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FY 2019 Provider Rate Increase FAQ's

Background

During the past legislative session, Governor Haslam and the Tennessee General Assembly dedicated approximately $50 million in state and federal dollars towards a rate increase for providers contracted with the Department of Intellectual and Developmental Disabilities.  The legislation clearly states the funds are for the sole purpose of increasing the Direct Support Professional (DSP) staff salary component in the DIDD provider rate methodology, with a legislative intent to increase the hourly wages of DSPs at DIDD contracted provider agencies.

This rate increase includes both recurring and nonrecurring funds.  Approximately $34 million of the money dedicated for this increase is “one-time” money that must be reauthorized by the state legislature in the following legislative session.

The current rate methodology assumes an average hourly wage of $9.15 per hour for DSPs.  The recurring funding included in the budget increases the average hourly wage from $9.15 to $9.41.  The non-recurring funding further increases the average hourly wage of DSP staff from $9.41 to $10.00 an hour.  The total funding was calculated on $0.85 average hourly wage increase for DSPs.

The legislation clearly states the funding is intended to increase the wages of direct support professionals.  Each provider agency will need to determine the best strategy to honor the legislative intent.

  • What does the legislation actually say about the rate increase?
    The exact language of the Appropriations Act regarding the increase is as follows:
    “In addition to any other funds appropriated by the provisions of this act, there is appropriated the sum of $11,700,000 (non-recurring), to be matched with any SA1121 010000 -11- and all available federal funds, to the Bureau of Tenncare for the sole purpose of increasing the current DSP staff salary component in the DIDD/provider rate methodology. It is the legislative intent that this appropriation increase the hourly wages of direct care staff employed at the contracted agencies of the Department of Intellectual and Developmental Disabilities for the home and community-based waiver programs for individuals with intellectual and developmental disabilities. Prior to January 1, 2019, the Comptroller of the Treasury shall conduct a survey of salaries actually paid to direct care staff as a result of the appropriation in this item and shall report the results of the survey to the members of the General Assembly no later than February 1, 2019.”
  • What does recurring and non-recurring mean?
    Recurring funding is funding that is authorized by the Governor and General Assembly year after year unless specifically identified for a budget cut.  The recurring portion of the rate increase will increase the average DSP pay in the DIDD rate methodology to $9.41 an hour.

    Non-recurring funding is “one-time” money that must be reauthorized by the General Assembly in order to continue in future years. It is expected that the Comptroller’s review of utilization of this increase for DSP wages will weigh heavily into the decision as to whether to reauthorize these funds.  The non-recurring portion increases the average DSP wage in the rate methodology to $10.00 an hour.

