Disability Waiver Rate System

In 2007, the federal Centers for Medicare & Medicaid Services informed Minnesota that its four disability waivers were out of compliance with federal requirements for uniform rate determination methods and standards. The disability waivers are the Brain Injury (BI), Community Alternative Care (CAC), Community Access for Disability Inclusion (CADI) and Developmental Disabilities (DD) waivers.

In January 2014, DHS established what we now call the Disability Waiver Rate System.

What the system accomplishes

Implementation of the system:

• Transfers the responsibility of setting service rates from counties and tribes to the state
• Restores compliance with federal requirements
• Allows federal renewal of the Minnesota disability waivers

Failure to comply with the federal requirements jeopardizes the services to 37,000 people who rely on disability waiver services.

Goals

Goals of the system are to create statewide rate-setting methodologies that: 

• Are transparent, fair and consistent across the state 
• Comply with federal requirements for administration of waiver programs 
• Establish rates based on a uniform process of structuring component values for service 
• Promote quality and participant choice 
• Recognize a person's assessed need for particular components within each service.

Benefits

How do I benefit from the system? 

• People benefit from increased choice of provider(s) and geographic areas where they receive services. 
• Lead agencies benefit from use of a web-based rate-setting calculator and are no longer required to negotiate rates with waiver providers. 
• Waiver providers benefit from greater predictability of rates when the needs of people who receive services increase or people live in different areas of the state and require the same services.

2024 component values update

Effective Jan. 1, 2024

The 2023 Legislature required DHS to update some cost factors in the Disability Waiver Rate System (DWRS), effective Jan. 1, 2024 or upon federal approval. See Minn. Stat. §256B.4914, subd. 5. The component value changes for services include:

• Community residential services and family residential services: Updates to asleep wage.
• Bureau of Labor Statistics (BLS) and Consumer Price Index (CPI) inflationary adjustments (see note below) to all DWRS framework services (except customized living, 24-hour customized living and adult day services bath), including:
  • Updates to the staff base wage index and supervisor wage, from BLS data.
  • Updates to components subject to CPI changes.
• Increasing the competitive workforce factor to 6.7%.
• Converting the 15-minute unit of respite from a framework rate to a market rate.

For more information about all component value factors in the DWRS effective Jan. 1, 2024, see Disability Waiver Rate System component values effective Jan. 1, 2024 (PDF).

Note: The federal Centers for Medicare & Medicaid Services (CMS) must approve the implementation of BLS and CPI inflationary adjustments. DHS will communicate when CMS makes its decision regarding the changes. Sign up for eList announcements on this CBSM page.

2023 component values update

Effective Jan. 1, 2023

Current law requires DHS to update some cost factors in the Disability Waiver Rate System, effective Jan. 1, 2023 (Minn. Stat. §256B.4914, subd. 5a). The component value changes for services include:

• Community residential services and family residential services: Updates to asleep wage.

There are also increases to the non-medical transportation mileage rate per mile within the 24-hour customized living (24-hour CL) and customized living (CL) services frameworks. The affected transportation sub-services and rates per mile are as follows:

For more information about all component value factors in the Disability Waiver Rate System effective Jan. 1, 2023, see Disability Waiver Rate System component values effective Jan. 1, 2023 (PDF).

2022 regional variance factors update

Effective July 1, 2022

The Legislature required DHS to study regional differences in waiver service provider costs across the state (Minn. Stat. §256B.4914, subd. 10d). It requires DHS to update research once every six years and incorporate a component within the Disability Waiver Rate System frameworks that accounts for regional cost differences.

In 2022, DHS conducted an updated study on cost differences across the state. On July 1, 2022, DHS will begin to use updated regional variance factor (RVF) values in Disability Waiver Rate System (DWRS) service rate calculations. The updated RVF values affect all DWRS framework services. These values will be implemented on a rolling basis, as service agreements renew or change. For more information on the study and updated factors, see the 2022 DWRS regional variance factors webpage.

