Generally, people with banded rates are not eligible for exceptions. Banding is intended to protect providers’ rates from drastic changes and to ensure continued access to services for people who receive them.
However, lead agencies may complete a service-intensity change for people with a banded rate who experience a change in service need. If the change in the person’s need is so significant that the service intensity still does not meet the person’s need, an exception may be appropriate. For more information, see the RMS training modules page.
An exception may be appropriate if both:
Generally, a weighted average is meant to cover both the higher and lower needs of people served at the program (i.e., some rates will be higher than the need, some will be lower). However, if a provider historically has served people with lower needs, that may result in a lower historic rate. If a person enters service with such high needs that the costs cannot be absorbed by the gain and loss of the weighted average, an exception may be appropriate.
Each framework (except customized living) includes a built-in “absence and utilization” or “utilization” percentage (3.9 percent) to account for an average amount of time a person is absent from services but the provider still incurs operating expenses. It may be appropriate to request an exception for leave days if a person with a banded rate:
The lead agency must document the change in need and any extenuating details related to the person’s needs in the person’s support plan (in the About Plan tab, general notes section).
An example of a change in “leave days” would be decompensations that result in a number of hospitalizations, mental health situations, extended family visits, etc.
The absence and utilization percentage contained in each framework (except customized living) is 3.9 percent. For residential services, this equates to 14.24 days. (365 x 3.90% = 14.24 days).
Leave days for banded rates are calculated for an entire span by the following calculation: Banded rate x 365 [or number of authorized days in previous spans if different]. Divide the sum by the planned number of authorized days.
For example: In addition to the 14 days in the calculated rate, the provider has requested 40 leave days because of the frequent hospital stays of the person served.
[$100 * 365 = $36,500
$36,500/325 = $125.31/day]
In this example, the exception rate would be $125.31 x 325 days authorized on the service agreement. 365-40 = 325 days.
If a “leave day” exception is requested for people at the framework rate OR people whose residential rates are not banded, the Absence and Utilization percentage will be adjusted based on a calculation.
Using the same example: In addition to the 14 days in the calculated rate, the provider has requested 40 leave days because of the frequent hospital stays of the person served.
54 / 365 = 14.79 percent Absence and Utilization component value needed in rate tool to account for additional leave days. A new rate will be calculated based on the increased component value. Once the exception is approved, lead agencies will authorize the new rate multiplied by the planned number of authorized days (365 – 40 = 325 days in this example). These are in addition to the 14 leave days in the framework when authorizing 365 days.
DWRS is a prospective system and not a cost-reimbursement system. Lead agencies should not add more days to the authorization once this calculation has been done because it would affect the overall result.
It depends. The starting date for the rate exception will be the later of the date of the recipient’s change in support OR the date of the request to the lead agency for an exception.
No. When a provider purchases another provider, people who had individual rates in 2013 retain the protection of banding. Those people should be banded manually to their previous rate with the previous NPI. Use the drop down reason of “Historic Rate not available” and add a narrative to explain why you are manually banding.
If there has been no change in the person’s need, manually band to the person’s current rate. Use the drop down reason of “Historic Rate not available” and add a narrative to explain why you are manually banding. If there has been a change in need, do a service intensity change and manually band to the person’s historic rate.
A provider can request an exception through the person’s lead agency. But, only lead agencies can submit the rate exception to DHS. State law (Minn. Stat. § 256B.4914) says: “individual disability waiver recipients, an interested party, or the license holder that would receive the rate exception increase may request that a lead agency submit an exception request.”
No. The lead agency must submit all exception requests on the DWRS exception request application, DHS-5820 (plus attach any supporting documentation that is not accounted for in the CSSP). A provider must submit cost documentation to the lead agency that it can submit as an attachment. The provider should use one of the following for that documentation:
This process ensures that the lead agency is aware of and in agreement with the person’s extraordinary needs and the cost drivers behind a rate exception request.
If DHS receives an exception request directly from a provider, DHS will notify the provider (and copy the lead agency), that all exception requests must be routed through the lead agency for submission to DHS. DHS will not review the request unless submitted by the lead agency.
