Community and Family Living Amendments of 1985

Community and Family Living Amendments of 1985 - Amends title XIX (Medicaid) of the Social Security Act to require a State plan to provide a severely disabled individual who is entitled to medical assistance and who is residing in a family home or community living facility with an array of community and family support services which will provide for the health, safety, and effective habilitation or rehabilitation of such individual. Includes community and family support services for severely disabled individuals as "medical assistance" under Medicaid. Permits the inclusion of such services as medical assistance only if: (1) such services are provided to a severely disabled individual residing in a family home or in a community living facility; (2) such services are provided in accordance with an individually written habilitation or rehabilitation plan; and (3) the total amount of funds spent by the State from non-Federal funds for such services equals at least a specified base amount. Specifies services included and excluded as community and family living services.

Requires a State, in order to receive payment for community or family support services provided, to: (1) enter into a community and family living implementation agreement with the Secretary of Health and Human Services; and (2) submit required reports to the Secretary.

Requires a community and family living implementation agreement to include, among others, the following provisions: (1) community living facilities will not be unduly concentrated in any residential area; (2) all the staff of each facility must have appropriate training; (3) parents of the severely disabled will have training available; (4) case management; (5) an individual will reside as close to his or her family as possible; (6) hearing procedures for individuals who feel they have been inappropriately placed; and (7) suitable State supplementary payments as authorized under title XVI (Supplemental Security Income) of the Social Security Act. Requires such agreement to include other specified provisions with respect to severely disabled individuals living in residential facilities which are not family homes or community living facilities. Requires the agreement to include descriptions of methods to be used to achieve the following objectives: (1) to advise severely disabled individuals of alternative arrangements and services available to them, of their right to choose providers, and of their right to a fair hearing; (2) to assure fair and equitable provisions to protect the interests of public employees who will be affected by the transfer of severely disabled individuals from public institutions to community or family living facilities under the agreement; (3) to assure application of fair employment standards and equitable compensation to workers in facilities offering care and services for which payments are made under this Act; and (4) to assure timely submission of any reports required by the Secretary; and (5) to assure opportunities for participation by interested citizens in the development of the implementation plan or agreement.

Sets forth provisions providing for: (1) auditing a State's compliance with this Act; (2) noncompliance; and (3) review by the Comptroller General.

Includes, under Medicaid, within the definition of "intermediate care facilities" services in an institution for mentally retarded persons or persons with related conditions if: (1) the individual needs of each newly admitted individual are ascertained by an interdisciplinary team within 30 days; (2) the institution, if not operated by the State, has a written agreement with an appropriate State agency to cooperate in the implementation of the agreement.

Limits, effective FY 2000, the amounts payable under Medicaid to any State for skilled nursing facility services and intermediate care facility services furnished to severely disabled individuals under age 65 in facilities having not more than 15 beds. Provides that such limitations shall not apply, if: (1) payments are for services for individuals in a facility which meets the size and location requirements for a community living facility; (2) payments are for services for individuals in a facility which was in operation on September 30, 1985, which has not increased the number of beds since September 30, 1985, and which has no more than 15 beds; (3) payments are for services for individuals in a cluster home; or (4) payments are for necessary therapeutic services which are not available in a family home or community living facility in the States.

Reduces, effective FY 1988, the Federal medical assistance percentage for skilled nursing facility services and intermediate care facility services furnished to any severely disabled individual under age 65.

Requires a State, in order to receive any payments for furnishing community and family support services, to have in effect a system to protect and advocate the rights of eligible severely disabled individuals which is in addition to any provided by the Federal Government as of September 1985.

Permits an individual injured or adversely affected or aggrieved by a violation of the Community and Family Living Amendments of 1985 to bring an action to enjoin such violation.

Requires a State's Medicaid plan to provide for the payment of community and family support services for severely disabled individuals through the use of rates which are reasonable and adequate to assure the provision of services of adequate quality.

Permits a State to provide for the eligibility of any severely disabled individual for community and family support services if such individual spends at least five percent of his or her adjusted gross income for necessary medical care and for community and family support services. Provides that whenever an individual is receiving benefits under title II (Old Age, Survivors and Disability Insurance) of the Social Security Act on the basis of a disability which began before such individual attained the age of 22, and but for those benefits would be eligible under title XVI (Supplemental Security Income) of such Act for either SSI or State supplementary payments then such individual shall be deemed, for Medicaid purposes only, to be receiving SSI or State supplementary payments. Provides for the Medicaid eligibility of a severely disabled individual under age 65 who would otherwise be denied assistance because of earnings if termination of such eligibility would seriously inhibit the individual's ability to continue employment or effectively limit the individual's ability to live in a family home or community living facility and such earnings are not sufficient to provide benefits equivalent to SSI and Medicaid.

Directs the Secretary to: (1) make assessments, conduct a study, and report to the Congress; and (2) issue regulations.

Sets forth the effective date.