 2016, several group home residents sued the DHS, alleging that the state’s heavy reliance on the facilities is unconstitutional.

A federal judge hearing the case ruled this fall that the agency was violating due process rights by failing to inform people that they can use Medicaid waiver funds to pay for more individualized housing options, and then failing to notify them when such services were denied. The agency’s practices, the judge ruled, forced individuals to wait indefinitely for requested services without the chance to appeal and obtain a fair hearing.

U.S. District Judge Donovan Frank called for a “systemwide remedy” to improve the lives of people living in group homes.

“Actions speak louder than words,” said Justin Perl, litigation director for Mid-Minnesota Legal Aid, which represents the residents. “For decades, DHS has made promises to provide services in the most integrated setting, and yet it has failed to honor that legal obligation.”

It was almost dusk, and a 2-year-old boy with a head of curls was gazing expectantly out the window of a small house in Brooklyn Park.

The boy screamed with joy as Marrie Bottelson rolled her wheelchair to the front door.

“Hi, sweetheart!” she yelled, swinging the door open with her foot. The boy crawled onto Bottelson’s lap as she rolled across a living room packed with her colorful paintings and children’s toys. The smell of roasted chicken wafted from the kitchen.

Not long ago, this cheerful domestic scene would have been unthinkable.

For 13 years, Bottelson, who has cerebral palsy, was confined to two group homes where her daily life was severely restricted. Because of limited staffing, Bottelson said, she was required to be in bed by 7 or 8 p.m. Bottelson, 44, is a successful artist who sells colorful greeting cards and paints portraits at art shows and on commission; yet she had no space to do her work and house rules prevented her from painting in her room.

“Everyone said I would be safe [in the group home], but I wanted more out of life than just being safe,” said Bottelson, who is a plaintiff in the federal lawsuit. “All I wanted was a normal life.”

Then, at a state seminar on disability rights in 2013, she met others with disabilities who were using their Medicaid waivers to live in their own homes and pay for their own staff. No one had ever told Bottelson that such an option was possible. She immediately requested a similar arrangement, but was told by her Hennepin County case manager that she was “not independent enough” for individualized housing.

It took another three years of mediating with county officials before Bottelson fulfilled her dream. She now lives in a warm and bustling home, sharing it with Victoria Yang, a live-in caregiver, and Yang’s two children — Trystan, 5, and Felton, 2. The house is owned by Bridges MN, which provides independent housing for people with disabilities. Her waiver pays for Yang to help Bottelson get ready in the morning and cook her meals, and for transportation to the day activity center where she produces much of her artwork.

No one tells her when she can come or go. Cats jump into her lap as she paints. The children run and grab her shoes in the morning, and kiss her on the forehead at night. Bottelson affectionately refers to the children as “my little family.”

“People used to look at me and say, ‘Oh my God, she can’t live on her own.’ But I showed them that I can!” Bottelson said proudly.