A new set of state Department of Human Services rules governing several Medicaid-funded programs for elderly and disabled beneficiaries will go into effect on Jan. 1 after clearing a final Arkansas legislative panel on Friday.

Among other changes, the new rules will impose individual spending caps on waiver services for the approximately 8,800 on the ARChoices program, which pays for caregivers to assist disabled people in their homes with activities such as eating, bathing and other daily routines. (Such at-home services are typically much cheaper than institutionalization in a nursing home and are much preferred by beneficiaries.)


The rules will also cut Medicaid reimbursement rates for assisted living facilities — though the cuts will be phased in over a longer period than originally planned, as per a last-minute deal struck with providers who said the rate cut could lead to facility closures.

On Tuesday, the ARChoices rules ran into legislative opposition at a subcommittee tasked with reviewing agency rules and regulations. But on Thursday, the subcommittee reconvened and passed the rules, despite objections from a small group of senators. Sen. Bill Sample (R-Hot Springs) was among those who attempted to block the rules. He read aloud on Thursday from the U.S. Supreme Court’s “Olmstead” decision, a 1999 ruling that declared people with disabilities have a right to receive services “in the community” rather than in institutions, under the Americans with Disabilities Act.


“Unnecessary institutional segregation constitutes discrimination, which cannot be justified by lack of funding,” Sample quoted.  DHS is seeking to spend less money in programs such as ARChoices to meet a target set by the governor for reducing Medicaid spending growth in Arkansas.

After passage of the Rules and Regs subcommittee on Thursday, the full Arkansas Legislative Council gave the final go-ahead on Friday.


Kevin De Liban, an attorney with Legal Aid of Arkansas, has been engaged in a years-long legal battle with DHS over the agency’s previous iteration of rules for ARChoices, which in 2016 began relying on an algorithm that had the effect of slashing the number of at-home care hours allocated to certain high-needs beneficiaries. De Liban said on Friday that Legal Aid will be watching closely as the changes begin to go into effect next week.

“In a very short span, people will start being subject to it,” he said. “We’ll see how it starts playing out on the ground.”

De Liban said some ARChoices beneficiaries are bound to have their hours cut under the state’s new “individual service budget” model, which will sort ARChoices recipients into three tiers. Those in the highest-need tier will be subject to a budget cap of $30,000 annually; the yearly caps for the middle-need and lower-need tiers are set at $20,000 and $5,000. Beneficiaries will be assigned to tiers based on a new, lengthy assessment of their needs.

The bottom line, De Liban said, is that a cap of $30,000 is insufficient to pay for daily care for those ARChoices beneficiaries with the greatest around-the-clock needs.


“Under the best case scenario … you can get 6.5 hours a day in care, or 46 a week,” he said. “That’s still not enough for a lot of the most limited folks. … These budget caps are going to be destructive to a lot of people.” If ARChoices beneficiaries don’t have access to sufficient at-home care hours, some could be forced to instead move into an institution.

Some beneficiaries who now receive services that cost above the $30,000 yearly cap will be grandfathered in at that higher rate for a single year (and a slighly lower rate for the following year).

The effective 46-hour limit will be better than the effective limit under the current system, De Liban acknowledged, in which a beneficiary’s maximum number of hours is around 37 per week. But it’s less than what people were receiving two years ago, when DHS first began trying to drive down the number of allocated hours by implementing its current algorithm-based system, which sorts people into “resource-utilization groups” or RUGs.

“I don’t think RUGs is a valid point of comparison, because it was still a reduction” over what the state did for years before that, De Liban said. ARChoices never attracted complaints about insufficient hour allocation before DHS began implementing the changes two years ago, he said.  De Liban argued that the state could address his clients’ concerns simply by increasing their individual budget cap to $36,000 or $39,000, which would allow benficiaries to pay for 8 hours of care per day.

“Adjusting the [individual services] budget upward would not be a budget breaker for the whole program … and would ensure that people who are most acutely limited wouldn’t face institutionalization,” he said.

DHS representatives on Thurday pointed out that the individual services budget only applies to certain services under the ARChoices waiver, which is intended to provide assistance for activities of daily living (mobility, feeding and toileting) rather than health care.

“They do not limit anything that is available to a beneficiary under the rest of the Medicaid program — things like personal care (up to 64 hours per month of in-home care), home health visits, private duty nursing, prescription drugs, hospital care and doctor visits,” a fact sheet distributed by the agency stated.