Arkansas Supreme Court

The Arkansas Supreme Court on Thursday reversed an order from a Pulaski County judge who had held the state Department of Human Services in contempt of court. Last May, Circuit Court Judge Wendell Griffen found DHS in contempt due to its “deliberate and calculated disobedience” regarding the agency’s rulemaking for ARChoices, a program which pays for at-home caregivers to assist disabled and elderly Medicaid beneficiaries.

The justices were split, 5-2, with Chief Justice Dan Kemp and Justice Jo Hart dissenting. The ruling appears to have no immediate impact for ARChoices beneficiaries.

Here’s the majority opinion and the dissent.

The case began after DHS started using an algorithm to allocate attendant care hours to ARChoices beneficiaries, resulting in a reduction of weekly hours for many individuals. A group of disabled beneficiaries, represented by Legal Aid of Arkansas, sued DHS. They argued the agency hadn’t followed state law regarding the rulemaking process when it created the algorithm-based method. (Without sufficient attendant care hours, some beneficiaries are unable to remain in their homes, meaning they must move to a nursing home or other institution.)

On May 14, Griffen sided with the plaintiffs and ordered DHS to stop using the algorithm until it “properly promulgated” a new rule, which would have to undergo a public comment and review process. Instead, DHS responded to the judge’s injunction by establishing an emergency rule to reinstate the algorithm-based method. It claimed the expedited process was necessary to avoid disruption of services to beneficiaries.

The plaintiffs objected, and, on May 23, Griffen enjoined the emergency rule as well. In doing so, he said DHS had intentionally circumvented his May 14 injunction. “Put simply, the emergency rule is an emergency only because the agency chose to call it that,” he said at the time. “It’s a manufactured emergency, emergency by design.”

Justice Shawn Womack wrote the majority opinion issued Thursday, saying Griffen’s contempt order was in error because DHS had ” ‘properly promulgated’ the emergency rule under the statutorily prescribed process.”

“To be sure, the permanent injunction was issued because of the circuit court’s finding that DHS had failed to substantially comply with the [Administrative Procedures Act’s] notice and public comment requirements. But the express terms of the permanent injunction order did not preclude the adoption of an emergency rule utilizing the [algorithm-based] methodology,” Womack wrote.

Griffen himself has a tangled and highly contentious history with the state Supreme Court that includes an ongoing judicial misconduct complaint Griffen has filed against the justices.

In his dissent, Kemp said Griffen’s contempt order was justified. “The key question is not whether DHS properly promulgated an emergency rule, but whether DHS should have promulgated an emergency rule at all. In my view, the circuit court correctly found DHS in contempt because the agency purposely promulgated an emergency rule implementing the exact … methodology from which it had been permanently enjoined,” the chief justice wrote.

Kemp also said DHS “failed to offer any evidence of an ‘imminent peril to the public health, safety, or welfare’ “ that would have justified its use of the emergency rulemaking process last year. At the time, the agency had said it was necessary to create an emergency rule employing the algorithm-based method because the terms of the state’s agreement with federal Medicaid authorities demanded such a method. But Kempt cited testimony from DHS officials last year contravening that explanation, including that of Rose Naff, the then-director of DHS’ Division of Medical Services.

“Naff testified that, despite signing the emergency-rule justification, she did not know of any facts establishing imminent peril to public welfare by the court’s memorandum order, nor did she know of any person or office at DHS who had knowledge of those facts. She testified that the agency would not lose federal funding for current recipients in the program,” Kemp wrote.

In addition to appealing Griffen’s contempt order, DHS had also asked the Supreme Court to overturn Griffen’s temporary restraining order enjoining the emergency rule. But that question is now moot because in the intervening months DHS has adopted a new rule that has superseded the emergency rule.

Kevin De Liban, the Legal Aid of Arkansas attorney who first brought the suit challenging DHS’ previous method of allocating hours for ARChoices, said the agency’s new method was also creating problems for beneficiaries.

“In the last six weeks, Legal Aid has received around 30 calls from people who have been terminated from services. … In many cases, these are people that have been on the program for many, many years,” he said. A few people recently have also contacted Legal Aid in recent weeks over reductions in their hours, he said.

“We’ve appealed the terminations and will be fighting vigorously any attempts to force our clients into a nursing home,” De Liban said.