Nebraska Pays $420K for Independent Review of interRAI Disability Tool

For health IT and Medicaid leaders, Nebraska's interRAI controversy shows what happens when algorithmic assessment tools go into production without a built-in audit loop. A $420,000, four-month Alvarez & Marsal review announced August 19, 2026 will assess the tool's effectiveness and implementation after more than a year of family complaints about lost funding. The case has immediate lessons for health systems, payers, and vendors deploying standardized need assessments.

Nebraska’s Department of Health and Human Services (DHHS) is taking the unusual step of paying an outside contractor to assess the assessment tool that families blame for cutting services to developmentally disabled residents. Alvarez & Marsal will receive $420,000 for a four-month review of the interRAI assessment system’s effectiveness, implementation, current effect on families, and potential improvements, according to state officials and advocates. The announcement, reported on August 20, 2026, comes about 13 months after Nebraska began using interRAI for developmental disability waivers in July 2025.

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Alvarez & Marsal will receive $420,000 for a four-month review of the interRAI assessment system’s effectiveness, implementation, current effect on families, and potential improvements, according to state officials and advocates.

interRAI is a family of standardized clinical assessment instruments used in health and long-term care settings to evaluate needs and inform resource allocation. When those instruments are tied to public funding, small scoring changes can have oversized consequences for beneficiaries. In Nebraska, families say the inappropriately assessed cases have caused necessary funding to be reduced, pushing vulnerable people into appeals and creating anxiety about care continuity. Lehn Straub, a family member and advocate, called on Governor Jim Pillen to pause all funding reductions and stop the need for appeals, arguing that the state should not treat its most needy citizens inhumanely.

Provider organizations are watching closely. Craig Casados, executive director of the Nebraska Association of Service Providers, said he spoke with Tony Green, DHHS director of disability and aging, who assured him the state is fully engaged with the review. Casados relayed Green’s statement that the department is '100% looking for the results' and will make changes if the review shows the rollout was seriously flawed. That framing positions the contract as a genuine accountability exercise rather than a box-checking exercise, but it also leaves the current reductions in place while the review runs.

The conflict-of-interest question adds a layer of procurement risk. Advocates noted that a former DHHS deputy director of eligibility and quality now works as a manager at Alvarez & Marsal. DHHS responded that the state had intended to conduct an independent evaluation before launching the tool in July 2025 and that this former official will not be involved in the project. That may be factually true, but it does not fully remove the perception problem: an agency hiring a firm that employs one of its former leaders creates optics that can undermine public confidence in the evaluator, even if the individual is recused.