Disability Waiver Rates System ongoing evaluation

To ensure that service rates accurately reflect costs, DHS is conducting ongoing analysis of provider costs. Costs include staff wages, supervisor and management wages, employee benefits, taxes, training costs, indirect time costs, insurance and tax costs, program costs and business costs. 

DWRS cost reporting

Beginning in 2020, DHS will collect cost information about the provision of DWRS services from all providers that provide at least one DWRS service, as required by Minn. Stat. §256B.4914, subd. 10a. Data gathered from this work will inform evidence-based rate recommendations to the Legislature. The collection of this data on an ongoing basis will inform cost drivers and rate setting for the four disability waivers. We will publish reports on the findings of cost reporting in 2021 and every four years after. For more information about this effort, please visit the DWRS cost reporting website.

Other cost component research

In 2015, DHS commissioned an independent research firm, Truven Health Analytics, to examine the non-wage costs required by HCBS providers. Non-wage costs include costs such as taxes, training, benefits, insurance, business costs and program costs. Researchers surveyed home and community-based providers in Minnesota and collected cost information from independent data sources. Researchers completed this project in June 2016. DHS published their findings in the 2017 DWRS Legislative Report (PDF). Evaluation of provider costs and DWRS cost components is an operational requirement of DWRS implementation. The Centers for Medicare & Medicaid Services (CMS) requires rate structures to be re-based at least once every five years. This analysis will be ongoing. DHS will publish research findings in reports to the Legislature.

The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10b) to study regional differences in waiver service provider costs across the state. It also required DHS to use research findings to incorporate a component within the Disability Waiver Rate System frameworks that accounts for regional cost differences.

In 2014, DHS commissioned a study on cost differences across the state. The study found that staff wages, which are the predominant cost in providing HCBS services, varied significantly across the state. Researchers developed regional variance factors from this data. Beginning Jan. 1, 2016, the regional variance factors were incorporated into the Rate Management System. For more information on the study findings and resulting factors, see the Regional variance factors study report (PDF).

The Legislature requires DHS to update regional variance factors every five years. DHS completed an updated analysis in 2017. Beginning Jan. 1, 2018, DHS will incorporate updated regional variance factors into the Rate Management System. For more information on the updated study and findings, see the 2018 Regional Variance Factor Summary webpage.

The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10b) to study the following transportation data for day services:

• Incidents of shared and individual rides
• Lift requirements
• Mileage
• Units of transportation for day services

Research completed in 2015 found that the average historical price for day training and habilitation daily transportation was $11.50 per day, while the average price calculated by the pricing structure in statute is $14.50 per day. This research also found that the average time spent in transit was approximately an hour each day. As a result of this research, the Rate Management System applied the legislated transportation values to full-day day training and habilitation frameworks as of Jan. 1, 2016.

DHS will continue to examine trends in the use of transportation and the time people spend in transit.

In 2017, the Legislature directed DHS (Laws of Minnesota 2017, chapter 6, article 1, section 48) to study the current transportation system available to people who receive home and community-based waiver services. Transportation is a critical issue that affects people’s ability to access the services they need. DHS contracted with Navigant Consulting to conduct a study of transportation, including the current fleet available, the methods that people use to access transportation, solutions used in other states and provider costs required to administer transportation services. We used the study findings to recommend ways to improve timely access to waiver transportation services and for the development of a DWRS rate framework for waiver transportation services. DHS published the study findings in the Access to Waiver Transportation Used by Minnesota’s Home and Community-Based Program Participants report (PDF).

DWRS frameworks include an absence and utilization factor to account for costs incurred when providers aren’t able to provide and bill for planned services. The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10(i)) to study the cost of recipient absences in day services and submit recommendations on the appropriate value for absence costs in day service rate formulas. DHS analyzed the value of this component in the DWRS frameworks and published the findings in the Disability Waiver Rate System Absence Factor in Day Services Study report (PDF).

The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10c) to study the average difference in service rates before DWRS implementation to rates calculated by the Rate Management System. This analysis measures the projected fiscal impact of the Disability Waiver Rate System to service rates when the banding period ends. This analysis was ongoing throughout the banding period. DHS published the most recent findings in the December 2018 Disability Waiver Rate System Impact Study Semi-Annual Report (PDF).

The Legislature requires DHS (Minn. Stat. §256B.4914, subd. 14) to analyze rate exceptions, including the number of exception requests received, the numbers granted, denied, withdrawn and pending, and the average time required to process exceptions. This analysis is ongoing and conducted on a quarterly basis. A summary of 2016 rate exceptions may be found in the 2017 DWRS Legislative Report (PDF).

In 2015, DHS commissioned a study on the projected cost of DWRS rate exception requests when banding is no longer available. The study identified trends and characteristics of projected rate exception requests, such as common exception reasons, cost drivers, diagnostic categories and particular services. DHS published the findings of this study in the 2017 DWRS Legislative Report (PDF). 

In 2018 and 2019, DHS analyzed the cost of DWRS rate exceptions in conjunction with the processing of rate exceptions for people with banded rates. This analysis included cost projections for the state and lead agencies, as well as identification of trends in recipients, cost drivers and services necessitating a rate exception.

DHS is conducting analysis to identify trends in the inputs that lead agencies enter into the Rate Management System to calculate a rate. RMS inputs include fields such as the number of staffing hours provided, nursing hours and staffing ratios. These inputs are fundamental to the calculation of rates. DHS is studying these inputs by lead agency, provider and service.

Lead agencies are required to use the Rate Management System to calculate rates for HCBS services governed by DWRS in statute. DHS monitors compliance for each lead agency to ensure that the agency is using the system accurately to calculate rates.

In this analysis, DHS compares MMIS authorizations to Rate Management Systems data. We are evaluating the use of RMS as well as how often manual banding is used. DHS will conduct this analysis on a lead agency, provider and service level. We will conduct it monthly throughout the implementation of DWRS. The Centers for Medicare & Medicaid Services require DHS to report on compliance.

As the banding period ends, DHS plans to conduct a time-series analysis examining trends and shifts in service use. This analysis will also include trends and shifts in the provider market.

In 2019, the Legislature directed DHS (Laws of Minnesota 2019, 1st special session, chapter 9, article 5, section 89) to develop a new rate methodology for family foster care and submit recommendations for the new rate methodology. DHS published the report in January 2020.

The Legislature requires DHS (Minn. Stat. §256B.4914, subd. 10h) to study policy options for implementing financial incentives for disability services providers to improve the quality of care. This analysis includes stakeholder engagement, alignment with existing alternative payment models in the state and a review of how other jurisdictions have implemented similar programs. DHS intends to identify potential outcome measures and payment models that could be implemented along with DWRS. DHS will publish this report in October 2020.