An increasing number of people with intellectual and developmental disabilities are on waiting lists and financial pressures are mounting on already-strained service providers with no relief in sight.

A report out this week finds that the nation’s system of disability services remains under severe pressure as years of workforce shortages and other challenges persist.

Waiting lists for home and community-based services rose 3.3% in 2023 to include about 497,000 people. The figures could be even higher, the report finds, with states using new terminology like “referral lists” and “registries” to indicate that people are waiting for supports.

The annual report known as the “Case for Inclusion” analyzes nearly 80 indicators to determine how well states are supporting those with developmental disabilities in the community. It’s produced by United Cerebral Palsy and the American Network of Community Options and Resources, or ANCOR, a group that represents disability service providers nationally.

At the heart of the challenges facing the disability service system is difficulty attracting and retaining direct support professionals who help people with disabilities live in the community.

A survey last year found that nearly all service providers experienced moderate to severe staffing shortages, leading almost half of providers to end some programs or services. Meanwhile, 77% of providers said they were turning away new referrals and 72% acknowledged that they were struggling to meet quality standards.

“The direct support workforce crisis continues to represent the single greatest risk to community access and inclusion for people with IDD who need home and community-based services to avoid the kind of unnecessary institutionalization we outlawed in the U.S. in 1999,” said Barbara Merrill, CEO of ANCOR. “Despite small increases in starting wages made possible by emergency pandemic funding and regulatory flexibilities, providers struggle to remain competitive with hourly wage industries offering higher pay and better benefits with less demanding work and training requirements.”

The report cites the experience of CADENCE of Acadiana, a provider in Lafayette, La. that sought to take over care for another provider that closed.

“None of the staff that worked with the previous agency have applied to continue supporting the individuals we are now serving,” said Erica Buchanan, executive director of CADENCE of Acadiana. “We share the state’s goal of ‘getting individuals served,’ but there is simply not enough direct support staff, support coordination staff or specialty providers who can deliver the service at the rate and requirements that come along with the task.”

As a result, CADENCE of Acadiana is seeing longer and longer delays in getting new referrals approved and started with services.

Now, advocates say the situation could get worse with emergency funds provided by the federal government during the COVID-19 pandemic set to expire and proposed regulations that would increase costs for providers without any associated increase in Medicaid reimbursement rates. For example, the report indicates that a proposed rule making more workers eligible for overtime could cost providers more than $1 billion in the first year if it’s finalized.

Amid the bleak picture the report paints, advocates noted that 17 states and Washington, D.C. have closed all of their state-run institutions, with Kentucky joining the list in the last year.

In addition, the findings show that the situation is far from uniform across the nation. About 80% of those on waiting lists in 2023 lived in just five states — Texas, South Carolina, Florida, Illinois and North Carolina — and Texas alone accounted for nearly two-thirds of people with disabilities on such lists nationwide.

Those behind the new report are calling on federal policymakers to increase funding for Medicaid home and community-based services and to require states to regularly review reimbursement rates to ensure that they are adequate, among other steps.