CEO Corner

7% Cut

Back in March, I wrote of proposed cuts of 7% to everyone on the new Disability Rate System or DWRS. Last fall, a willfully incorrect explanation of various increases individuals received in 2013, 2014 and 2015 was made by the Department of Human Services (DHS) to the Center for Medicaid & Medicare Services (CMS). In response, CMS terminated the federal share of this 7% for one year. The Governor’s office and DHS decided to make the 7% a permanent cut in the Governor’s budget.

Providers, through their trade associations like ARRM, worked in the legislature this past session to ensure that Minnesota made up the federal share and did not impose the cut. The legislature put in enough money to fix the problem for one year. But, as many of you know, for its own political purposes the legislature created only one spending bill, which was ultimately vetoed by the Governor for reasons not related to our issue.


DHS has moved to implement the cuts effective July 1 . These will cost HBI approximately $100,000 in 2018 and around $500,000 by the time the system becomes fully operational, either in 2020 or 2021. They will be seriously damaging if not catastrophic. It is entirely possible that the new low rates may jeopardize some placements.

To stop DHS from implementing the cuts, ARRM and the day program provider trade association called MOHR sued the state in federal court. Both organizations asked for a temporary restraining order, on the basis that DHS was implementing cuts that were never authorized by law (the increases have never been repealed). Unfortunately, the Judge ruled against people with disabilities. She found that the request was premature because individuals have the right to appeal rate cuts individually. They must do so first and be turned down.

Both ARRM and MOHR are reconsidering their options. If any HBI families whose relatives are on the new waiver rate system wish to pursue an appeal please let me know.

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