SF3657

Purpose

• The bill changes how disability waiver services are paid in Minnesota. It creates a new framework called “unit-based services with programming” and updates how payment rates are calculated and limited. The goal is to set structured, rate-based payments for specific support services and add caps to daily service time.

Main Provisions

• Define unit-based services with programming

  • Includes: employment exploration services, employment development services, employment support services, individualized home supports with family training, individualized home supports with training and positive support services provided outside of any day program or residential plan.
  • These services are billed in units of 15 minutes.

• Establish component values (percentages) for payments

  • Competitive workforce factor: 6.7%
  • Supervisory span of control ratio: 11%
  • Employee vacation, sick, and training allowance ratio: 8.71%
  • Employer-related cost ratio: 23.6%
  • Program plan support ratio: 15.5%
  • Client programming and support ratio: 4.7% (updated as specified later)
  • General administrative support ratio: 13.25%
  • Program-related expense ratio: 6.1%
  • Absence and utilization factor ratio: 3.9%

• Payment calculation method

  • Steps include: determine units needed, determine hourly wage rates, adjust for the competitive workforce factor, add a customization rate for deaf/hard-of-hearing language accessibility, apply direct staffing hours and supervisory costs, apply the various ratios (employee benefits, program plans, administrative costs, etc.), and sum to a subtotal rate.
  • A regional cost adjustment will be applied to reflect differences in travel/operating costs.

• Customization for accessibility

  • If a recipient requires customization for deaf and hard-of-hearing language accessibility, add the customization rate specified in the bill.

• Rates for shared or bundled services

  • After calculating the total payment amount, divide the total by the number of recipients in each service category:
  • Employment exploration services: not more than 5 recipients
  • Employment support services: not more than 6 recipients
  • Individualized home supports with training and with family training: not more than 3 recipients
  • Night supervision: not more than 2 recipients

• Daily and annual limits

  • Beginning January 1, 2026 (or 2027, or when federal approval is obtained, whichever is later), providers may not bill more than:
  • Three consecutive hours per day for individualized home supports with training
  • Up to six total hours per day for IHSS with training
  • Up to six total hours per day for IHSS with family training
  • A daily limit does not prevent using other disability waiver services on the same day by the same provider (for IHSS with training or with family training) if the individual meets residential support criteria.

• Effective date and regional considerations

  • The rate changes take effect on January 1, 2026, 2027, or upon federal approval, whichever is later.
  • The per-category limits and rate adjustments include a factor to adjust for regional cost differences.

Significant Changes to Existing Law

• Replaces or supplements existing waiver payment methods with a unit-based system for a defined set of services.
• Introduces a formal set of component value percentages that drive rate calculations.
• Establishes a defined unit (15 minutes) and a detailed, multi-step calculation process for determining payments.
• Adds specific daily and service-year limits on time billed for certain IHSS services.
• Adds requirements for regional cost adjustments to payments.
• Integrates accessibility customization payments for deaf/hard-of-hearing needs.
• Clarifies that limits on IHSS-related daily hours do not cap other disability waiver services on the same day for applicable individuals.

Practical Implications

• Providers will be paid using a standardized formula that accounts for staffing, administration, and specific cost factors.
• Services are more tightly time-bounded, with explicit daily caps for certain supports.
• The changes aim to align payments with regional costs and specific service components, potentially influencing which services are offered and how they’re staffed.

Relevant Terms - unit-based services with programming - disability waiver - 15 minutes (unit) - employment exploration services - employment development services - employment support services - individualized home supports with family training - individualized home supports with training - positive support services - competitive workforce factor - supervisory span of control ratio - employee vacation sick and training allowance ratio - employer-related cost ratio - program plan support ratio - client programming and support ratio - general administrative support ratio - program-related expense ratio - absence and utilization factor ratio - customization rate - deaf and hard-of-hearing language accessibility - regional cost differences adjustment - daily limits (hours per day) - service recipients per category limits - residential support criteria - service authorization year