Arkansas Department of Human Services v. Ledgerwood
2017 Ark. 308
| Ark. | 2017Background
- Appellees are low-income, profoundly disabled beneficiaries of Arkansas’s ARChoices in Homecare Medicaid waiver who receive attendant-care hours for daily living assistance.
- For ~17 years DHS relied on nurse discretion via the ArPath assessment to set weekly attendant-care hours (commonly up to 56 hours); DHS adopted a new RUGs reassessment system that assigns beneficiaries to algorithmic tiers with fixed hour allotments and removes nurse discretion.
- DHS issued a rulemaking packet in late 2015 to renew and combine waiver programs (effective Jan. 1, 2016); appellees allege the published Notice of Rulemaking omitted any specific disclosure that RUGs (the new assessment methodology) would be adopted.
- After reassessments under RUGs in 2016, appellees’ attendant-care hours were substantially reduced (often ~40–56% reductions), producing harms such as going without food, remaining in soiled clothing, missed treatments/turnings, increased fall risk, isolation, and worsened medical conditions.
- Appellees sued for declaratory relief challenging the validity of the RUGs rule under Arkansas’s APA and moved for a temporary restraining order (TRO) to prevent DHS from reassessing them or reducing hours under RUGs; the circuit court granted the TRO and enjoined reassessments pending further proceedings.
- DHS appealed interlocutorily, arguing the circuit court abused its discretion in finding irreparable harm and likelihood of success on the merits, and that claims were nonjusticiable or required exhaustion of administrative remedies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Justiciability / ripeness | Plaintiffs belong to class affected by RUGs; actual reductions already occurred, creating a live controversy | DHS: claims speculative or contingent on future reductions; not ripe | Court: Justiciable — reductions already occurred and TRO addresses present harms |
| Irreparable harm (TRO requirement) | Reductions caused non-monetary harms (lack of food, soiling, missed care, increased fall risk) that money cannot remedy | DHS: harms are speculative or compensable; no basis for irreparable-injury finding | Court: Appellees showed irreparable harm; TRO properly issued |
| Likelihood of success on merits (APA §25-15-204 notice) | DHS failed to provide proper notice of RUGs in its Notice of Rulemaking; evidence (notice omission, Cloud letter, hearing record) shows lack of substantial compliance | DHS: substantially complied with notice requirements; beneficiaries had actual knowledge | Court: Appellees demonstrated a substantial likelihood of success that DHS did not substantially comply with §25-15-204 |
| Exhaustion of administrative remedies | Plaintiffs: exhaustion not required where irreparable harm or futility; statute allows declaratory action without agency prior ruling | DHS: plaintiffs should have exhausted administrative remedies first | Court: Exhaustion not required due to irreparable harm/futility and §25-15-207(d) permits declaratory relief without prior agency action |
Key Cases Cited
- Three Sisters Petroleum, Inc. v. Langley, 348 Ark. 167 (2002) (TRO issuance rests in circuit court’s sound discretion)
- Doe v. Ark. Dep’t of Human Servs., 357 Ark. 413 (2004) (appellate review of TRO in abuse-of-discretion terms)
- Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981) (plaintiff need not prove case in full at preliminary-injunction hearing)
- Kreutzer v. Clark, 271 Ark. 243 (irreparable harm is essential for injunctive relief)
- Custom Microsystems Inc. v. Blake, 344 Ark. 536 (2001) (likelihood-of-success is measured by reasonable probability of success)