Cost categories
Page updated: 2/12/24
The cost report has defined cost categories, which are groups of similar activities that share similar characteristics.
There are two main types of cost categories: direct care and administration. Direct care cost categories refer to the costs to provide DWRS services, such as supplies and staffing. Administration cost categories refer to the business costs to oversee programs, maintain compliance, plan work, train employees, etc. The nine main cost categories are listed below:
Direct care cost categories
Note: The direct care cost categories have subcategories to report specific allocations for direct care staff. We explain these subcategories further down the page in the direct care worker cost subcategories section.
Administration cost categories
The direct care and administration cost categories align with DWRS framework definitions. However, these categories might not align directly with a provider organization’s cost allocations. The cost report preparer might have to do additional work to align the provider’s cost categories to these definitions.
Example: A provider organization considers its office supplies a program cost because it assigns the supplies to different services based on the usage by that service. Even though the organization considers office supplies a program cost, DHS considers this an administration cost because it is not connected to the direct care the organization provides.
Direct care cost categories
The direct care cost categories are costs that the provider can reasonably attribute to the direct provision of services. These cost categories include:
Example: Ana is an employee at Provider Agency XYZ. She supervises workers who provide day support services as well as workers who provide other disability waiver services. The organization allocates a portion of Ana’s time to the DWRS day services cost category and a portion of her time to the other disability waiver services category.
The cost report includes some services that are either no longer available or no longer a DWRS framework service. There are two reasons for this:
This could result in reporting costs for up to 41 months after a service is no longer considered a DWRS cost.
Example: If a service was discontinued in July 2022, a provider may bill for that service for up to a year (i.e., through July 2023), which could be considered a 2019 DWRS cost. An organization could be able to report on July 2023 DWRS costs through December 2025, depending on the organization’s cost-reporting period.
For more information about DWRS services and corresponding cost categories, refer to DHS – List of all DWRS services.
Direct care worker cost subcategories
The cost report sections for direct care and supervisor wages and benefits cost allocation – employees and direct care and supervisor payment allocations – contractors include additional, more specific cost subcategories that break down DWRS costs further. These subcategories are based on the different wage assumptions in the DWRS rate frameworks.
The subcategories below allocate direct care worker costs under the direct care cost categories.
Cost category | Direct care worker cost subcategories |
DWRS customized living | |
DWRS day services | |
DWRS residential services | |
DWRS unit-based services with programming | |
DWRS unit-based services without programming |
Example: The DWRS residential services category includes options for residential direct care staff (onsite), residential asleep-overnight staff (onsite), residential direct care staff (remote), RN staff for residential services, LPN staff for residential services, supervisory staff for residential services and program plan support for residential services because these are all different direct care roles within the framework. This allocation allows the provider to connect reported costs to the appropriate framework assumption and allows DHS to understand the costs to provide DWRS services.
The cost report includes an additional category for program support in each of the direct care cost categories. This accounts for direct care staff time that may not be spent working directly with people but is still related to providing services. This could include:
The cost report preparer can also report the travel time between people receiving services as program support when it is considered outside of the service delivery. While this category likely will not be a large portion of most staff members’ time, it is important to understand how much time staff members spend outside of providing direct care.
Administration cost categories
The administration cost categories are costs that the provider can reasonably attribute to the administration of the organization’s business. This broad category includes two specific categories:
1. DWRS administration costs category: Administration costs associated with DWRS framework services.
2. All other administration costs category: Administration costs for all other services provided by the organization that are not associated with the delivery of DWRS services, which could include:
The all other administration costs category allows the cost report preparer to include all administration costs that may be partially associated with DWRS costs.
Example: Provider Agency ABC has a president who oversees the entire organization, but only a portion of the president’s time is associated with DWRS services administration. The organization can allocate a part of the president’s time to the DWRS service administration cost category and the rest to the all other administration costs category.
Next step
Next, review allocation methodologies.
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