State law requires lead agencies to submit exceptions. A provider and lead agency must work together to submit the Disability waiver rates system exception request application, DHS-5820 (PDF), but a lead agency must agree that the extraordinary need and the extraordinary costs incurred by the provider result in a rate necessary to meet the needs of the person. In addition, a lead agency must review its waiver budget in preparation to support the exception.
The lead agency will receive an email confirmation from DHS if it approves the rate exception. The email will have the approved rate and instructions for how to proceed in RMS to document the approved exception rate. The lead agency will then:
Lead agencies must renew service agreements annually. This renewal is meant to be a time to review a person’s needs and make any necessary changes. If a renewal does not occur annually, the person’s change-in-need may not be identified.. A lead agency should fill out the 5820 and, if the cost driver information and the rate is the same as the originally approved exception, the lead agency should check “renewal” on the 5820. No attachments need to be sent when the rate is the same as the prior year’s approval. Lead agencies are responsible for tracking exceptions and ensuring that the service need and the service based response has continued before renewing an exception.
Lead agencies must review service agreements annually (at a minimum). Under DHS policy, an exception rate will expire after one year from the effective date.
Yes. Lead agencies must wait to receive the approval notice for the original exception quest before submitting a renewal to line up MnCHOICES reassessment/renewal dates. If a lead agency submits a renewal for an exception at the same time it submits a new exception for the same client, DHS will deny the renewal and the lead agency will have to resubmit the renewal once it receives the approval letter for the original exception request.
If the change results in a lower-than-approved exception rate, the lead agency may submit an abbreviated exception renewal stating what has changed. For example, “fewer hours of staffing are needed because the person now attends a day program, but still needs staff with increased wages and/or training.”
If the change results in a need for a higher-than-approved exception rate, the lead agency must submit a new exception request with the increased cost drivers and supporting reasons for the increase.
If the requested rate, cost drivers or RMS inputs have changed, it still is considered a renewal. The lead agency will submit a new 5820 to DHS with supporting documentation and cost-driver information to support the change.
The lead agency may complete a new calculation in RMS showing the current (non-exceptional) need. The lead agency may then authorize the final rate produced by RMS, and the exception rate will naturally expire after one year. You do not need to notify DHS if the exception need lapses before the one year mark.
Yes, a lead agency should deny an exception request if:
A lead agency must inform DHS of its denial. DHS will document the denial and will only conduct further review if the conditions above were present and the lead agency did not comply with Minn. Stat. §256B.4914, subd. 14.
Ultimately, the provider and lead agency should work together to address this through discussion and/or service planning. If a provider feels it is being treated unjustly, it may email the DHS response center.
Yes, but DHS makes every effort to work with the lead agency and provider to determine whether a person is eligible for an exception, if the person is in need of an exception and if the cost drivers match the extraordinary needs of the person. If those connections cannot be made, DHS will deny the exception.
Denials at any level are only appealable by the person under Minnesota statute. A provider, however, may ask a lead agency to correct erroneous entries in RMS that affect a waiver rate.
The RMS framework rates include component values determined by extensive research. These costs reflect the costs determined by that research to provide specific services. If a person has needs that are outside of the determined component values, the provider must clearly identify and document those needs and how the RMS component values doesn’t meet the standard. For more information, see the Disability waivers rate setting frameworks page
The component values in the RMS are not reflective of nor are they direction on what a provider pays its staff. Staff wages are a provider’s business practice and the RMS is a tool to calculate what an entire service costs.
At this time, minimum wage is not an eligible reason for an exception, as it is not directly related to the needs of the person.
You must provide written documentation of your incurred cost drivers that are not included or are above the cost drivers in the RMS framework. Specific costs related to the extraordinary needs of the person are necessary to support an exception request. See the Lead agency provider tool for DWRS exceptions (residential), DHS-5820C (PDF) or the Lead agency provider tool for DWRS exceptions (day or unit), DHS-5820D (PDF) for definitions and component values.
No. A service rate cannot be the sole reason for demission of a person from service. Minn. Stat. §245D.10, subd. 3 and 3a identify how and when services may be disrupted and what is required when a provider determines it can no longer serve a person. DHS encourages providers and lead agencies to work together to best meet the needs of the person and to involve DHS, as necessary, before demitting a person.