CMS approves 2022 changes to BLS and CPI component values

Effective Jan. 1, 2022

The federal Centers for Medicare & Medicaid Services (CMS) approved DHS’ implementation of the Bureau of Labor Statistics (BLS) and Consumer Price Index (CPI) inflationary adjustments for affected DWRS framework services with a start date of Jan. 1, 2022, or later.

The BLS and CPI component value changes for services include inflationary adjustments to all DWRS framework services (except customized living, 24-hour customized living and adult day services bath), including:

• Updates to the staff base wage index and supervisor wage, from BLS data
• Updates to components subject to CPI changes.

For more information about all component value factors in the DWRS effective Jan. 1, 2022, see Disability Waiver Rate System component values effective Jan. 1, 2022 (PDF).

2022 component values update

Effective Jan. 1, 2022

The 2019 and first special session of the 2021 Legislature required DHS to update some cost factors in the Disability Waiver Rate System (DWRS), effective Jan. 1, 2022 or upon federal approval (Minn. Stat. §256B.4914, subd. 5). The component value changes for services include:

• Community residential services and family residential services: Updates to asleep wage
• Bureau of Labor Statistics (BLS) and Consumer Price Index (CPI) inflationary adjustments (see note below) to all DWRS framework services (except customized living, 24-hour customized living and adult day services bath), including:
  • Updates to the staff base wage index and supervisor wage, from BLS data
  • Updates to components subject to CPI changes.

For more information about all component value factors in the DWRS effective Jan. 1, 2022, see Disability Waiver Rate System component values effective Jan. 1, 2022 (PDF).
Note: The Centers for Medicare & Medicaid Services (CMS) must approve the implementation of BLS and CPI inflationary adjustments. DHS will communicate when CMS makes its decision regarding the changes.

2021 component values update

Effective Jan. 1, 2021

The 2019 Legislature required DHS to update some cost factors in the Disability Waiver Rate System, effective Jan. 1, 2021 (Minn. Stat. §256B.4914, subd. 5). The component value changes for services include:

• Community residential services and family residential services: Updates to asleep wage
• Adult day services: Updates to hourly wage and client programming and support

For more information about all component value factors in the Disability Waiver Rate System effective Jan. 1, 2021, see Disability Waiver Rate System component values effective Jan. 1, 2021 (PDF).

2020 component values update

Effective Jan. 1, 2020

The 2017 and 2019 Legislatures required DHS to update some cost factors in the Disability Waiver Rate System, effective Jan. 1, 2020 (Minn. Stat. §256B.4914, subd. 5). The component value changes for services include:

• Foster care and supported living services daily: Updates to asleep wage
• Competitive workforce factor of 4.7% applied to the direct care hourly wage in the frameworks.

For more information about all component value factors in the Disability Waiver Rate System effective Jan. 1, 2020, see Disability Waiver Rate System component values effective Jan. 1, 2020 (PDF).

2019 component values update

Effective Jan. 1, 2019

The 2017 Legislature required DHS to update some cost factors in the Disability Waiver Rate System, effective Jan. 1, 2019 (Minn. Stat. §256B.4914, subd. 5). The component value changes for services include:

• Foster care and supported living services daily: Updates to asleep wage, supervisor wage and RN wage
• Day services: Updates to supervisor wage, RN wage and utilization and absence factor
• Unit-based without programming services: Updates to supervisor wage
• Unit-based with programming services, except for positive supports: Updates to supervisor wage
• Positive supports, by professional: Updates to supervisor wage

For more information about all component value factors in the Disability Waiver Rate System effective Jan. 1, 2019, see Disability Waiver Rate System component values effective Jan. 1, 2019 (PDF).

July 2018 DWRS frameworks update

July 1, 2018

Effective July 1, 2018, DHS removed after-model rate adjustments from the Disability Waiver Rate System frameworks. This update was required by the federal Centers for Medicare & Medicaid Services. This update affected all rate frameworks except for customized living and 24-hour customized living. For more information about this change, see the May 31, 2018, eList announcement.

