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BUDGETING AND FUNDING

Budgeting

In general, new adult day centers should not plan to reach profitability for the first 9-24
months. Craig Kittelson, CFO of Augustana Care, has developed an Excel budgeting tool (see
document 04-003.16) that can provide guidance in the budget development process. If you are
interested in obtaining a copy, please contact Roni Falck at LeadingAge Minnesota at
651.529.2399 or rfalck@leadingagemn.org.

Consider the following when developing your budget:

Days open
Estimated daily census
Projected rates for varying payment sources
Other revenue sources (i.e. Federal Food Program, personal cares, transportation,
contributions)
Wages and fringe benefits (i.e. accrued vacation, health insurance, dental insurance,
workers compensation, FICA, retirement plans)
Consultant fees (if applicable)
Expenses related to administration, property, dietary, housekeeping and maintenance,
consultants and utilities
Licensure fees

Funding and Payment Sources

It is important to consider a number of factors when determining your funding and payment
sources. Public funding is available through Medicaid waivers and Veterans Benefits. Medicare
does not cover Adult Day Services. Some long term care insurance policies also provide
coverage for Adult Day Services. As you work with potential clients, it is helpful to understand
all of the payment options that are available.
Private Pay
Providers establish a daily fee, which includes meals, activities, outings, supplies, etc. Many
providers offer additional services, including baths and therapies, for an additional fee. It is
helpful to consider the market rate for services in your area. The 2016 Genworth Cost of Care
Survey found the average daily rate for Adult Day Services in Minnesota was $57. Providers
who accept Medicaid waivers may not charge less for private pay clients than for clients who
receive waiver funding.
Medicaid Waivers and Provider Enrollment
Medicaid waivers provide funding for home and community based services for individuals who
are eligible for Medical Assistance (MA) and require the level of care provided in a nursing

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A Product of LeadingAge Minnesota October 2016
home, but choose to reside in the community. Enrolled participants are assigned a case
manager from a lead agency,: a county, health plan or tribe, who is responsible for
authorizing services and funding to cover services that support the individual in their health
goals. The case manager determines the number of days a client may participate in the adult
day program under waivered funding. The state has defined processes for determining rates
and service authorizations under each waiver type.
In order to accept participants on waivers, you will need to enroll as a provider with Minnesota
Health Care Programs (MHCP). MHCP verifies providers licensure and maintains provider
agreements and other legal arrangements.
Visit www.dhs.mn.us/provider for additional information on enrolling as an MHCP provider.
Select Waiver and Alternative Care in the Select Your Provider Type dropdown. Select New
Enrollment under the Enrollment section and follow the instructions.
Once enrolled as a provider through MHCP, you may also need to contract with the lead agency
if it is a health plan. Coverage by health plans varies by area of the state, with some areas
having several options available (i.e. Medica, Health Partners, UCare, Blue Cross, Prime West).
Medicaid waiver rates are all inclusive for services offered throughout the day at the ADS.
Additional rate increments are available for bathing and transportation.
Elderly Waiver
The Elderly Waiver (EW) program serves individuals age 65 and older. The Minnesota
Department of Human Services operates the EW program under a federal waiver to
Minnesotas Medicaid State Plan.

EW defines adult day services as a program operating less than 24 hours per day that
provides an individualized and coordinated set of services (including health services,
social services, and nutritional services) directed to maintaining or improving a
recipients capabilities for self-care, including:

Supervision
Care assistance
Training
Activities based on the recipients needs and directed toward the achievement of
specific outcomes identified in the community support plan

Service goals include but are not limited to the following:

Optimizing health and cognitive functioning


Increasing socialization
Improving community integration

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A Product of LeadingAge Minnesota October 2016
Services must be designed to meet both the health and social needs of a recipient, and
may not be used solely for recreational or diversional purposes.

Disability Waivers
In order to be covered as a waivered service under the disability waivers, you must:

Offer opportunities to participate in community groups such as senior citizen centers


or clubs, generic service organizations, and adult education
Provide age-appropriate tasks and materials
Provide community integration opportunities enhancing social and physical
interaction with people without disabilities
Provide specialized therapies, alternative communication or other adaptive
equipment as the community support planning team determines necessary
CADI Waiver
The Community Assistance for Disability Inclusion (CADI) waiver serves individuals under
the age of 65 who are certified disabled by the Social Security Administration or the
State of Minnesota.
Brain Injury Waiver
The Brain Injury (BI) waiver serves people with a traumatic, acquired or degenerative
brain injury who require the level of care provided in a nursing facility that provides
specialized services for persons with BI, or who require the level of care provided in a
neurobehavioral hospital.
Veterans Benefits
Veterans Benefits may be a funding source for a qualified individual. Providers are required to
contract with the VA in order to receive VA funding.
LTC Insurance
Some Long Term Care Insurance policies offer Adult Day Services as a covered benefit.
Conditions may apply.
Essential Community Supports (ECS)
The Department of Human Services implemented the revised Nursing Facility Level of Care (NF
LOC) criteria and the Essential Community Supports (ECS) program on January 1, 2015. These
revised criteria are found in the MN Statutes 144.0724, Subd. 11. The ECS program description
and criteria are found in MN Statutes 256B.0922. Adult Day Services is one of the covered
services available through ECS.

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A Product of LeadingAge Minnesota October 2016
People who are not eligible for Alternative Care (AC) services, long-term care waiver services or
nursing facility services may qualify for up to $428 per month for essential services needed to
live in the community. There are two groups of people who may be eligible.

1) ECS for seniors


The first group includes people who meet all of the following criteria:

Are age 65 or older;


Are not eligible for Medical Assistance (MA);
Can benefit from one or more ECS services;
Meet Alternative Care financial eligibility criteria;
Do not or no longer meet the nursing facility level of care criteria
2) ECS for people in transition
The second group includes people who:

Were receiving BI Waiver, CADI Waiver, EW or nursing facility services and;


Lost MA eligibility for those services at their reassessment between January 1, 2015 and
December 31, 2015, due to changes in NF LOC criteria.
In addition, this second group:
No longer meet the nursing facility level of care (NF LOC) criteria
Are age 21 or older
Meet Alternative Care (AC) financial eligibility criteria if not on MA
Are not eligible for state plan (MA) Personal Care Attendant (PCA) services or Community
First Services and Supports (CFSS); and
Can benefit from an ECS service

People that retain their MA eligibility and assessed to have needs and ADLs are eligible for state
plan PCA services or Community First Services and Supports. They may not use ECS.
Residence
To receive ECS, one must live in their own home or apartment ECS cannot be provided in
congregate settings that may include:

Board and lodge


Non-certified boarding care
Corporate/family foster care

Child and Adult Food Care Program (CACFP)


CACFP supports institutions that want to initiate or improve food service in a variety of settings,
including adult day centers.

Adult day centers receive payments for serving nutritious meals to adults who are 60 or older,
or who are physically or mentally impaired to the extent that limits their independence and
ability to carry out activities of daily living.

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A Product of LeadingAge Minnesota October 2016
CACFP meals give adults the nutrition they need as a routine part of their day program.

CACFP reimbursements help lower the cost of serving meals at centers that provide adult day
services to meet the needs of functionally impaired adults.

Additional information on CACFP can be found at http://www.fns.usda.gov/cacfp/adult-day-


care-centers

Katie Adult Day Services Policies and Procedures Manual 04-001.16


A Product of LeadingAge Minnesota October 2016

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