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FAQs: Direct Care Workforce Funding Initiative

Direct Care Workforce Funding Initiative Update

Providers are required to complete one annual survey. In the annual survey, providers will indicate how the Direct Care Workforce funds are being used and determine the effectiveness of the program.

The most recent annual survey closed in March 2022. It collected information about payments distributed since June 2021, which included calendar year (CY) 2021 payments 1 and 2.

State Fiscal Year (SFY) 2021-2023 Direct Care Workforce Allocation Timeline
Payment Amount Distribution to Providers Encounter Basis
2021 payment 2 $51.1 million November 2021 CY 2021 March–June data
2021 payment 3 $90.7 million June 2022 CY 2021 July–December data
CY 2021 redistribution Remaining 2021 funding November 2022 CY 2021 July–December data
2022 payment 1 $59.7 million December 2022 CY 2022 January–June data
2022 payment 2 $59.7 million June 2023 CY 2022 July–December data
CY 2022 redistribution Remaining 2022 funding   CY 2022 July–December data
Total $247.4 million

Payments are subject to federal Centers for Medicare & Medicaid Services (CMS) approval. Additional details and updates will be provided as they become available.



The 2021–2023 biennial budget provided $127.8 million in SFY 2021–2022 and $119.5 million in SFY 2022–2023 for Direct Care Workforce Funding Initiative payments.

This funding is nearly double the 2019–2021 budget amount.

The Wisconsin Department of Health Services (DHS) will make the first direct care workforce payment authorized under the 2021–2023 biennial budget in November 2021. Managed care organizations (MCOs) have been directed to start distribution of this payment on November 12 and to complete distribution November 26.

Below are frequently asked questions about the long-term care Direct Care Workforce Funding Initiative. If you have additional questions or comments, please email us.

For the purposes of the Direct Care Workforce Funding Initiative, a direct care worker is defined as an employee who contracts with, or is an employee of, an entity that contracts with a managed care organization (MCO) to provide:

  • Adult day care services.
  • Daily living skills training.
  • Habilitation services.
  • Residential care (adult family homes of 1–2 beds, adult family homes of 3–4 beds, community-based residential facilities, residential care apartment complexes).
  • Respite care services provided outside of a nursing home.
  • Supportive home care.
  • Supported employment services.

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

  • Assisting with activities of daily living or instrumental activities of daily living
  • Administering a member’s medications
  • Providing personal care or treatments for a member
  • Conducting activity programming for a member
  • Providing services such as food service, housekeeping, transportation, individual or group supported employment, prevocational employment, or vocational futures planning to the member

Staff not in the definition of direct care worker include, but are not limited to:

  • Licensed practical nurses, registered nurses, and nurse practitioners
  • Nursing home staff and personal care agency staff
  • Staff in marketing, sales, reception, finance, or maintenance and plant operations
  • Staff who work exclusively in food service, transportation, and housekeeping and do not have direct contact with members

DHS will determine the specific amount each provider is eligible to receive. Since participation is voluntary, some providers may decline the funding. Payment amounts fluctuate based on the available pool of funding for each payment. Redistribution payment amounts are significantly less than other payment amounts since this funding pool is limited to ineligible and declined funding from the original payment pool.

The amount of funding each provider is eligible to receive will be calculated as follows:

  1. DHS divides the amount for each payment by the total MCO payments to direct care providers. This determines the payment allocation all direct care providers will receive. For this calculation, DHS assumes all providers are participating in the initiative.
  2. Finally, DHS multiplies the percentage increase by the payments each provider received during that payment from the MCO it contracts with. The result determines the payment amount to each provider.

Calculation example: If DHS calculates a 1% allocation for all providers and one specific provider received a total of $30,000 from an MCO in payment period, that provider would receive a direct care workforce payment of $300 from the MCO.

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

MCOs will be contractually obligated to pay providers the entire direct care workforce payment received from DHS.

Providers will receive a payment from each MCO they have a current contract with. Providers then pay their direct care workers using the direct care workforce funding received from MCOs.

Direct care workforce payments are made based on the most recent and complete datasets. These datasets started as quarterly and fluctuated for payments distributed during the COVID-19 pandemic in an effort to distribute funding to providers in a timely manner. The encounter basis for SFY 2021–2023 payments is available in the table at the top of this page.

2022 payment 2 will conclude the distribution of the SFY 2021-2023 direct care workforce payments. Additional payments are subject to the 2023-2025 state budget and CMS approval. Details will be provided as they become available.

The following provider types will receive funding:

Providers of adult day care services, daily living skills training, habilitation services, residential care (adult family homes of 1–2 beds, adult family homes of 3–4 beds, community-based residential facilities, residential care complexes), respite care provided outside of a nursing home, supportive home care services, and supported employment services.

These organization types are not eligible for funding:

  • Providers of self-directed services
  • Nursing homes, personal care agencies, and MCOs
  • Providers that decline to participate in this voluntary program
  • Providers that discontinue operations or go into bankruptcy

DHS will monitor that the direct care workforce funding amount MCOs pay to each provider matches the amount DHS calculated each provider should receive.

After each payment, MCOs will be required to attest they paid the direct care workforce funding to providers.

MCOs are required to distribute 100% of the direct care payments under the contract between DHS and the MCOs.

Sign a contract with MCO
The provider must sign a contract to receive funding from the MCO. The provider must have an active contract with the MCO at the time the funds are distributed. To be eligible for the first payment, the provider must sign and return the direct care worker provider agreement, and the MCO must receive it within 45 days of the date the MCO originally sent the agreement.

Distribute funding
Providers are required to distribute funding to direct care workers.

Providers will no longer be required to complete the quarterly attestation and survey process. However, providers will be required to complete an annual survey to indicate how the funds are being used and determine the effectiveness of the program.

In the online survey, providers will be required to report how they paid the funding to direct care workers. Examples include wage increases, bonuses, or additional paid time off for direct care workers.

Maintain documentation
Providers will need to keep documentation identifying the precise amounts paid to each direct care worker.

Providers may use the funding to:

  • Provide wage increases, bonuses, and/or additional paid time off to direct care workers.
  • Pay for employer payroll tax increases that result from increasing workers' wages.
  • Some allowable COVID-19 direct care workforce expenses include, but are not limited to, additional paid time off, hazard pay, increased overtime, and increased weekend and night differentials. Temp agency costs are not allowable expenses.

Other uses of the funding are not allowed.

Providers will now have six months to distribute each payment to workers and may claim expenditures made in the prior 12 months as appropriate uses of the direct care workforce funding.

Yes. Owner-occupied adult family homes are providing direct care and therefore are eligible for the direct care workforce funding.

No. DHS does not expect providers to have dedicated staff for Medicaid members. Any direct care worker that provided services to a Family Care and Family Care Partnership member in Wisconsin may receive the funding.

No. Providers are not required to spend more than the direct care workforce funding. Providers may choose which direct care workers receive the funding, as long as the direct care worker has provided services to a Family Care and Family Care Partnership member in Wisconsin.

Last revised November 10, 2022