Section 1 (256B.4914, subdivision 5) amends the disability waiver rate system (DWRS), which is the methodology used to set rates for services offered under four home and community-based waivers for people with disabilities, by modifying (1) the base wage index and (2) the automatic inflation adjustments built into the rate methodology.

Paragraph (a) specifies that beginning January 1, 2022, the base wage index for DWRS must be based on data drawn only from the metropolitan area, and not from state-wide data.

Paragraphs (h) and (i) make three identical changes to the automatic inflation adjustments built into DWRS.  The first change (see lines 5.28 and 6.12) moves forward by six months the next scheduled inflation adjustment from July 1, 2022, (the first day of fiscal year 2023) to January 1, 2022, (the midpoint of fiscal year 2022).  The second change (see lines 6.1 and 6.13) increases the frequency of automatic inflation adjustments after January 1, 2022, from every five years to every two years. The third change (see 6.3 and 6.18) clarifies the methodologies for calculating the automatic inflation adjustments.

Sections 2 - 5 (256B.4914, subdivision 6 – 9) remove, beginning on January 1, 2022, a regional cost adjustment factor from the rate calculations.

Section 6 [256B.4915] provides for a number of rate add-ons to rates calculated under DWRS, including a quality add-on.  The quality add-on is described in Minnesota Statutes, section 256B.439, subdivision 7, and provides, in part, that all home and community-based services (HCBS) providers receive a minimal quality add-on and that the quality add-on becomes a part of the provider’s ongoing payment rate.

Subdivision 1 codifies application of existing rate increases (COLAs) enacted in 2013 and 2014 for the purposes of individuals receiving services at rates that are subject to “banding.”  This subdivision also clarifies that the home and community-based services quality add-on must be applied to banded rates.  (NOTE: Banding is set to expire December 31, 2020, subject to federal approval; otherwise banding will expire December 31, 2019.)

Subdivision 2 requires the commissioner, beginning on January 1, 2022, to continue to apply the HCBS quality add-on to the rates calculated under DWRS.

Subdivision 3 requires the commissioner, beginning on January 1, 2022, to allocate additional funds from the medical assistance fund for the purposes of the HCBS quality add-on.  The value of the additional allocation must be equal to one percent of the total value of payments made under DWRS.

Subdivision 4 requires the commissioner, beginning on January 1, 2022, to continue to apply existing rate increases (COLAs) enacted in 2013 and 2014 to the rates calculated under DWRS for customized living services.  (NOTE: Elderly waiver customized living services are NOT calculated under DWRS.)

Section 7 [Direction to the Commissioner] requires the commissioner, until December 31, 2021, to continue to apply to rates calculated under DWRS the existing HCBS quality add-on as well as the rate increases (COLAs) enacted in 2013 and 2014 .