2018 Regional variance factors update

Jan. 1, 2018

The Legislature required DHS to study regional differences in waiver service provider costs across the state (Minn. Stat. §256B.4914, subd. 10f) . It requires DHS to update research once every five years and incorporate a component within the Disability Waiver Rate System frameworks that accounts for regional cost differences.

In 2017, DHS conducted an updated study on cost differences across the state. On Jan. 1, 2018, DHS began to use updated regional variance factors. For more information on the study and updated factors, see the 2018 DWRS regional variance factors webpage.

2018 component values update

Jan. 1, 2018

The 2017 Legislature required DHS to update some cost factors in the Disability Waiver Rate System, effective Jan. 1, 2018 (Minn. Stat. §256B.4914, subd. 5 and 16) . The factors include: wages for housing access coordination services, program plan support values for unit-based services, client programming and support values for unit-based services, and program-related expense values for night supervision, personal support, companion, and respite services. Additionally, budget neutrality adjustment factors for residential and unit-based services are removed from Disability Waiver Rate System calculations beginning Jan. 1, 2018.

For more information on all component value factors in the Disability Waiver Rate System effective Jan. 1, 2018, see Disability Waiver Rate System component values effective Jan. 1, 2018 (PDF).

Future updates to framework components

Oct. 26, 2017

The Legislature requires DHS to update the components used to calculate rates in the Disability Waiver Rate System (Minn. Stat. §256B.4914). For a list of future legislatively required changes to the rate frameworks, see the table below. We will update this table as the Legislature authorizes changes to the Disability Waiver Rate System.

Bureau of Labor Statistics and Consumer Price Index adjustment July 2017

July 1, 2017

The Legislature requires DHS to update the Disability Waiver Rate System according to changes in Bureau of Labor Statistics wage data and the Consumer Price Index once every five years (Minn. Stat. §256B.4914, subd. 5h). DHS applied these increases to rate frameworks calculations effective July 1, 2017. These increases are only applied to framework rates. The impact of these changes varies by service. Updated rates will be calculated and authorized as service agreements renew.

Residential shared staffing update

July 1, 2016

The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10i) to develop and implement a methodology used to determine shared staffing values for residential services. DHS developed this methodology with stakeholders. DHS implemented Rate Management System updates, worksheets and business rules on July 1, 2016. For information on determining residential shared staffing hours, see the Residential shared staffing quick reference guide.

Regional variance factors update

Jan. 1, 2016

The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10b) to study regional differences in waiver service provider costs across the state. It also required DHS to use research findings to incorporate a component within the Disability Waiver Rate System frameworks that accounts for regional cost differences.

In 2014, DHS commissioned a study on cost differences across the state. The study found that staff wages, which are the predominant cost in providing HCBS services, varied significantly across the state. Researchers developed regional variance factors from this data. On Jan. 1, 2016, DHS began to use the regional variance factors in the Rate Management System. For more information on the study findings and resulting factors, see the Regional variance factors study report (PDF).

Day training and habilitation transportation update

Jan. 1, 2016

The Legislature required DHS (Minn. Stat. §256B.4914, subd. 10b) to study transportation data for day services. This study found that the average historical price for day training and habilitation daily transportation was $11.50 per day while the average price calculated by the pricing structure in statute is $14.50 per day. As a result of this research, the Rate Management System applied the legislated transportation values to full-day day training and habilitation frameworks as of Jan. 1, 2016.

Cost-of-living adjustment update July 2015

July 1, 2015

The Legislature required DHS to apply a cost-of-living adjustment to historical and framework rates in the Rate Management System. DHS applied this 1% rate increase outside of rate framework calculations effective July 1, 2015.

Cost-of-living adjustment update July 2014

July 1, 2014

The Legislature required DHS to apply a cost-of-living adjustment to historical and framework rates in the Rate Management System. DHS applied this 5% rate increase outside of rate framework calculations effective July 1, 2014.

Cost-of-living adjustment update April 2014

April 1, 2014

The Legislature required DHS to apply a cost-of-living adjustment to historical and framework rates in the Rate Management System. DHS applied this 1% rate increase outside of rate framework calculations effective April 1, 2014.

