Idaho Medicaid Home and Community Based Services Care Cuts

Problem Statement

The Idaho Medicaid agency adopted a new formula for assessing individual budgets available to people with intellectual and developmental disabilities through their home and community based services (HCBS) waiver program. When the formula went live, many people noticed large cuts in their budgets, elevating the issue to advocates. After a class-action lawsuit, K.W. v. Armstrong, led to the discovery of the assessment formula and its origins, the formula was deemed arbitrary and unconstitutional. Initially, the state claimed that the formula they use to determine Medicaid assistance was a “trade secret,” but the court quickly ordered the state to disclose it on due process grounds. Additionally, advocates found during litigation that the formula was developed using faulty data and had fundamental statistical flaws—making its decisions effectively arbitrary.

Status of Issue

K.W. v. Armstrong was settled in 2016, after the algorithm had already affected about 6,000 people. The settlement guaranteed that people whose budgets were cut would continue to get their original budgets, at least until the implementation of a new “fair” system. The court ordered the state to audit the new system and make the determination logic public. The settlement agreement also required the state to collaborate with people using Medicaid services in developing the new system. However, new challenges emerged in trying to design a “better” algorithm for determining individuals’ Medicaid budgets—a hallmark of what we see as “Measurement” issues in our Making Sense of Technology Problems Framework—and the state has been slow to complete this part of the settlement. Advocates found that the decision-making algorithm had positive and negative effects on different people, and that transparency of the system could only help so much.

In a post-settlement dispute in 2023, the parties disagreed over the limited dissemination of the Supports Intensity Scale - Adult’s Version (SIS-A) User’s Manual, which is a document that was available for purchase on the SIS-A creator’s website. The SIS-A is part of the new resource allocation model and budget tool the state was planning to use for calculating HCBS budgets. The state argued SIS-A tool was proprietary information of its creator, AAIDD, and the user’s manual could not be released as part of the resource allocation process. The court agreed with the plaintiffs that due process required that the manual, either in whole or part, may be required to be released to individuals during the resource allocation process.

Links to More Information

ACLU of Idaho Case Tracking Page

ACLU’s K.W. v Armstrong press release

ACLU’s Blog Post on K.W.

K.W. v. Armstrong settlement discussion (2023)

Richard Eppink: “Why an Advocatocracy over Automated Decisionmaking Is a Bad Idea”

AI Now Institute’s Litigating Algorithms 2019 US Report - Session 1: You Won! Now What?

National Health Law Program - Demanding Ascertainable Standards: Medicaid as a Case Study