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Variable Rate Adjustments

Page posted: 01/01/06

Page reviewed: 08/02/10

Page updated: 05/10/10

Legal Authority

Minn. Stat. §256B.5013, subd. 1


Variable rate adjustment: Recipient-specific rate to fund the increased needs of a recipient’s care due to a significant change in condition.


Significant change in condition includes:

  • • Recipient’s permanent full or partial retirement from participation in a day training and habilitation service or service during the day option
  • • Demonstrated change in a recipient’s medical or behavioral needs that significantly impacts the type or amount of services needed by the recipient
  • To be eligible for a variable rate, the current Base Rate Average Calculation must be below the average base rate calculation for either the Class A or the B facility, however they are licensed.

    Effective July 1, 2003: Facilities with a base rate above the 50th percentile of the statewide average reimbursement rate for a Class A or Class B facility are not eligible for a variable rate.

    Effective July 1, 2009: DHS is unable to approve new variable rate applications with a beginning date of 7/1/09 or later. This includes behavioral, medical and retirement variable rates. DHS is able to renew variable rates in place prior to 7/1/09.

    Effective June 1, 2010: Providers who wish to apply for variable rates with a begin date of 7/1/10 or later may do so. The 2010 legislative session removed the variable rate unallotment suspension for the time period 7/1/10 through 6/30/11.

    Providers with current variable rates who originally applied for 12 months of funding will automatically receive extensions up to the full 12 months. All retirement variable rates will automatically be extended to 12 months from the begin date.


    A variable rate is time-limited. DHS approves variable rates for a maximum of 12 months. DHS is unable to approve a variable rate extension based on the same condition(s) and/or need(s).

    Exception: Providers may resubmit variable rates for permanent DT&H full or partial retirement at the end of each 12-month period for DHS consideration.


    Upon identification of a change in recipient condition that may result in a variable rate request, the county case manager must:

  • • Conduct a full-team screening OR
  • • Update the Individual Service Plan (ISP)
  • • Document the change of condition and goals specific to the condition in the case managers comment section of the screening document or ISP.
  • Complete and submit the ICF/DD Variable Rate Recommendation Form DHS-4677A (PDF) prior to the requested date of service for consideration. DHS will act upon variable rate recommendations no later than 30 days after receipt of a request with complete information.

    Changes in Condition

    The county case manager and/or facility must notify DHS ICF/DD staff of changes in a recipient’s condition that may result in a change to an existing service authorization.

    Example: A service authorization is in place because a recipient has behavioral needs. The recipient’s medication changes and the behavior is eliminated. The county case manager and/or the facility needs to notify DHS ICF/DD staff:

  • • Reason for the service authorization has been eliminated
  • • Variable rate dollars are no longer needed
  • • Cancel the service authorization.
  • Billing

    Use the form HCFA-1500 to bill DHS for approved dollars for appropriate dates and dollar amounts that match the MMIS service authorization. If you have billing questions, contact the MHCP Provider Call Center.


    Annual reporting of variable rate funds and status of the recipient on whose behalf funds have been approved is required for all approved variable rates. ICF/DD Variable Rate Reporting Form and Instructions DHS-4677B (PDF)


    Funds found during any time of the reporting period to no longer be necessary or not be used by the facility to meet the needs of the recipient for whom they were approved are to be returned to the State of Minnesota.

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