Medicaid: Direct Care Workforce Funding Initiative Information and FAQs

A direct care worker is defined as an employee who has a contract with, or is employed by, an organization that contracts with an MCO to provide:

• Adult day care services.
• Daily living skills training.
• Habilitation services.
• Residential care (adult family homes of one to two beds, adult family homes of three to four beds, community-based residential facilities, and residential care apartment complexes).
• Respite care services provided outside a nursing home.
• Supported employment services.
• Supportive home care.

A direct care worker also provides one or more of the following services through direct interactions with members:

• Giving medicine
• Helping with the activities of daily living or instrumental activities of daily living
• Planning activities
• Providing personal care or treatments
• Providing:
  • Food services
  • Housekeeping
  • Transportation
  • Individual or group employment support
  • Prevocational employment support
  • Vocational planning

Those who aren’t considered direct care workers include (but aren’t limited to):

• Licensed practical and registered nurses, and nurse practitioners.
• Nursing home and personal care agency staff.
• Staff in:
  • Finance
  • Maintenance and plant operations
  • Marketing o Reception
  • Sales
• Staff who don’t have direct contact with members and work exclusively in:
  • Food services
  • Housekeeping
  • Transportation

DHS determines the amount each provider receives. Because it’s their choice to participate, some providers may decline the money. The payment amount can change based on the available budget for each payment period. Redistribution payments are funded by any payments calculated for providers who did not meet eligibility requirements at the time of payment or who declined funding from the original payment. For this reason, the redistribution payment amounts are significantly less than other payment amounts.

This is how we calculate payments:

1. DHS divides the amount for each payment by the total MCO payments to direct care providers during that time period. This determines how much each direct care provider will receive. For this, DHS assumes the providers agree to the funding. (Budgeted amount/total MCO payments = percentage)
2. Next, DHS multiplies the percent increase by the payments each provider received during that payment from its MCO. The result is the amount paid to each provider. (Percentage x provider payment = direct care provider payment)

Example: If DHS calculates each provider will receive 1%, and one provider received $30,000 from an MCO in that payment period, the provider would receive $300 from the MCO. (1% x $30,000 = $300)

DHS calculates the amount each provider will receive and pays that amount to the MCOs for Family Care and Family Care Partnership.

MCOs must give their providers the entire payment they received from DHS. Their contracts require it.

Providers receive a payment from each MCO they have a contract with. They pay their currently employed direct care workers using that money.

We make payments based on the most recent and complete datasets. These started as quarterly and changed during COVID-19 to give providers their funding more quickly.

You can find the encounter basis (payment period) for state fiscal year 2021–2023 and 2023–2025 payments in the table at the top of the page.

The first payment for state fiscal year 2023–2025 will be distributed in December 2023. 2024 payments depend on CMS approval and future payments depend on the 2025–2027 state budget.

These provider types receive funding:

• Adult day care services
• Daily living skills training
• Habilitation services
• Residential care (adult family homes of one to two beds, adult family homes of three to four beds, community-based residential facilities, and residential care complexes)
• Respite care services provided outside a nursing home
• Supported employment services.
• Supportive home care.

These provider types are not eligible:

• Nursing homes, personal care agencies, and MCOs
• Self-directed services
• Providers that decline to participate
• Providers that stop operations or go into bankruptcy

There are three ways:

1. DHS makes sure the amount MCOs pay to each provider matches the amount we calculated.
2. After making each payment, MCOs must confirm it from their accounting system and provide a signature stating it was made.
3. The contract between DHS and MCOs requires MCOs to distribute 100% of the payments.

1. The provider must sign a contract with an MCO to receive funding. The contract must be active when they receive the funding. The provider must sign and return the provider agreement. The MCO must receive the signed agreement within 45 days of the date they sent it for the provider to get the payment.
2. The provider must distribute funding to direct care workers.
3. The provider must complete an annual survey to show how they’re using the money. In the survey, they must report how they paid direct care workers. This could include:
   1. Bonuses.
   2. More paid time off.
   3. Wage increases.
4. The provider must keep documentation on the exact amounts paid to each direct care worker.

Providers can use the money to:

• Give:
  • Bonuses.
  • More paid time off.
  • Wage increases.
• Pay for payroll tax increases from increasing workers’ wages.

Providers can’t use the funding to pay temp agency costs. Other uses are also not allowed.

Providers have six months to distribute each payment to workers. They may claim costs from the past 12 months.

Yes. Because they provide direct care, they can get funding.

No. We don’t expect providers to have dedicated staff for Medicaid members. Any direct care worker that provides services to a Family Care or Family Care Partnership member in Wisconsin may receive funding.

No. Providers don’t have to spend more than what they’re given. They may choose which workers receive funding, as long as it’s a direct care worker who has provided services to a Family Care or Family Care Partnership member in Wisconsin

In 2022, almost 500 providers received more direct care workforce funding than they should have. Lakeland Care, Inc., one of the MCOs DHS relies on to confirm data used to calculate the payments, made a mistake that caused this.

Because Lakeland's providers were overpaid, providers paid through other MCOs were underpaid. DHS is adjusting payments in 2024 in fix this mistake.

• Providers who were overpaid will receive reduced payments in 2024.
• Providers who were underpaid will receive additional funds in 2024.

Learn more on the Direct Care Workforce Funding: 2024 Payment Adjustments webpage.