Cost reporting

DWRS Frameworks

Rate frameworks are the basis for pricing waiver services within the four disability waivers. All formulas used in the calculation of a rate are visible on the rate framework spreadsheets. The frameworks build upon a consistent structure that:

• Captures the individualized nature of services and client needs
• Contains cells that allow data inputs
• Includes wages, employee and program-related expenses and general and administrative expenses

In 2022, DHS conducted an updated study on cost differences across the state. On July 1, 2022, DHS will begin to use updated regional variance factor (RVF) values in Disability Waiver Rate System (DWRS) service rate calculations. The updated RVF values affect all DWRS framework services. These values will be implemented on a rolling basis, as service agreements renew or change. For more information on the study and updated factors, see the 2022 DWRS regional variance factors webpage.

What is a DWRS rate exception?

An exception is approval from DHS to authorize a rate other than the rate produced by the Rate Management System for people with exceptional needs that cannot be met by the Disability Waiver Rate System.

How do I submit an exception?

A provider must work with a lead agency (county or tribal nation) to identify a person whose needs cannot be met by the Disability Waiver Rate System. The lead agency must submit the exception to DHS using the DWRS Exception Request Application, DHS-5820 (PDF). (See the DWRS exception requests page in the CBSM for more information.)

What tools exist to help?

The following tools for Residential and Day- or Unit-based services are available to help providers and lead agencies to understand the different component values that are used to calculate an RMS rate:

• Lead agency/provider tool for DWRS exceptions (Residential), DHS-5820C (PDF)
• Lead agency/provider tool for DWRS exceptions (day or unit), DHS-5820D (PDF)
• Lead agency/provider tool for DWRS exceptions (customized living), DHS-5820E (PDF)

The tools can help providers and lead agencies document costs that are above or not included in the RMS rate.

What if I still have questions about exceptions?

Please review the DWRS frequently asked questions page to find answers to common questions regarding exceptions. If you still have questions after reading the FAQ page, submit your questions on the DSD contact form.

Disability Waiver Rate System evaluation

The Disability Waiver Rate System (DWRS) is a centralized system that calculates rates for home and community- based services provided under the disability waivers. The system is based on research completed on the average costs to deliver home and community based services in Minnesota.

DHS is dedicated to ongoing research and analysis on DWRS in order to ensure:

• The Disability Waiver Rate System accurately reflects the cost of providing services
• The system is implemented fairly and consistently throughout the state
• People continue to have access to the services they need

Read more about the evaluation process and results on the Disability Waiver Rates System ongoing evaluation webpage.

Frequently asked questions

• Disability Waiver Rate System FAQ

Disability Waiver Rate System background

• Disability waiver rate-setting frameworks
• Personal support policy clarification
• Disability waiver rate system component values effective Jan. 1, 2014 (PDF)
• Disability waiver rate system component values effective Jan. 1, 2018 (PDF)
• Disability waiver rate system component values effective Jan. 1, 2019 (PDF)
• Disability waiver rate system component values effective Jan. 1, 2020 (PDF) See also Provider requirements for competitive workforce factor (CWF) distribution reports.

Rate Management System information

• CBSM - Rate Management System
• Rate Management System (RMS) User Manual
• RMS User Manual quick reference guides

Rate exceptions information

• Lead agency/provider tool for DWRS exceptions (Residential), DHS-5820C (PDF)
• Lead agency/provider tool for DWRS exceptions (day or unit), DHS-5820D (PDF)
• Lead agency/provider tool for DWRS exceptions (customized living), DHS-5820E (PDF)

Evaluation reports

• Disability Waiver Rate System Impact Study Semi-Annual Report (PDF) (December 2018)
• Disability Waiver Rate System Impact Study Semi-Annual Report (PDF) (September 2018)
• Disability Waiver Rate System Impact Study Semi-Annual Report (PDF) (October 2017)
• Disability Waiver Rate System Absence Factor in Day Services Study (PDF) (December 2017)
• 2017 DWRS legislative report (PDF) (January 2017)
• Regional Variance Factors study report (PDF)