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DSD eList announcement

Date: Aug. 4, 2021
To: Service providers and all interested parties
From: DHS Disability Services Division
Purpose: To announce policy guidance for DWRS inflationary fund use and distribution reports
Effective: Jan. 1, 2022, or upon federal approval
Contact: dsd.rates@state.mn.us

Provider requirements for inflationary adjustment distribution reports

Minnesota law (Minnesota Statute 256B.4914, subdivision 5) requires each provider that receives revenue from upcoming Disability Waiver Rate System (DWRS) framework wage and inflation updates to use 80 percent of new revenue to support employee compensation between Jan. 1, 2022, and March 31, 2024.

By Dec. 31, 2022, providers also must prepare and post a distribution plan for new funds. Providers must make the distribution plan available for at least six months to all direct care staff employed by their organization.

Providers also are required to make their distribution plan available to DHS, upon request. The Disability Services Division (DSD) will contact providers directly if it selects their distribution plan for review.

Which providers must create distribution plans?

Providers of Disability Waiver Rate System (DWRS) framework services must create distribution plans, with the exception of customized living and 24-hour customized living. However, if a customized living provider receives payment for other framework services, in addition to customized living, they must complete a distribution plan for those other service revenues.

How can providers use additional revenue to comply with this requirement?

Providers are required to use 80 percent of the marginal increase from new revenue associated with DWRS framework changes, effective Jan. 1, 2022, for compensation-related costs for employees directly employed on or after Jan. 1, 2022. These costs may include:

· Wages and salaries

· Employer’s share of FICA taxes, Medicare taxes, state and federal unemployment taxes, workers’ compensation and mileage reimbursement

· Employer’s share of health/dental insurance, life insurance, disability insurance, long-term care insurance, uniform allowances, pensions and contributions to employee retirement accounts

· Other benefits that address the needs of direct support professionals, beyond what they were offered before Jan. 1, 2022, including retention and recruitment bonuses or tuition reimbursement.

Costs cannot count toward this requirement if they support compensation for people who are:

· Employed in an organization’s central office and have an ownership interest or exercises control over the organization

· Paid by the organization under a management contract.

Can providers increase compensation before Jan. 1, 2022, to meet this requirement?

Yes, providers may count increased compensation changes that occurred after July 1, 2021, to meet the 80 percent revenue requirement. However, providers may not seek rate changes before Jan. 1, 2022, to cover these increased costs.

Note that increased compensation must include staff employed by the organization on or after Jan. 1, 2022, and must be maintained through March 31, 2024.

What must be included in a provider’s distribution plan?

Each plan must include these three elements:

Reason for distribution plan

Each distribution plan must describe what the intent of requirement to their direct care staff. Providers may include their own language, but DHS has provided suggested language:

· “This distribution report is intended to communicate the amount and use of revenues received from the DWRS framework wage and inflationary update, in fulfillment of Minn. Stat. 256B.4914, subd. 5. 80 percent of revenue associated with this rate change must be used to support increases to direct support worker compensation for workers that provide Disability Waiver Rate System framework services.”

Identification of additional revenues received from the rate change

Each distribution plan must identify an estimated dollar amount for revenue received from the framework wage and inflationary updates for services delivered between Jan. 1, 2022, and March 31, 2024. Revenue estimates should:

· Include only revenue from DWRS framework services, not market rate, pre-determined rate or other Medical Assistance services

· Not include revenue received from DWRS rate exceptions.

Description of how provider will use additional revenues

Each distribution plan must describe how the provider will use the revenue from the framework wage and inflationary updates.

Previous eList announcements

DSD LEAD AGENCY ARCHIVE | DSD STAKEHOLDER ARCHIVE

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