DWRS cost reporting frequently asked questions

Disability Waiver Rate System (DWRS) is an initiative that determines individualized payment rates for certain Brain Injury (BI), Community Alternative Care (CAC), Community Access for Disability Inclusion (CADI) and Developmental Disabilities (DD) waiver services. DWRS divides disability waiver services into three categories:

• Framework
• Market rate
• Pre-determined rate services.

DWRS cost reporting is a requirement for providers to report the actual costs of providing services by the established cost centers (e.g., wages, program administration or facilities).

DHS will use the data gathered from DWRS cost reporting to make evidence-based recommendations to the Legislature about the payment rates for disability waiver services. We will collect this data on an ongoing basis to inform policy makers of the cost drivers and allow DWRS to set rates that:

• Appropriately fund services
• Encourage provider viability
• Help ensure service access for people who use home and community-based services (HCBS) waivers.

For more information, see the DWRS cost reporting webpage. 

The Minnesota Legislature directed DHS to develop and implement a provider cost review for agencies that provide at least one service with rates established by DWRS (Minnesota Statutes 2019, section 256B.4914, subdivision 10a). The purpose is to use the data gathered from the DWRS cost reporting to make evidence-based recommendations to the Legislature about the payment rates for disability waiver services. We will collect this data on an ongoing basis, which will inform policymakers of the cost-drivers and will allow DWRS to set rates that appropriately fund services, encourage provider viability and help ensure service access for people who receive services under the home and community-based services waivers.

Your organization’s final cost report must be submitted via the online DWRS Cost Reporting platform. This reporting platform is intended to be easier and more user-friendly than spreadsheet submissions, while also streamlining the ability to use your information quickly to report to decision-makers.

DHS screens all submitted cost reports for invalid, missing or suspicious data. If your report has a potential issue, DHS will reach out to your authorized agent directly to let you know about the specific issue(s) and ask that you either attest to the data or make the necessary corrections and resubmit your report. This process is separate from auditing and is meant to help ensure the integrity of the data collected. 

State statutes require DHS to audit a random selection of cost reports each year. These will be audits to verify your reported information and are not intended to be audits of your entire business. If selected, DHS will ask your organization to provide your general ledger and any supporting financial documents you used to complete your cost report. If your organization fails to provide the auditors with the requested information, DHS will pause payments to your business until you provide the information.

The cost data you submit will be used to help DHS understand the costs of providing DWRS services. Through analysis and evaluation of the submitted data, DHS can identify the real costs of providing services for all providers. We can also track the costs year over year to see how they may change, and submit findings to the Legislature accordingly. Every four years, beginning in 2022, DHS submits a report on collected data to the Legislature.

Your organization’s data is considered to be non-public according to Minnesota Statutes 13.02 and will only be used by DHS for its cost reporting project and aggregated and anonymized reporting.

Thank you for preparing ahead of time for your reporting year. We suggest you review the introductory cost reporting materials on the resources tab of the Cost reporting website. If you would like to track additional cost information, there are tools that may help you in the Resources tab, such as the Disability Services cost reporting time-study worksheet, DHS-7190A-ENG (PDF).

Also in the Resources tab are the tools you can use to prepare for reporting: the DWRS Cost Reporting Manual and Workbook. These two resources will walk you through the entire cost report.

For family residential providers, the license holder is also considered an employee of the organization since they are providing the direct care to the person. Even if it is only you doing the work, you would still need to report your working hours and income on this form.

For more information about reporting as a family provider, see the Guide for family providers in the DWRS Cost Reporting Tool Instruction Manual.

Because we update the FAQ regularly and to ensure you receive the most current information, the manual is only available as an online resource. Each page may be printed, but we recommend using the online version to ensure you’re using the most up-to-date information.

DHS does not provide guidance on the use of a contractor to complete your cost report. This decision is up to individual providers. DHS cannot make recommendations on specific organizations to help with the reporting process.

We will send all communication about cost reporting to the email address provided for your company’s authorized agent under 245D licensure. DHS might reach out to your organization via MN-ITS messages to notify you of reporting requirements or noncompliance. 

The authorized agent will receive multiple emails about reporting. Check your junk/spam email folder to ensure you did not miss these notifications. If you did not receive an email and do not know if it is your year to report, contact the cost reporting team at dhs.costreport@state.mn.us.

