Meanwhile, the ICFs/MR program emerged.
During the 1970s, billions of federal dollars were spent turning older state institutions and developmental centers into newer ICFs/MR. The ICFs/MR program essentially created financial incentives for keeping people in large state facilities and diverted funds that could have been used for community programs.
By the end of the decade, the federal ICFs/MR program was subsidizing the costs of institutionalization for the vast majority of people with developmental disabilities living in public institutions and nursing homes. By 1984, annual payments reached between $3 and $4 billion per year.
The program made federal funds readily available for institutionalization and required states to use scarce resources to construct and renovate facilities so they met ICFs/MR standards. As allowed under the program, some states used IFCs/MR funds for private institutions, rather than investing in community alternatives.