Evette King recently sat in her south Atlanta home fretting about how she could avoid eviction without someone to watch, feed and bathe her severely autistic son so she can work and pay the bills.

Last spring, King’s 19-year-old son, Gerald Stephens, joined a growing number of Georgians with mental illness or developmental disabilities who have been discharged or are at risk of being cut off from a state program that has been a life line for thousands of elderly and disabled people for the past 15 years.

The program -- which provides housekeeping, transportation to adult day centers, care management and other services -- not only helps people avoid ending up in nursing homes but ultimately saves taxpayers money, advocates say. Caring for someone in the community costs thousands of dollars less each month than in a nursing home.

In 2007, however, a federal agency told the state it had to move the program known as SOURCE -- Service Options Using Resources in a Community Environment -- under a different umbrella. The new, more restrictive framework limited it to the elderly and physically disabled -- excluding some people who suffer from schizophrenia, Down syndrome, bipolar disorder, depression, and other mental and developmental disabilities.

"It's destroying people's lives," said Talley Wells, an Atlanta Legal Aid Society attorney who represents half a dozen individuals in danger of being eliminated who sued the state in 2010.

Under the more stringent rules, the state Department of Community Health has had to carefully reassess on a case-by-case basis whether SOURCE participants require a nursing home level of care. That includes people with physical disabilities whose health may have improved over time, said Catherine Ivy, deputy director of aging and special populations in the agency’s Medicaid division.

“The state is not discharging people because they have a mental illness or have a developmental disability,” Ivy said. “We agonize over these decisions.”

If the state doesn’t strictly follow the new guidelines for the Medicaid-funded program, it could risk losing federal money, she said, adding that SOURCE continues to serve mentally ill and developmentally disabled individuals who also have physical impairments. Those discharged keep their other Medicaid benefits, such as hospital and pharmacy services.

More than 19,000 Georgians receive services through SOURCE, which was launched in 1997. Through it, case managers and primary care doctors work together to coordinate individuals’ long-term care.

The average monthly cost to Medicaid per SOURCE participant totaled $1,538 in fiscal 2007, compared with placement in a nursing facility at $4,369, according to a state audit report. That year, SOURCE cost $92.3 million, with 62 percent paid by the federal government, the report shows.

Last year, in a letter to a top federal health official, Gov. Nathan Deal touted SOURCE as a model for fostering better coordination of care and preventing unnecessary long-term institutionalization, while improving cost efficiency and people’s well-being.

The loss of services comes at the same time Georgia is also shelling out tens of millions of dollars to move mentally ill and developmentally disabled people out of state institutions -- an effort spurred by a U.S. Department of Justice investigation into the abuse and deaths of dozens of mental hospital patients. A series of articles by The Atlanta Journal-Constitution uncovered the abuse starting in 2007.

The Department of Community Health said it doesn't have information on how many people with mental illness or developmental disabilities have been discharged from SOURCE. But Wells said his office has received calls weekly since the beginning of 2010 from families in danger of losing funding, and he estimates hundreds could be affected.

The department reassesses annually whether people still qualify for the program, and those discharged are given 30 days' notice. Workers help those discharged to find alternative services.

Mental health services in Georgia have long been underfunded, leaving programs such as SOURCE as safety valves, said Hunter Hurst, the founder of the program and director of the St. Joseph’s/Candler health system’s Georgia Infirmary in Savannah. Limited dollars along with strict Medicaid funding guidelines have presented challenges, Hurst said.

“The rules really are very, very specific as to who can get which service,” he said. “Is the service they qualify for going to serve them well?”

Community-based care makes both good medical and fiscal sense by keeping people healthy -- eliminating avoidable and expensive hospital visits -- said Thomas Bornemann, director of the Carter Center’s mental health program. A person with mental illness who has a chronic illness such as diabetes could end up in the emergency department in danger of having a limb amputated, which costs a lot more money than preventive care, Bornemann said.

At the same time, Medicaid programs across the country have been under an intense spotlight as states increasingly face fiscal pressures and are looking for ways to be more efficient, Bornemann said.

For King, the SOURCE discharge notice came as a shock.

“I thought they were joking,” she said, adding that the department didn’t help connect her with other services. “It’s pushed us back a lot.”

Without a caregiver to watch Gerald, who needs constant monitoring, King is only able to work a couple of days or so each week when her adult daughter can help out.

King, who also has an 11-year-old son, has scraped together enough money to keep the lights on so far, but it’s unclear how she’ll be able to keep paying rent. Gerald recently became eligible for a different Medicaid-funded program for the developmentally disabled, but thousands of people are on the waiting list, said Wells, who is working with the family.

The Georgia Department of Behavioral Health and Developmental Disabilities is doing what it can to help people affected by the changes to SOURCE find housing, but resources are limited, spokesman Tom Wilson said.

The agency is overseeing the roll-out of new services under the Justice Department settlement, which some former SOURCE recipients might be eligible for if they’re often readmitted to hospitals or in danger of becoming homeless, Wilson said.

“It is difficult," he said, "when [someone] lacks a stable home to maintain recovery.”