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S.F. No. 727 - Disability Waiver Rate System Modification (Unofficial Committee Engrossment)
Author: Senator Paul J. Utke
Prepared By: Liam Monahan, Senate Analyst (651/296-1791)
Date: March 13, 2017


SF 727 modifies the disability waiver rate system by adding certain costs to the rate calculations, adjusting the base wage index, increasing the frequency of automatic inflation adjustments, and specifying certain situations under which the commissioner must authorize rate exceptions.

Sections 1 and 2 (Rate stabilization adjustment - 256B.4913, subdivision 4a, and Disability waiver rate system phase-in - 256B.4913, subdivision 46) require the commissioner to phase in rate reductions for day services and supported employment services or comparable services provided under the disability waivers.

Section 3 (Definitions – 256B.4914, subdivision 2) provides a definition of “licensing fee.” In section 8, the cost associated with licensing fees is added to the rate for services calculated by the disability waiver rate system.

Section 4 (Data collection for rate determination – 256B.4914, subdivision 4) makes conforming changes to cross-references.

Section 5 (Base wage index and standard component values – 256B.1914, subdivision 5) modifies the base wage index and component values.

Paragraph (a) modifies the base wage index by modifying the data to which the commissioner will refer when determining the base wage for staff providing various services and by creating three new base wage calculations for new employment-related services. 

Paragraph (d) increases the absence and utilization factor ratio for day services from 3.9 to 9.4 and adds a new recipient fixed cost factor to the rate calculation for day services.

Paragraphs (h) and (i) increases the frequency of the automatic inflation adjustments from every 5 years beginning July 1, 2017, to every two years.

Section 6 (Payments for residential support services – 256B.4914, subdivision 6) increases payments for transportation provided by residential service providers and clarifies how these payments will factor into individual payment rates.

Section 7 (Payments for day programs – 256B.4914, subdivision 7) makes conforming changes, and replaces references to “day training and habilitation services” with references to “day services.”

Sections 8 and 9 (Payments for unit-based services with programming – 256B.4914, subdivision 8 and Payments for unit-based services without programming – 256B.4914, subdivision 9) make conforming changes and specify that various activities mandated by the home and community-based licensing standards are “billable services.” The mandated activities mentioned by cross-reference include:

Section 245D.04 – Notice to service recipients concerning their rights, person-centered planning requirements, patient protection requirements, and grievance policies and procedures.

Section 245D.05 – Provision of health services.

Section 245D.06 – Implementation of recipient protection standards including incident response and reporting, maintaining environmental and safety standards, training, facility maintenance, safe storage of supplies and medications, and positive support planning.

Section 245D.061 – Monitoring, reporting, and review of emergency use of manual restraints.

Section 245D.07 – Service planning and delivery of basic services, including developing coordinated service and support plans and addendums, revision and review of plans and addendums, and written reports upon request.

Section 245D.071 – Service planning and delivery of intensive services, including developing abuse prevention plans, conducting 45-day assessments, holding 45-day planning meetings, developing service plans and addendums, and evaluating plans and addendums.

 Section 245D.081 – Service coordination, program management, evaluation, and oversight.

 Minnesota Rules, part 9544.0040 – Functional behavior assessments.

 Minnesota Rules, part 9544.0050 – Documentation of restrictive procedures involving children.

 Minnesota Rules, part 9544.0110 – Reporting use of restrictive interventions and incidents.

 Minnesota Rules, part 9544.0120 – Quality assurance and program improvement.

Section 10 [256B.4914, subdivision 9a] requires the commissioner to increase individual payment rates to include the proportional share of the provider’s licensing fee attributable to the services provided to each individual. 

Section 11 (Updating payment values and additional information – 256B.4914, subdivision 10) makes conforming changes.

Section 12 (Exception – 256B.4914, subdivision 14) makes changes to the language governing the development and implementation of a disability waiver rate system exception process.

Paragraphs (l) and (m) strikes a past date by which the commissioner must provide research concerning the disability waiver rate system’s inability to set rates that are adequate to meet the needs of certain high-need individuals.

Paragraph (o) requires the commissioner to authorize a rate exception for any individual whose individual service rate will decrease at the end of the banding period by more than one percent.  The required exception will reduce rates for these individuals by only one percent per year until their rate is equal to the rate set by the disability waiver rate system.

Paragraph (p) requires lead agencies to compare every individual service rate as determined under the disability waiver system to the historical rate that applied on December 31, 2013, for that service.  If the difference in rates is more than ten percent, a lead agency must conduct an assessment of the individual’s needs and access whether the disability waiver rate system is generating a rate that will limit the individual’s access to services, and if so, requires the lead agency to recommend and the commissioner to approve a rate exception to guarantee access to services.

Section 13 [Prompt issuance of service agreement authorizations – 256B.4914, subdivision 17, paragraph (a)] requires lead agencies to promptly transmit information required by the commissioner in order to issue service agreements.

Paragraph (b) specifies that service agreements be sufficiently complete and retroactive.

Paragraph (c) specifies that service agreements include both the day service begins and the day services end.

Paragraph (d) requires lead agencies to implement the disability waiver rate-setting system in a manner that does not reduce funding for individuals or reduce services for individuals.

Paragraph (e) permits a license holder to request from the commissioner a corrective rate adjustment if a lead agency violates paragraph (c) or (d).

Paragraph (f) permits the commissioner to forbid lead agencies from processing service agreements or to require a corrective action plan if a lead agency violates this subdivision.

Section 14 [Disability Waiver Reimbursement Rate Adjustments – 256B.4915] modifies and codifies language from Minnesota Laws 2014, Chapter 312, Article 27, section 76.

Subdivision 1 (Historical rates) specifies that all rate increases since January 1, 2014, (including any future rate increases during the banding period) apply to historical rates.

Subdivisions 2 to 5 (Framework rates) specifies that all rate increases effective between January 1,  2014, and June 30, 2017, for services available through the disability waivers apply to the framework rates.

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