If you are unsure if it is your year to report or don’t have your sign-in information, send an email to dhs.costreport@state.mn.us to ask for what you need. In your request, please include your organization’s:

• FEIN(s)
• NPI(s)
• Business name
• Authorized agent name and email address

If you are not your organization’s authorized agent, please check with them before emailing.

You will not have to log in if it is not your year to report. Currently the system is set up so that only the providers that are required to report may log in to the system. When it is your reporting year, we will give you access.

There are two types of sign-ins for this system: authorized agents and provider users. The authorized agent is the first to sign into the online system. This person creates a password and can then “create new contacts” (known as provider users) if someone else will be completing the report on their behalf. The authorized agent or provider user completes the report. Then the authorized agent attests to and submits the report when it is finished. For more information, see the DWRS Cost Reporting Manual section Authorized agents and provider users.

You may access, enter and edit information in your cost report until the cost report is submitted by the authorized agent. Once the report is submitted by the authorized agent, the content is locked and assumed to be the official submission of the organization. Please make sure you have reviewed all information before submitting your cost report.

Once the cost report is submitted by the authorized agent, the entire report is locked to all users. It can still be viewed in the system, but not edited. Contact the DHS Cost Reporting Team at dhs.costreport@state.mn.us if the report has been submitted in error and needs to be revised for any reason.

Unfortunately there is no easy way to copy and paste your own worksheet into our cost reporting tool. Because of the complex nature of the data, the system cannot adequately upload data into the system.

Only your organization’s authorized agent (AA) will be able to attest to the contents of the report and submit it once it’s been finalized. Assigned cost report preparers who are not the AA will not see the attestation or submission options at the end of the report. If you are signed in and do not see the option to finalize and submit your report, ensure you are the AA for your organization and are signed in with your AA credentials.

The reporting year must include 12 full months of business costs. The last day of the 12-month period cannot be more than 18 months from the submission day. For most organizations, this period would be their most recently completed fiscal year, whether that be from January through December of the previous calendar year or another definition of a fiscal year.

For organizations reporting in 2024, most will report on calendar year 2023.

This is for DWRS waiver services only. That includes some of the services on the four disability waivers (i.e. CAC, CADI, DD and BI), but not all. This does not apply to any other programs, including EW.

UMPIs and NPIs are not selected for reporting, only tax IDs (FEINs). You should report for all UMPIs/NPIs under the FEIN for your organization.

If you do not have an FEIN and have more than one NPI, please email the cost reporting team for further direction.

Always report all the costs associated with the organization’s FEIN, despite the email from DHS listing only one organization site. Due to the process of identifying providers, there are some instances where only one site is listed as the business name.

The name can be updated by the authorized agent to match your organization’s formal name.

If you need to change your authorized agent, email our team at dhs.costreport@state.mn.us and we will make the update for you. Please note that you should also update your authorized agent contact information with DHS Provider Licensing.

When completing the cost report, the cost report preparer should include the revenues and costs associated with providing DWRS framework services. Do not report income received through non-service revenues, such as Supplemental Security Income (SSI), Housing Support (formerly GRH), non-DWRS waiver services income or costs not allowed under Medical Assistance. 

Revenues should be reported as totals for the year per service, not daily rates or individual rates for people served. See the Revenues section of the manual for more information.

Do not report any room and board costs on the cost report, including costs for residential services facilities or homes. This includes, but is not limited to:

• Property taxes
• Mortgage payments
• Utility payments
• Lawn/snow removal services
• Food costs
• Facility maintenance.

Home and community-based services (HCBS) waivers cannot pay for room and board, so DWRS payments do not cover these costs. Other programs (e.g., Housing Support) cover these costs, so provider organizations should not count them as DWRS costs.

The only acceptable facility costs that may be reported here are non-residential facilities such as administrative office, day programs or other types of offices.

For tax purposes, an employer should always be tracking what they are paying an individual. This includes any tax withholding or benefits costs provided. If you do not have records of payments, we suggest using a resource such as bank statements, credit card records or other accounting software.

For providers without employees or a sole proprietorship, we suggest completing the rest of the cost report and reporting the remaining amount of revenues as your own income, with the number of hours included to understand how much income was made.

