Frequently Asked Questions:

MONA (Individual Resource Allocation) Question
Risk Pool Letter

Provider Reimbursement Rate Questions


Should additional or new information be needed, please address your questions to norm.davis@davisdeshaies.com. Responses for these questions will be developed by DDP staff and posted on the website as soon as possible. Should you have requests for additional project information, please contact Jeff Sturm at jesturm@mt.gov, or Matt Bugni at mabugni@mt.gov. 




Provider Reimbursement Rate Questions


1. How were provider rates developed?




The Montana Rate Reimbursement Project focuses on provider reimbursement rates for all Developmental Disabilities Home and Community-Based Services (HCBS) programs. Rates developed as a part of this project include:

·        Residential Habilitation (to include group homes and supported living)

·        Day Habilitation (to include vocational programs, day activity programs, supported employment programs, and combination supported employment  / day activity programs)

·        Behavior supports (both residential and day habilitation)

·        Health supports (both residential and day habilitation)

·        Children’s services (for HCBS eligible children)


A consulting firm, Mercer Government Human Services (later Davis Deshaies LLC), was retained to collect cost data from as many providers as possible and recommend standardized reimbursement rates based upon a comparison of these historical costs to national reimbursement benchmarks. The recommendations include rates that are limited to the current Montana legislative appropriation, as well as standardized rate benchmarks which can be used to increase (or decrease) provider rates should the state wish to do so in the future.


Detailed Discussion:


Rates for each of these services are calculated by defining four key cost components:

·        Direct Care Staff Wage

·        Employment Related Expenditures

·        Program Related Expenditures

·        General and Administrative Expenditures


Direct Care Staff Wage: The Direct Care Staff wage is selected from national compensation and wage studies and is determined according to the classification of direct care staff duties. Direct care staff are defined to be those individuals whose primary responsibility is the day to day support of people with disabilities, training and instruction, and assistance with and management of activities of daily living. Direct care workers can be either employees of an agency, or may be self-employed, so long as 85% of their work activities include daily supports to people with disabilities. For the purposes of this study, direct care staff job descriptions were benchmarked to four primary job classifications:

·        Homemakers: workers who primarily performed housekeeping, cooking, and environmental cleaning duties for people with long term care needs.

·        Personal care workers: workers who possessed high school degrees and were able to perform such duties as physical support / lifting, assistance with personal hygiene and activities of daily living, and transportation and mobility support.

·        Habilitation workers: workers who possessed some advanced training beyond high school and were skilled in teaching / training, behavior supports, administration of select health-related treatments, and community inclusion.

·        Vocational training workers: workers who were specially trained in supported employment to include job development and job coaching; education requirements varied from bachelor and masters levels.


Employment Related Expenditures: Employment related expenditures refer to the benefits package that is offered to all employees who are involved in the care and services provided to the person with disabilities. These costs can be categorized into two groups:


·        Discretionary Costs - Discretionary costs are those associated with benefits provided at the discretion of the employer and are not mandated by local, state, or federal governments. Such benefits may include (but are not limited to) health insurance, profit sharing, and retirement benefits or stock options.

·        Non-Discretionary - Non-discretionary costs are those related to employment expenditures that are mandated by local, State, and Federal governments and are not optional to the employer. Such expenditures include (but are not limited to) FICA, FUTA, SUTA and workers’ compensation insurance. Employee-related expenses vary for people who are self-employed and agency employees. Employer agencies bear the financial responsibility for workers’ compensation, while self-employed workers are required to pay all federal income taxes.


Program Related Expenditures: Programs Related Expenditures are those that are part of the operation of the setting in which residential habilitation occurs and related to the programs which occur within the setting, but are not directly tied to the direct care staff. These costs include the following:

·        Program support services such as staff trainers and clinical supervisors

·        Supervision of direct care staff

·        Qualified mental retardation professionals, registered records technicians

·        Program related supplies

·        Social services involving family counseling, estate and guardianship support

·        Program associated transportation

·        Records and consumer documentation requirements


General and Administrative Costs: General and Administrative costs are those associated with operating the organization’s business and administration and are not directly related to the clients or the programs that serve the clients. They include the following:

·        Administrative salaries to include agency director and secretarial support

·        Professional services to include management of payroll and accounts receivable

·        Insurance to include liability

·        Travel and entertainment not related to direct care activities

·        Office expenses such as supplies, equipment, and telephone

·        Program development and fund raising

·        Occupational and Health Safety costs

·        Depreciation and amortization on capital assets

·        Interest on capital debt

·        Real estate taxes

·        Property insurance

·        Other interests, miscellaneous, equipment rental


Source Information of Each Component: Each of the four cost components has been individually calculated for each HCBS service category. The four rate component dollar amounts and percentages were taken from the following sources.


