In a strongly worded bench ruling Wednesday, Pulaski County Circuit Judge Wendell Griffen enjoined an emergency rule promulgated last week by the Arkansas Department of Human Services, calling it “a deliberate and calculated disobedience” of the permanent injunction he delivered last week. The judge found the agency in contempt for its actions.

The emergency rule concerned the allocation of attendant care hours for disabled and elderly Medicaid beneficiaries in the ARChoices waiver program, which pays for caregivers to assist with activities such as bathing, cleaning and other daily routines. (Such at-home services are typically much cheaper than care in a nursing home and are much preferred by beneficiaries.) Seven disabled plaintiffs, represented by Legal Aid of Arkansas, say DHS effectively cut their benefits in 2016 when it began using a computer algorithm to determine how many hours of care each person on ARChoices should receive each week. The plaintiffs argued DHS did not follow state law regarding the rule-making process when it implemented the algorithm-based method. Previously, an individual’s weekly number of hours was determined by a nurse. (Here’s some background on the issue.)

On May 14, Griffen sided with the plaintiffs and ordered DHS to stop using the algorithm to allocate hours unless it properly promulgated a new rule — meaning the rule would undergo public comment and a legislative review process. However, DHS responded by seeking an emergency rule instead, claiming that the expedited process was necessary for it to avoid disrupting services to beneficiaries. A legislative panel approved the emergency rule on Friday, May 18, thus reinstating the algorithm. That prompted Legal Aid to again seek redress from Griffen.

On Wednesday, the judge gave the plaintiffs what they sought. The emergency rule, he said, amounted to “an attempt to circumvent the injunction” he had issued on May 14:

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The question, however, is whether or not the emergency rule promulgated on May 18, based upon a presentation made by the agency on May 17, 2018, is different in substance from the rule that was the subject matter of this lawsuit in January 2017.

The Court finds it is not. This is the same old rule offered, presented to the legislature almost a year-and-a-half after it was initially challenged by the plaintiffs in this case for not being in compliance, promulgating compliance, with the Administrative Procedures Act [the state law regarding rulemaking]. One does not comply with the notice and procedures requirements of the Administrative Procedures Act by presenting the same kind of rule that has been judicially determined to be non-compliant and use that subsequent presentation as proof of an emergency.

DHS had said its use of the emergency rulemaking process was justified because it had to have a replacement rule to stay in compliance with federal Medicaid authorities. ARChoices was created by means of a waiver from the federal Center for Medicare and Medicaid Services. DHS argued that the terms of the CMS waiver obligate it to stick with the algorithm and said it couldn’t perform assessments on new beneficiaries (or reassessments for existing ones) if it was forced to drop the methodology. DHS attorneys warned in April that home care services might stop if a court order forced the agency out of compliance with CMS.

But Kevin DeLiban, a Legal Aid attorney representing the plaintiffs, said later on Wednesday that DHS’ argument was wrong. “There’s nothing in the [ARChoices] waiver that says DHS cannot just have its nurses, who assess people, to also make decisions about how much attendant care somebody should receive. And there was nothing in the waiver itself that says DHS has to use [the algorithm] to allocate attendant care hours.”

Griffen agreed. DHS failed to show any evidence that “the nurse’s assessment process that existed between 2013 and the end of 2016 has been declared unacceptable by
… CMS,” he said. “Put simply, the emergency rule is an emergency only because the agency chose to call it that. It’s a manufactured emergency, emergency by design.”

The judge especially took issue with DHS’ insistence that the emergency rulemaking was a good-faith effort to follow his previous order enjoining the agency from using the algorithm.

“The agency filed notice that it was complying with this court’s order which permanently enjoined it from using RUGs methodology by promulgating an emergency rule that uses RUGs methodology,” he said. (The algorithm allocates hours by sorting beneficiaries into “resource utilization groups,” or RUGs.)

“That statement not only begs credulity, it is manifestly preposterous,” Griffen said. “The Court therefore grants the motion the motion for contempt and will direct the agency to file its notice not less than seven calendar days from this date as to why it should not be sanctioned for that contempt.”

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