From RUGs to ARIA — Arkansas's Home-Care-Hours Algorithm and the Due-Process Suits That Reshaped It

In 2016, the Arkansas Department of Human Services (DHS) introduced RUGs (Resource Utilization Groups), an interRAI-based clinical classification algorithm, to set weekly home-care hours for Medicaid beneficiaries with disabilities, replacing individualized nurse assessments.
Nearly half of home- and community-based-services beneficiaries saw their hours cut. In one widely reported case, a recipient's hours fell from 56 to 32 a week despite no change in her condition.
Courts in Jacobs v. Gillespie (federal) and Ledgerwood v. Arkansas DHS (state, upheld by the Arkansas Supreme Court in 2017) found the algorithm violated due process by giving no meaningful explanation for the cuts. DHS retired RUGs and in 2019 adopted ARIA (Arkansas Independent Assessment), built by consulting firm Optum, which also determines eligibility and sets a budget cap; over a quarter of assessed individuals became ineligible under the new system, and the overall weekly hours cap fell from 56 to 46.
A further suit, Elder v. Gillespie, again found due-process problems with ARIA; a 2022 settlement, including nearly $500,000 in payments, required DHS to give detailed written reasons for cuts and to continue benefits during appeals. Advocates, including Legal Aid of Arkansas, report that arbitrary-seeming cuts have persisted even after these procedural fixes — a caution that adding notice requirements does not by itself guarantee accurate or fair algorithmic assessments.

Read the full analysis: https://www.btah.org/case-study/arkansas-medicaid-home-and-community-based-services-hours-cuts.html