  • Direct Care Staff Wage – Direct Care Staff Wage was calculated using compensation / wage data from four sources; e.g. Hayes Compensation studies, Health and Hospital compensation studies, US Bureau of Labor Statistics, and Mercer Human Services consulting wage and benefit surveys. These surveys specifically focused on the State of Montana, states in the western United States, and states with similar size and program demographics. Data from these surveys were aged forward at a rate of 0.95% per quarter based upon SFY 03 experience of 3.8% per year.


  • Employment Related Expenditures - Employment Related Expenditures were calculated using current federal and state tax requirements, workers’ compensation history, and health benefits data from the Seattle and Los Angeles Mercer offices. Employment Related Expenditures are expressed as a percentage which is applied to (added to) the direct care staff wage. Sources of data were the US Department of Internal Revenue Service, US Bureau of Labor, Montana Department of Labor and Industries, and Mercer Human Services health care and benefits surveys.


  • Program Related Expenditures - Program Related Expenditures were calculated based upon a cost survey of 17 sample agencies conducted by Mercer for the purpose of this study. Findings from the cost survey provided the basis for determining the program-related factor. Program Related Expenditures are expressed as a percentage which is applied to (added to) the total cost of care.


  • General and Administrative Expenditures - General and Administrative Expenditure levels are set at a percentage rate that is considered acceptable to the State of Montana, and Department of Public Health and Human Services (DPHHS). This policy benchmark is based upon a set of administrative workload standards. General and Administrative expenses are calculated as a percentage which is added to the total costs of Direct Care, Employee/Related Expenses, and Program-related Expenses.


Geographical Factors:   Mercer developed geographical factors based upon Mercer’s survey of a sample of provider costs, audited financial reports, and a market analysis of the following Bureau of Labor statistics:

·        Wages and compensation practices

·        Housing rent and lease costs

·        Uninsured workers

·        Crime statistics

·        Cost of living indices

These geographical factors are applied to all services. Based upon this analysis, Mercer factored a 4% adjustment for providers who deliver services in GALLATIN (Bozeman), MISSOULA (Missoula), YELLOWSTONE (Billings), LEWIS and CLARK (Helena), STILLWATER (Columbus), JEFFERSON (Boulder) counties. In addition, Mercer included a 2% adjustment for providers who deliver services in CASCADE (Great Falls), FLATHEAD (Kalispell), CARBON (Red Lodge), HILL (Havre), and SWEET GRASS (Big Timber) counties.


Agency or Group Provider:  When referenced in the Developmental Services HCBS rates, the terms “agency or provider” are defined in the Montana Developmental Services Waiver Services – Appendix A dated March 31, 2003. Specifically, an agency or group provider is a business, organization, or entity enrolled to provide a waiver service(s) that has one or more staff employed to carry out the enrolled service(s). All employees of an agency or group provider must meet the qualification and requirements specified for enrolled service(s).

2. What are the assumptions used for salaries and benefits?




For rate setting purposes, salary benchmarks were set at the 10th percentile for vocational and day program workers, the 25th percentile for group home workers, and the 50th percentile for supported living workers. Employee-related benefit costs are priced at 30.45% of direct care salaries. These benchmarks reflect what the state can currently afford to pay out as reimbursement to providers. Individual agencies are not required to compensate their employees at the benchmark levels, and may use non-state income to determine agency-specific compensation practices.


