Minnesota Department of Human Services LogoIn recent years, Minnesota’s long-term care systems have gone through significant changes to improve quality, streamline efforts, and reduce costs. One example is the Disability Waiver Rate System (DWRS), which was developed to create a consistent rate structure to pay providers serving people with disabilities.

However, some recipients have exceptional needs that require a level of service beyond what is covered under the DWRS. These recipients require a DHS-approved rate exception. Most of the waiver recipients are “banded” to their historic rates until 2019 and are ineligible to receive rate exceptions. The challenge is in projecting the fiscal impact of the end to the current banding protections in 2019.

Disability Waiver Rate System (DWRS) Exceptions Research

The Minnesota Department of Human Services (DHS) and The Improve Group recently worked together to study the DWRS exceptions program. The primary goal of the study was to project the fiscal impact of future exceptions for the Home and Community Based Services (HCBS) disability waiver programs when banding protections end in 2019. The four disability waiver programs included in the study are Brain Injury (BI), Community Alternative Care (CAC), Community Alternatives for Disabled Individuals (CADI), and Developmental Disabilities (DD) waivers. The study also explored areas for improvement within the current exceptions request process and rate setting frameworks.

For this study, we developed a methodology to project the cost of rate exceptions and determine the fiscal impact of future exceptions when banding protections end in 2019. In addition to fiscal estimates, we also used trends in cost drivers, population characteristics, and services to identify areas within the rate frameworks that may need to be reformed in order to reduce the need for exceptions in the future.

Working with DHS, we selected nine lead agencies to participate in the study. We generated a random sample of disability waiver recipients served by those lead agencies who may need rate exceptions to meet their needs when banding protection ends. If banding protection were to end today, DHS wanted to know the following:

  • What will be the total cost of exceptions?
  • What number of HCBS waiver recipients will likely need and be approved for an exception when banding protections are not available?
  • What are the characteristics of recipients likely to require a rate exception?

Overall Findings

The DWRS Exceptions Research Study generated additional data to project the fiscal impact of rate exceptions to the HCBS disability waiver programs when banding protections are lifted in 2019. The study was designed to help DHS better understand the primary cost drivers for exception requests, the current challenges providers and lead agencies are having with the exceptions applications process, and highlight any promising best practices. Included below are highlights of our findings:

Total Fiscal Impact and Exceptions Demand: Based on the fiscal year 2020 forecast, exceptions are estimated to cost approximately $58.8 million per year (State and Federal spending combined) when banding protections are no longer applicable. This is in line with what DHS had previously projected. And while data suggest that there is not a difference in the demand for exceptions by waiver type, service type was found to be a factor in whether an exception is needed. The study also provided DHS with more information about the relationship between recipient needs and the need for a rate exception.

Exceptions Characteristics: Common individual characteristics cited as the reason for exception requests included behavioral and complex needs. Analysis of screening and assessment data did not identify clear trends in relationship between level of need and likelihood of receiving an exception.

Cost Drivers: The cost drivers that prompt exceptions are linked to the need for trained, qualified staff who can provide the services for waiver recipients with unique needs. The cost of training is particularly burdensome for foster care and other providers who experience high staff turnover.

Our research informed DHS' Disability Waivers Rate System Legislative report.