A district court has ruled that Nicholas Bessey can continue his legal fight over the state's use of an algorithm-driven tool to decide Medicaid funding for people with intellectual and developmental disabilities. The ruling means Bessey's lawsuit against the Nebraska Department of Health and Human Services will move forward, even as the state had sought to have most of his claims thrown out.
The Ruling and What It Allows
The Ruling and What It Allows A Nebraska court allowed Bessey's case to proceed, according to the Lincoln Journal Star. Nebraska had sought partial dismissal of the lawsuit, per court filings cited by the paper. Mark Bestul discussed the process in a statement reported by the Journal Star.
A Decade of Stable Funding, Then a Sharp Cut
A Decade of Stable Funding, Then a Sharp Cut Bessey had received services at the high level of care for 14 years before Nebraska's new assessment tool changed that, the Journal Star reports. Reports put his funding cut at about 35 percent, or nearly $68,000, after he moved to a lower tier following an HHS assessment. A separate amended petition for review, filed in Lancaster County District Court on March 19, 2026, by his sister and legal guardian Angela Bessey, says a January 14, 2026, DHHS order affirmed reducing his annual budget from $194,279.86 to $126,437.19.
Angela Bessey said her brother enjoyed simple aspects of life most people take for granted, according to the Journal Star's reporting. Bessey's legal challenge includes constitutional allegations and a statutory appeal. His amended petition for review goes further, alleging that Nebraska's rules and guidance never disclosed the criteria or methodology DHHS uses to assign funding tiers through what the state calls its Objective Assessment Process. The petition states plainly that those criteria, standards or methodologies have not otherwise been promulgated.
Disputed Scoring and an Administrative Denial
Disputed Scoring and an Administrative Denial The amended petition also alleges the InterRAI assessment itself was incorrectly scored on several items. His lawsuit seeks a declaratory judgment and an injunction to stop the current assessment process from being used, and his amended petition separately asks the court to reverse the funding decision or, alternatively, to order DHHS to re-administer a lawful Objective Assessment Process, per the filing.
Nebraska implemented the InterRAI tool in July, according to the Journal Star, while a separate petition filed by Curt Safranek states that DHHS implemented InterRAI in 2025. The state has said the tool could be used for multiple purposes, including reducing administrative costs and the number of assessments required of people receiving Medicaid funding. Families and caregivers have raised concerns about inaccurate assessments, funding cuts and difficulty understanding decisions.
A Pattern Playing Out Statewide
A Pattern Playing Out Statewide Bessey's case is not an isolated complaint. Nearly 600 Nebraskans with disabilities had their funding levels cut under InterRAI, according to Flatwater Free Press. Separately, KETV reported that 785 people saw a decrease in their funding since the previous April, citing the state's latest InterRAI results report; the station also reported that DHHS said 450 people had appealed their decisions, with 149 of those appeals dismissed.
Flatwater Free Press, describing DHHS's March report, wrote that more than half of the roughly 3,400 Nebraskans receiving waivers saw no change to their funding and about a quarter moved to an increased tier. DHHS has also said that approximately 80% of Nebraskans' funding levels stayed the same or increased after InterRAI assessments, according to a DHHS news release reproduced in the Safranek petition materials. One family's experience illustrates what a tier drop can mean in practice: Flatwater Free Press reported that Doug Straub moved from the high to intermediate tier, cutting funding for his day program by about 50%.
Legal Aid Pushes for Transparency
Legal Aid Pushes for Transparency Elizabeth Edwards has called for clear explanations of funding decisions and a meaningful opportunity to challenge them. She has also said that using an algorithm does not relieve the state of its responsibility to make lawful, transparent and explainable decisions.