Detailed Discussion:


Sources for the Montana Compensation Study Findings salary data are the 2003/200404 Hospital & Health Care Professional, Nursing & Allied Services Personnel Compensation Report, 2003 US IHN Module 5 — Hospital Individual Contributors, 2003 National Survey of Key Professional and Technical Jobs, 2003 National Survey of Non-Exempt Compensation, 2003/2004 Geographic report on Technician and Skilled Trades, 2003 US Metropolitan Benchmark Compensation Survey, 2003/2004 Homecare Salary & Benefits Report, 2004 Mercer Human Resources Confidential Survey. Sources for the Bureau of Labor Statistics salary data are the Bureau of Labor Statistics – 1997 Survey aged forward at 3.8% per year, and the Bureau of Labor Statistics – 2002 Metropolitan Statistical Areas aged forward at 3.8% per year. Salaries do not include benefits, overtime compensation, or annual bonuses.


Job classifications used for Personal Support Workers are staff who perform at least 85% of the typical duties of a developmental disabilities attendant with a high school degree and no special training. Typical classifications include child care workers, home health care aides, nursing home aides, hospital orderlies, assisted living workers. Job classifications used for Habilitation Workers are staff who perform at least 85% of the duties of a developmental disabilities attendant with an Associate Arts degree or Certified Nursing Assistant, or special training. Typical classifications include nursing home assistants, vocational trainers, behavior assistants, special education teachers’ aides.


Compensation Study Findings


Job Classifications







Supported Employment / Living worker

 $  15.34

 $  9.25


 $  14.80

 $ 20.50

 $  20.50

Personal Support

 $    8.07

 $  6.75

 $  6.75

 $    6.75

 $   8.35

 $  11.36


 $    9.21

 $  7.68

 $  8.29

 $    9.10

 $ 10.13

 $   12.62


Benefit costs are divided into Fixed (or mandated) and Variable (or non-mandated) costs. Mandated (fixed) benefit percentages of payroll are specific to Montana per the Montana Department of Labor and Industry.  Information shown is drawn from US Department of Labor, Bureau of Statistics, Employer Costs for Employee Compensation West Region – March 2002 (includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming). Per the Montana State Department of Labor and Industries, employers paying SUTA may receive an offset credit of up to 5.4%. Since Montana employers with direct care employees pay an average of 1.37%, the net FUTA rate is generally 4.83%. Montana state average unemployment tax rate for 2003 / 2004 is 1.37% for employers of hospital and home health care workers with recorded claim experience. For new employers of this type, the percentage would be 1.33%. Health insurance includes medical, dental, vision, and LTD costs as listed above, as well as the costs of short-term disability and carve-out drug coverage. For Workers’ Compensation Insurance, data for Class Code 8833 – Hospital / Professional was take from the Montana section of Oregon Workers Compensation Premium Rate Ranking (Comparison by State) for 2003/ 2004, and compared to Workers’ compensation experience at the Montana Developmental Center. A factor of 4.3% was selected as representative of the current Workers’ Compensation costs. It should be noted that Workers’ Compensation insurance together with Health Care insurance are the two fastest rising costs, and will require continued attention for future rate-setting purposes. For Time Not Worked, providers were assumed to average individual employee costs for 10 paid holidays, 5 paid vacation days, 5 sick days, and 1 training day. These averages assumed that providers would continue to experience moderate staff turnover, and that new employees would not use full vacation or sick leave.



Fixed Staffing Costs (Employer Share)

Variable Staffing Costs (Employer Share)


Percent (%) of Payroll


Percent (%) of Payroll



Healthcare (medical, dental, vision)


Federally Required Payroll Taxes


Long-Term Disability


      Social Security



Time Not Worked (Paid Holidays, Sick Leave, PTO, Vacation)





State Unemployment Compensation (SUTA)


State Administrative Fund Tax




State-Mandated Workers’ Compensation Insurance


Retirement and Savings (401k, Profit Sharing, Defined Benefit Plan, Stock Bonus/ESOP)




Miscellaneous (Severance, Child Care, Employee Education)


Total Fixed Benefits Costs


Total Variable Benefit Costs


Total Employee-Related Expenses = 30.45%


3. What is a “billable unit” and how do providers invoice the Department?




A billable unit is defined as one hour of a Medicaid Home and Community-Based Service provided by a direct care staff employed by a qualified Medicaid HCBS provider. While hourly billable units may be aggregated into daily or monthly rates for provider invoicing convenience, providers will need to ensure that qualified direct care staff were scheduled and present, and that consumers were enrolled for service and in attendance.