    Providers have always made decisions on how best to pay their staff, but the legislation is targeting an average wage of $10.00 an hour.
  • I already pay my direct support professionals $10.00 an hour.  Am I still required to use this rate increase to raise their pay?
    Yes. The language in the Appropriations Act reads “The sole purpose of these funds is to increase the current DSP staff salary component in the DIDD/provider rate methodology”.   It is important to understand that the DIDD/provider rate methodology is calculated at an average hourly wage.  This appropriation is to be applied beginning July 1, 2018 and cannot be used to offset previous increases. Even though an agency’s average DSP hourly wage may exceed $10.00, the legislative intent is that “this appropriation increases the hourly wages of direct care staff.”  
  • Some of my staff currently make less than $9.15 an hour, do I need to bring everyone’s wages to at least $10.00 an hour?
    It is important to understand that the DIDD/provider rate methodology is calculated at an average hourly wage.   This takes into account that new hires may be paid less than staff who have been with the agency for many years.  Overall, the extra funding represents an 85 cent hourly increase from last year and the legislation is targeting an average hourly wage of $10.00.
  • Are front-line supervisors included in the raise?
    The rate methodology also addresses an increase for supervisory staff whose responsibility includes filling in for DSPs as a part of their job functions, but not their primary responsibility.  This is separate from the 85 cent hourly increase targeted toward DSP pay.
  • Who should be included in my calculations for my agency’s average DSP wage?
    When providers are determining their DSP’s average hourly wage, the average should be based on only DSP’s wages and should exclude all supervisors.
  • Can I use a bonus for the non-recurring portion of the increase?
    Providers can choose to use an hourly wage increase or a bonus.  If bonuses are used, please see the information at the following link: https://www.bakerdonelson.com/a-wage-and-hour-pitfall-paying-bonuses-to-non-exempt-employees-can-lead-to-trouble
  • Does the rate methodology take into account benefits, increased payroll taxes and workers compensation costs?
    The language in the Appropriations Act reads “The sole purpose of these funds is to increase the current DSP staff salary component in the DIDD/provider rate methodology”.   The rate increase includes administrative and benefits costs, in addition to the 85 cent hourly increase that should go solely to benefit DSP salaries.
  • Can my plan for the rate increase take into account shift differentials and longevity?
    The provider plan can account for differences in how DSPs are paid but be aware that how the funding is used must be planned and must address in advance how and why the differences exist.  For instance, the overall increase must establish an average hourly wage at or beyond $10.00.  A provider may want to pay new hires a specified rate, and DSPs can be paid a different rate based on years of experience.   It will be important to treat people with the same amount of experience in the same way regarding pay.  
  • How do we account for the time between services rendered and payment issued with the rate increase included?
    Providers should develop their payment plan with the understanding that due to billing and employee payment cycles, the payments with the new rate increase DSP pay may not be recognized until September. Regardless, each provider should develop a plan that explains how the rate increase will be used to improve the wages of all direct support staff.  The plan should clearly explain how the additional funds granted by the General Assembly have been distributed to all direct support staff working for the provider and should justify and account for all of the increased funding.  DIDD recommends that all employees be treated in an equitable manner and wage increases should not be arbitrary.
  • Should we submit ISPs with an effective date after July 1, 2018 with the new rates?
    Yes.  Cost plans already submitted were automatically updated by DIDD to reflect the new rates from 7/1/18 forward.  Going forward, service plans should be submitted using the new rate table published on June 13, 2018.  
  • Will the rate increase be applied to the new rate structure proposed for Employment and Day Services?
    Amendments to the Statewide, CAC and SD waivers will soon be submitted to CMS for employment and day services.  When DIDD is notified of what has been approved, information pertaining to the pertinent rates will be distributed.
  • What about staff providing supports for the CHOICES and Employment and Community First CHOICES program?
    This rate increase applies to direct support professional wages in only the 1915c waivers operated by the Department of Intellectual and Developmental Disabilities.
  • Will the rate increase for Independent Support Coordination (ISC) agencies be subject to Comptroller review?
    ISC Agencies received a 1 percent increase as part of the Governor’s recommended budget.  This is separate from the rate increase for direct support professional wages that is part of the appropriation by the General Assembly and will not be included in the Comptroller review.
  • What should I do to prepare for a possible Comptroller review of the increase?
    The department does not know the methodology that will be used or how many providers will be reviewed as this survey will be strictly performed by the Comptroller’s Office. Once you have developed your plan as to how to pass this extra funding on to your DSPs, it’s extremely important you maintain documentation to prove these funds have been used solely for this purpose, as the Comptroller’s office may request your agency records as part of their review.
  • I am a direct support professional.  Should my pay increase be effective in July?
    While the increase is effective on services rendered starting on July 1, due to billing and employee payment cycles, the provider payments with the new rate increase for DSP pay may not be recognized until September.  While some providers developed a plan that started the increase in July, others have developed a plan that pays the increases out in a different timeframe, including, in some cases, bonuses.   As long as the plan developed passes on the entire rate increase to DSP pay, it’s up to the provider to determine how and when to pay its staff.  It is expected that providers communicate their plans to DSPs.
  • I work for more than one agency, why have the agencies increased my wages by differing amounts?
    It has always been up to providers to determine how to pay their staff, and they will be responsible for developing a payment plan that passes this increase on to their staff.  Those plans may look different at each provider, based on shifts, tenure, and other business decisions. Providers may also choose to pass on this increase could as an hourly wage increase, a bonus or a combination—it is up to the provider to determine how best to utilize these funds to benefit their staff.  As mentioned about it is expected that providers communicate their plan to their staff.
  • With this increase, should I be making $10.00 an hour?
    While the department has adjusted the average DSP wage in its reimbursement structure to $10.00 an hour, that is an average wage based on the ranges of all DSPs as many providers pay their DSPs different rates based on tenure, shifts,  job duties, etc.  As mentioned above, it has always been up to providers to determine how to pay their staff, and they will be responsible for developing a payment plan that passes this increase on to their staff.   This increase could come as an hourly wage increase, a bonus or a combination—it is up to the provider to determine how best to utilize these funds to benefit their staff. 
  • Why did my agency only raise my hourly pay by 26 cents?
    As mentioned previously, this increase includes what’s called “recurring” and “nonrecurring funds”.  Recurring funds are funds that are continued in the state budget year after year unless specifically cut by the General Assembly.  Non-recurring funds are “one-time” funds that must be specifically reauthorized next year by the legislature.  If they are not reauthorized, those funds will not be included in future budgets. The “recurring” portion represents a 26-cent increase in the average hourly wage.  Many providers have chosen to only apply the recurring funds to the hourly rate increase and utilize the “one-time” portion as a bonus, since it is possible those funds may not be available for DSP pay in future years.
  • My provider has told me nothing about a pay increase, does that mean I won’t get one?
    Every provider is expected to communicate how they plan to pass on this rate increase to their staff.