Note: If your organization did not withhold payroll taxes for an employee (e.g., you issued 1099s for contractors or are the business owner and/or sole employee), please indicate this in the Notes section located at the top right of the page on the Direct care & supervisor wages and/or Administrative & program support wages pages.

Whether you provided benefits does not dictate if a person is considered an employee or contractor.

How you report an employee should be determined by how you employ them and report their income to the government. An employee would have a W-2, while a contractor is more likely to have a 1099 or other type of tax documentation.

For someone who may work both as a direct care worker and as an administrative worker, consider which work they do most of the time or what their role is in the workplace. 

The cost report does allow a person’s time to be allocated to administrative and direct care categories in both reporting sections, so the cost report preparer will have the ability to allocate their time to the tasks they perform. 

At no time should one worker’s duties be split between two reporting sections. Whole positions should be reported only once on one section. 

Example: Gabi is the clinical director of Organization Z and a registered nurse (RN). Gabi spends 20% of her time providing RN services directly to people who receive DWRS day services and spends 80% of her time overseeing the organization’s administration of its clinical practice. The organization allocates 80% of Gabi’s salaries, wages, benefits and payroll tax costs to the DWRS service administration and 20% percent of the cost to the DWRS day services direct care.

An employee is considered full time if they work 30 hours or more a week on average during the reporting period. See the direct care worker’s questionnaire section of the manual.

In-program or in-service means that what is being provided is part of the service being paid for. For example, if a direct care worker is taking public transportation with the person being served on their way to community activities as part of their service, that would be considered in-program or in-service. These costs are what would be considered direct care costs for this reporting and would be reported on the Client and programming supports section.

Example: Cody, a direct care worker, is taking public transportation with a person receiving services on their way to community activities as part of their service. In this situation, the cost of public transportation is considered in-program or in-service.

Out-of-program or out-of-service are those activities that may be related to the provision of services but aren’t part of the service. For example, the pre-planning of activities or tasks that will be worked on during a service is generally not considered a billable service, because the person served isn’t present, but it is still a task that needs to be completed to deliver the service. Generally, this cost report would assume these are part of the administrative or program support costs, instead of direct care costs, and would be reported on the Transportation section.

Example: Johan, a direct care worker, plans for activities and tasks he will work on with the person during a service. This pre-planning is generally not considered a billable service because the person receiving services is not present. However, Johan still must complete this task to deliver the service.

We suggest tracking the miles driven in a week by each owned/leased vehicle this year, and then again in a month. Use the information gathered to estimate the total miles driven by each vehicle per year. To estimate, you can use the following method:

1. Add week 1 miles and week 2 miles 
2. Multiply by 52 
3. Divide the total by 2 to arrive at annual miles driven

Only use this method if you have not had dramatic changes in the miles or routes driven of the vehicles you are estimating.

Beginning in 2020 all provider organizations must catalogue the annual miles driven by each of their vehicles each year in preparation for future reporting.

The cost reporting program only includes day facility costs. This section should only be used for facilities that are for the delivery of day services, such as DT&H or adult day. Any other service does not have a built-in component for a facility and therefore should not be included.

Due to federal waiver regulations, we strongly suggest only reporting day facility and administrative facility costs, as waivers only cover the costs of services delivered through residential settings and do not pay for room and board. For more information on what costs should or should not be included, see the Day program facility costs section of the manual. 

All sections that require allocating wages of direct care staff include additional, more specific cost categories that break down DWRS costs further. These categories are based on the different wage assumptions in the DWRS rate frameworks. 

Example: The DWRS residential services category includes options for awake direct care worker, asleep direct care worker, supervisor, nursing, etc., 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. 

Because of the specific nature of these categories, the cost report preparer might need to take additional considerations to allocate wage and benefit costs. DHS suggests basing the allocation of direct care wages and benefits by the portion of the work performed in the different roles, as defined in the direct care worker cost categories. Please see the Cost Categories and Allocation Methodology sections of the manual for more information on allocations.

Program plan support can be thought about as non-direct time for direct care staff. The cost report includes an additional cost category for program support in each of the direct care cost categories. This accounts for direct care staff time that might not be spent working directly with people but is still related to providing services. This could include:

• Documentation
• Service preparation activities
• Communication between shift staff.

The provider may also report the travel time between people receiving services as program support when it is considered outside of the service. 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.