Detailed Discussion:


During the course of a typical day of providing services to people, direct care staff perform a range of duties. These duties include assisting people with activities of daily living, training in skills acquisition and behavior support, maintaining health and wellness, keeping people safe and free from harm, finding and maintaining jobs, and participating in community and family inclusion. To conduct these duties, direct care staff provide hands-on support during the day as well as monitoring during the night. Direct care staff participate in individual service planning and receive training from health and / or behavior specialists. All of these activities are included and are considered part of the “billable unit”.  For a provider to claim reimbursement for direct care staff billable hours, the provider must have documentation that the direct care staff met the following conditions:

·        Was hired as a direct care employee of the provider agency as demonstrated by personnel files

·        Was scheduled as a direct care worker and worked during the time invoiced as demonstrated by staff attendance records

·        Was compensated by the provider for direct care work as demonstrated by payroll documentation


Additionally for a provider to claim reimbursement, the provider must have documentation that the consumer met the following conditions:

·        Was enrolled in the HCBS program

·        Was present and attended the provider agency program during the time invoiced


In some instances when unanticipated direct care staff absences occur, other provider agency staff may cover for missing direct care staff. Providers may bill for non-direct care staff substitutes, and are required to maintain documentation via amended staff schedules when substitute staff are used. Direct care duties may not exceed 20% of the time of non-direct care substitutes.



4. How do the new rates compare to the current reimbursement practices?




The new rates represent an average of the current provider reimbursement experience. As such, 28% of the current providers have rates that exceed (by 5% or more) the proposed standard rate schedule; 36% of the current providers have rates that are lower (by 5% or more than the standard rate schedule.


Detailed Discussion:


During the months of September 2004 and October 2004, the Department conducted a rate shadowing effort to determine how the rate benchmarks proposed in the rate study compared to current practice. That study is available on this web-site in file Shadowing Report – September & October 2004.



5. Are the rates final, and if not, what are some of the issues still to be decided?




No. The initial rates were based upon both the historical reimbursement practices for Montana providers as well as national benchmarks. These rates now will be tested and adjusted for accuracy and adequacy during the next six months.


Detailed Discussion:


The Department initiated a pilot study beginning in January 2005 to test the adequacy of the reimbursement rates and the relationship of those rates to the individual service authorization standards designed in the Montana individual resource allocation system (MONA). This pilot effort will continue through June 2005. Key to the pilot effort is the introduction of person-centered planning and personal outcome measures. In addition, the 2005 Legislature is considering provider reimbursement rate adjustments to the rate benchmarks. Questions to be tested are:

·        How do the rates impact direct care staff turnover?

·        How do the rates impact provider financial viability?

·        Do the rates allow both individual portability and provider stability?

·        What new services are people purchasing, and do the rates adequately reflect market changes?




MONA (Individual Resource Allocation) Questions


1. What is the MONA, and what is its purpose?


The Montana Individual Resource Allocation system (MONA) is an instrument which compares the amount of services that people with similar needs receive from the HCBS program. It is NOT a needs assessment instrument and is not intended for clinical use. Instead, the MONA is intended to provide people and their families with an estimate of the amount of public funds which are “usually and typically” provided. In addition, the MONA is intended to provide people with tool to estimate the “usual and typical” cost of new or different services should they wish to change. As people complete their person-centered plans, the MONA allocations will provide funding guidelines to assist people with their purchasing decisions. While the MONA guidelines use typical service utilization patterns for pricing purposes, these guidelines ARE NOT intended to suggest or guide people in their selection of personal supports and services. The MONA is a pricing guideline, and not a service authorization instrument.



2. How was the MONA designed and calibrated?




The MONA considers four primary cost drivers:

·        Age of the individual

·        Living Situation (e.g. with family, own home, supported living, group home)

·        Geographical location of providers

·        Key support needs to include community inclusion, behavioral support needs, health support needs, and current abilities.


