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Last month, federal regulators determined that Washington state has for two years illegally denied needed services to 27 developmentally disabled residents at a Spokane-area facility.

It turns out the problem is much bigger.

Hundreds of residents may have been deprived of so-called specialized services — such as behavioral therapy, personal-care training and skill-building exercises — for as long as 21 years, state officials told The Seattle Times last week.

Currently, up to 550 residents may not be getting the services.

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Kevin Quigley, secretary of the state Department of Social and Health Services (DSHS), said he thinks most developmentally disabled residents of nursing facilities have received the services they needed. But he said the state doesn’t have paperwork to prove it.

“Some of them didn’t get some services they would have benefited from, and none of them got the kind of record keeping (the federal government) says they were entitled to,” said Quigley, who became secretary early this year.

The disclosure indicates that the 2011 reduction in services at Spokane County’s Lakeland Village was not an isolated cost-saving move but a symptom of a state system that may have long violated federal law and now could lose tens of millions of dollars in federal funding.

Advocates say it also shows the state has put saving money ahead of helping residents with disabilities such as autism, Down syndrome and cerebral palsy.

Federal law requires that federally funded long-term-care facilities provide any services residents need, including the specialized services.

Quigley said not providing, or not documenting, specialized services can reduce costs by about 20 percent.

He said the state hopes within six months to evaluate all the residents to determine the services they need. Gov. Jay Inslee put $4.2 million in his supplemental budget proposal for evaluations.

It is unclear how much it will ultimately cost to fix the problem — and how much of a penalty the federal government may impose for years of violating the rules.

In a letter to state officials last month, the federal Centers for Medicare & Medicaid Services initially estimated a $16 million penalty just for the two years of denied services to the 27 residents at Lakeland Village.

An agency spokeswoman did not immediately return calls seeking comment.

Quigley, who noted regulators have not before mentioned this issue to Washington, said he is not focused on the potential penalty.

“All that matters right now is, let’s fix it,” he said. “Fix it as fast as we can.”

Residential centers

Nursing-facility services make up a small part of Washington’s $900 million system to help residents with developmental disabilities.

About 850 of the more than 20,000 people receiving services live at one of four state residential habilitative centers: Lakeland Village, Fircrest School in Shoreline, Rainier School in Buckley and Yakima Valley School in Selah.

Most of those residents live in the centers’ intermediate-care facilities, which provide specialized services meant to help participants function better in society.

But Lakeland, Fircrest and Yakima Valley also have nursing facilities for residents who need more medical care and help with basic living.

Washington started the nursing-facility program in 1992, said Sue Elliott, who at that time served as director of DSHS services for the developmentally disabled. She said lawmakers faced a budget deficit and thought nursing facilities would be less expensive to run than the traditional intermediate-care facilities.

They were cheaper because they didn’t provide specialized services, Elliott said.

“There were concerns,” she said, “but when the Legislature takes your money away and directs you to do something, the executive branch has to do it.”

About 250 now live in the nursing facilities — roughly 80 each at Lakeland, Fircrest and Yakima Valley, according to DSHS. An additional 300 or so with developmental disabilities live in private nursing homes, which are also subject to federal requirements for specialized services.

David Carlson of Disability Rights Washington, an advocacy group, said the state has gotten away with not providing specialized services because staffers didn’t know any better.

“If it’s never happened, nobody notices that it’s not happening,” Carlson said.

The federal review of Lakeland Village started afterDisability Rights Washington grew concerned that the institution had transferred 27 residents from its intermediate-care facility to its nursing facility during a statewide budget cut in 2011.

This year, Carlson brought the issue to Quigley, who contacted regulators.

The review found “the transfer was primarily motivated by economic concerns,” not “residents’ welfare.”

In their letter, regulators added the “Lakeland Village nursing facility was not and is not an appropriate setting for any of the 27 transferred residents.”

But for advocates, the larger issue was that the nursing facility shouldn’t have been cheaper in the first place.

That indicated a problem with the system, Carlson said.

If DSHS had followed federal law and provided services that residents in nursing facilities needed, the state wouldn’t have saved any money, he said.

“The 27 are just the most recent people,” Carlson said. “There are people who have been denied these services much longer, and most of those people didn’t even know that there was better treatment they should’ve been getting.”

Irreparable harm

Carlson said the failure to provide services has likely done irreparable harm and shows the need for continuing to move toward more community-based programs for residents with developmental disabilities.

But those fighting to keep facilities open vehemently disagreed.

Paul Strand, president of the advocacy group Action DD, said state nursing facilities provide quality services.

Saskia Davis said her 63-year-old sister has long lived at Fircrest’s nursing facility and received all kinds of specialized services, including physical and speech therapy, a personal-empowerment program and a job placement.

“It’s really great,” Davis said.

Quigley also praised the nursing facilities. He said he visited Lakeland Village’s facility last week and saw specialized services, including a group of residents learning to wash dishes.

He did not dispute that DSHS has fallen short on conducting evaluations and tracking specialized services at nursing facilities.

Quigley described a lack of administrative quality assurance that “willingly and unwillingly” caused DSHS to “not take some steps that we should have been taking and provide some services that we should have been providing.”

But he insisted the state has worked hard to meet the needs of residents with developmental disabilities.

“My guess is that the majority of specialized services have always been provided,” said Quigley, adding that “much of this is about the paperwork.”

Brian M. Rosenthal: 206-464-3195 or On Twitter @brianmrosenthal

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