Today, DHS released their guidance for the 2022 rate increase encumbrance report. We have been eagerly waiting for this bulletin to give providers clarity about how they can reward care staff in the last half of 2021 and whether those investments could count towards the encumbrance.
The news is good! According to the announcement, providers who are subject to the rate increases that will go into effect starting on January 1, 2022 MAY COUNT increased compensation changes that occurred after July 1, 2021 to meet the 80% revenue requirement. However, providers may not seek additional rate changes before January 1, 2022.
The distribution plans must include 3 elements:
- A description of the intent of the rate increases and the encumbrance
- An estimate of the dollar amount the provider expects to receive from the rate increases from January1, 2022 and March 31, 2024
- A description of how the additional dollars will be used to fulfill the 80% requirement
The distribution plans must be posted by December 31, 2022 (yes, that’s next year), must be available to all direct care employees for at least 6 months, and must be made available to DHS on request.
See the official announcement for more details.
Contact DHS or Ken Bence with any questions.
Ken Bence, Director of Research, Analysis and Policy