Typical direct care staff utilization trends for people of different ages, living situations and locations, and key needs were analyzed and priced. These analyses resulted in series of individual service utilization standards. As people age, change living situation / locations, and as their support needs evolve, different individual service standards are mathematically applied to update the anticipated cost of the new services. The basis for calibrating the initial MONA algorithms is the historical and current Montana provider practice. Resource Allocation Sheets (RAS) for people participating in the HCBS program were examined, and the amount of direct care supports received were calculated. Findings from these calculations were used to define the MONA base and three levels of add-ons for various age / living situation groups. During the pilot phase of the design, these practices will be evaluated to determine whether the amount of services recommended in the MONA is sufficient to achieve the personal outcomes that people have selected.



Detailed Discussion:


The individual service standards are described in detail and available on this web-site in file MONA Service Utilization Standards.



3. How will the MONA allocations affect the amount of service people are currently receiving?




The MONA may suggest a different amount of service than people are currently receiving. During the pilot phase of the project, people and providers will be held financially harmless. However, eventually once fully-implemented, the MONA cost guidelines are intended to be the basis for assigning public funds to people on the HCBS waiver program.


The MONA serves as a tool to people and families to assess the amount of public funds that are typically available through the state. Once people have built their plans, the MONA cost guidelines will provide a test of affordability.  Individual situations may require different amounts of support than are predicted in the MONA, and in those instances, people should build their plans based upon unique need. The MONA does not adequately capture the costs of people with extreme health or behavioral needs, and provides a separate cost schedule (Appendix A) to calculate those costs.


Detailed Discussion:


Copies of the MONA for adults and children are available on this web-site in file MONA (Adult Version), Davis Deshaies LLC. and MONA (Child Version 2005), Davis Deshaies LLC.  Additionally, copies of the individual budget worksheet tool are available on this web-site in file Individual Budget Planning Tool, Davis Deshaies LLC.



4. Can the MONA be administered consistently and fairly?


Certain portions of the MONA such as age, living situation and location are easy to administer consistently. The key support needs domains, however, have proved much more difficult to reliably assess. Case Managers received initial training on the MONA and completed MONA reviews on all people enrolled in HCBS program by September 2004. These initial MONA reviews have been compared to Resource Allocation Sheets and in some instances to individual service plans and assessments. In summary, the initial MONA allocations appeared to authorize 1-to-1 staffing for 25% of the people receiving HCBS services (national average is 5%), and the MONA assigned amount of hours of services exceeded the current provided hours by 7%.  A look-behind review of MONA responses was conducted and the number of people requiring 1-to-1 staff support was reassessed to now reflect 3% of the people in Montana HCBS services to require the intense staffing.


Based upon the initial feedback and the results of the pilot, additional case management training and reliability checks will need to be built into the MONA administration in order to assure consistency.



5. What is the Pilot Project that started in January 2005, and will there be other pilot efforts?




The initial pilot effort involves 42 people statewide and will operate from January 1, 2005 until March 1, 2005.  At that time, the pilot will be expanded to include approximately 10% of the people receiving HCBS programs in Montana. The initial pilot is intended to test the proposed MONA service algorithms for adequacy, and to also get baseline data on personal choice and outcomes. These initial findings will be used to define the larger pilot effort beginning in March 2005.


Detailed Discussion:


The initial pilot involved a statewide sample of people from a variety of provider agencies. As such, the ability of people to purchase different supports and the flexibility of providers to design their current services is limited.  The second pilot will focus on specific providers, service categories, and regions with the intent that both people and providers will have flexibility to make needed changes in the provision of supports.


People participating in the pilots will receive Individual Allocations based upon their MONA scores. Using Person-Centered Planning, people will build an Individual Cost Plan and Key Personal Outcomes. As needed, people and families will receive technical assistance in developing family cooperatives, micro-boards, circles of support, and other means to increase personal choice and community inclusion. As person-centered plans are defined, case managers will assist people in selecting service providers and initiate the appropriate contract and invoicing procedures. The Department quality assurance staff will collect personal outcome data and provide people with feedback.


Providers in the Pilot will receive business development assistance in:

·        Market Analysis

·        Cash Flow Management

·        Human Resource Management

·        Strategic Planning

·        Implementing Self-Directed Supports focused on Choice & Empowerment