Statute outlines when a person is eligible for an exception. If these criteria are not met, DHS cannot approve an exception. Lead agencies, people or families with concerns should contact the DHS Response Center for help if necessary.
Lead agencies have the authority to work on service planning, increase units of service or complete a service intensity if there have been changes in the person’s need that do not require increased cost.
No. DHS does not need to be notified of a service intensity change. This still is considered to be working within the RMS frameworks. If this change still does not meet a person’s need, that’s when an exception may be appropriate.
A lead agency and DHS cannot process an exception request without documentation of cost drivers that are not included in or are above the RMS framework-component values. Ultimately, DHS must be able to show the federal Centers for Medicaid & Medicare Services (CMS) why we allowed a person’s service rate to go outside of the state established methodology.
Yes, if the provider and lead agency agree that the higher rate is not needed to provide the service, the lead agency may submit an exception request to the lower rate.
The banding period currently is scheduled to conclude on a rolling basis in 2020. In accordance with state law, the federal government is considering extending banding for an additional year.
A pre-exception is a way for providers and lead agencies to anticipate who may receive a rate exception at the end of the banding period. Lead agencies may submit pre-exception requests to DHS for people with banded service rates before the end of the banding period. Pre-exception requests should be submitted upon renewal of the person’s 2019 service agreement. Lead agencies should use the DWRS exception request application, DHS-5820 (PDF) to submit pre-exception requests to DHS. All documentation requirements of an exception request apply to pre-exception requests.
It will help both sides plan. If the lead agency and the provider are in agreement about the need for a pre-exception when the person’s 2019 renewal comes up, the lead agency and the provider will know what steps both need to take. Providers and lead agencies will be able to plan request submissions and track decisions throughout 2019. Pre-exception requests allow providers to anticipate 2020 rate exceptions and allow lead agencies to anticipate budgetary impacts.
No. Pre-exception approved exceptions must meet the same criteria as current exception requests. Rate exceptions must be based on a person’s extraordinary need and the reciprocal level of service provided as it relates to incurred costs. The need for an exception should be apparent in the person’s support plan, and the lead agency must support the request for a pre-exception.
DHS will track the pre-exception approved amount and provide lead agencies with the rates for implementation of the banded rate exceptions at the end of banding.
Lead agencies should select the pre-exception option on the 5820 form.
Yes. The pre-exception request submitted to DHS by the lead agency will include the normal information required on the 5820 form along with the documentation that supports both the extraordinary needs of the person and the extraordinary costs incurred by the provider to meet those needs.
The lead agency will decide whether to support pre-exception requests using similar criteria to exception requests. The assessment and/or support plan must indicate the person has an extraordinary need for which the provider likely will incur extraordinary costs. The lead agency will not support requests that can be addressed by additional staffing or units of service without extraordinary costs for a component value. The lead agency also will not support requests that are based on program requirements and not the person’s needs.
No. Lead agencies must re-submit pre-exception approvals in 2020. If a person’s needs and associated cost drivers have not changed since the 2019 pre-exception request, the 2020 request may be submitted as a renewal.
The lead agency must submit a new rate exception request if a person’s needs and associated cost drivers have changed since the 2019 pre-exception request. Changes to rate frameworks between 2019 and 2020 may affect a request.
Lead agencies should prioritize processing regular exception requests over pre-exception requests.
DHS will process, make a determination and track pre-exception requests received from the lead agency. DHS will communicate the decision about each request back to the lead agency, and the lead agency will communicate that to the provider.
Yes, you can wait until 2020. The lead agency may submit a new rate exception in 2020 even if it didn’t request a 2019 pre-exception.
Providers can send a list of people who have extraordinary needs to designated lead agency contacts using the Pre-exception Communication Tool, DHS-5820B (PDF). The list should include people providers anticipate they will request a pre-exception for.
The provider can use the Pre-exception Communication Tool, DHS-5820B (PDF) to send the following to the lead agency:
The lead agency will decide if it agrees with your determination of extraordinary need and will communicate the decision for each person you submitted. If the lead agency agrees that a pre-exception is appropriate for the person, the lead agency will submit a pre-exception request to DHS at the person’s renewal during 2019.
Providers may email DHS if they experience issues with lead agency pre-exception processing.