Administrative Rules of the State of Montana

BEFORE THE Department of Public

health and human services of the

STATE OF MONTANA

In the matter of the adoption of New Rules I through VIII and the amendment of ARM 37.34.913 pertaining to reimbursement for the provision to persons with developmental disabilities of services and items covered as benefits of the various programs of services administered by the developmental disabilities program

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NOTICE OF ADOPTION AND AMENDMENT

TO: All Concerned Persons

1. On June 9, 2011, the Department of Public Health and Human Services published MAR Notice No. 37-548 pertaining to the public hearing on the proposed adoption and amendment of the above-stated rules at page 1008 of the 2011 Montana Administrative Register, Issue Number 11.

2. The department has adopted the above-stated rules as proposed: New Rule I (37.34.3001), II (37.34.3002), III (37.34.3005), IV (37.34.3006), V (37.34.3007), VI (37.34.3012), VII (37.34.3013), and VIII (37.34.3015).

3. The department has amended ARM 37.34.913 as proposed.

4. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

Comment #1: A comment was received by the department regarding the data used by the department to establish the "geographic factor" that was applied to the different counties in setting certain reimbursement rates for services. The commenter stated that in the proposed September 1, 2011 version of the Service Reimbursement Rates and Procedures Manual (hereafter Rates Manual), only Carbon County had no geographic adjustment, where prior to this edition of the Rates Manual it had a geographic factor of 2%. The commenter stated that the department should have used demographic data other than what was used, including "non-HUD rent" in order to determine that the county should have received an increase rather than a decrease. The commenter noted that her analysis of the data used by the department showed that two other counties should have had higher geographic factors in their counties.

Response #1: The department identified and applied cost factors that were common to all counties and that were most relevant to what direct care staff experience and to the challenges in hiring those staff. In addition, availability of reliable data and ease of updating the department's information was a consideration in the factors that were chosen to be evaluated. It was determined that housing costs which include mortgage payments are not as relevant for direct care staff (since most don't own their own homes) and that rental costs are more appropriate. Private party rent data is not available in a complete and reliable format, so HUD rent data was used. The three cost factors which are easily available, reliable, transparent, and most applicable for direct care staff are: annual average wages, unemployment rates, and rent.

The department reviewed the data sources and the comments regarding the cost factors for two counties and found them to be correct. There are some reports that have been updated since the initial evaluation in early June that do affect two counties. The department has adjusted the geographic factors for those two counties and the adjustments will appear in the updated version of the September 1, 2011 Rates Manual. The updated information did not result in any geographic application to Carbon County.

Comment #2: A commenter expressed a concern about the required use of the Agency Wide Accounting Client System (AWACS) to invoice the department for services. The commenter asked what process the department would use to allow providers to invoice if the AWACS system is not functioning.

Response #2: The department shares the commenter's concerns that there is the institutional capability to handle billing if the AWACS system fails. The department maintains the contingent ability to process manual invoices if the AWACS system should fail for an extended period of time.

Comment #3: An issue raised by a commenter regarded the Tier system used by the department for its supported employment services reimbursement rates. The commenter noted that the Tiers are not multiples of each other and, as a result, it is difficult to blend service billing into more than one Tier. The commenter suggests that a combination of the established unit and hourly rate would be helpful.

Response #3: The monthly units for supported employment services are based on average ranges of service hours that individuals were receiving. The monthly units were not designed to be divisible by one another. The Tiers remain the same as previously used editions of the manual: Base = 1-10.5 hours, Tier 1 = 11-21 hours, and Tier 2 = 21-31 hours. Rates schedules back to 2007 and the Career Plan can verify these ranges have not changed. A change in any of the ranges for the reason to make them multiples of each other would be a change in the methodology without data to substantiate it. In addition, the system is not designed to accommodate monthly units and hourly units for the same service at the same time, and changes in that rule are not planned.

For future planning purposes, the department has obtained the assistance from the State Employment Leadership Network (SELN) and will be reviewing our entire employment services system. Changes to supported employment services are expected and could lead to changes in the reimbursement system.

Comment #4: A comment was received in which the commenter requested to know the year of the data used by the department to calculate the "GeoFactor" and whether there is more recent data available.

Response #4: During the department's initial review in early June 2011, the data used for the geographic factors were the following: Department of Labor 2009 Annual Average Wages, Department of Labor Unemployment data from April 2011, and Housing/apartment Rent from HUD in March 2011. As a result of this comment, the department reviewed all the data sources and found that more recent data for Unemployment and Housing/Rent has been posted. The department obtained the newer data and updated our results on July 12, 2011. Based upon current level of funding available, the new reimbursement rates along with the updated geographic percentages and counties eligible for geographic adjustments will appear in the September 1, 2011, Rates Manual.

The geographic factor language originally proposed in the September 1, 2011, Rates Manual stated:

"Geographical factor: Geographical cost adjustment factors consider annual average wage, cost of housing/rent, and unemployment. Based upon these factors, geographical cost adjustments are provided for residential and day habilitation providers in the following counties:

1.7% add-on: Beaverhead, Glacier, Park, Blaine, Lake, Hill, Ravalli, Madison, Mussellshell, Dawson, Lincoln, Custer.

4.47% add-on: Gallatin, Missoula, Yellowstone, Lewis & Clark, Stillwater, Jefferson, Fallon, Flathead, Rosebud, Big Horn, Powell, Richland, Silver Bow, Sweet Grass, Toole, Cascade."

The new language for the September 1, 2011 Rates Manual states:

"Geographical factor: Geographical cost adjustment factors consider annual average

wage, cost of rent, and unemployment. Based upon these factors, geographical

cost adjustments are provided for residential and day habilitation providers in the

following counties:

1.84% add-on: Beaverhead, Park, Blaine, Lake, Hill, Ravalli, Madison, Dawson,

Lincoln, Custer.

4.48% add-on: Gallatin, Missoula, Yellowstone, Lewis & Clark, Stillwater, Jefferson,

Fallon, Flathead, Rosebud, Big Horn, Powell, Richland, Silver Bow, Sweet Grass,

Toole, Cascade, Musselshell, Glacier."

/s/ Cary B. Lund /s/ Laurie G. Lamson for

Rule Reviewer Anna Whiting Sorrell, Director

Public Health and Human Services

Certified to the Secretary of State August 15, 2011