Page posted: 1/23/14
Page reviewed: 12/5/17
Page updated: 12/5/17
Federally approved BI, CAC. CADI, DD and EW waiver plans, Alternative Care (AC) program (Minn. Stat. §256B.0913), Minn. Stat. Chapter 65B, Minn. Stat §245C.02, Minn. Stat. §245C.04, Minn. Stat. §626.556, Minn. Stat. §626.557, Minn. R. 9505.2160 to 9505.2245
Approval-option services (formerly Tier 2 and Tier 3 services): Group of basic services available under the home and community-based waiver and Alternative Care (AC) programs. An approval-option service provider enrolls with MHCP or is approved by a willing lead agency. Approval-option services include direct-delivery services and purchased-item services. (For a complete list, see approval-option services list.)
Vendor: An entity that a lead agency approves to deliver an approval-option service. An MHCP-enrolled, approval-option service provider cannot also seek approval to deliver services through a lead agency.
Most services available under the AC and home and community-based (HCBS) waiver programs must be delivered by a provider enrolled with Minnesota Health Care Programs (MHCP). We refer to these as DHS enrollment-required services.
A group of basic waiver/AC services can be delivered by an MHCP-enrolled provider or a qualified vendor approved by a lead agency. We refer to these as approval-option services. This option ensures people have adequate access to basic services statewide.
The lead agency may choose to use exclusively MHCP-enrolled providers or, for these basic services, to approve its own service vendors. DHS encourages lead agencies to exercise the option to approve service vendors as necessary to ensure people on the AC and waiver programs have access to needed services.
This page outlines the process the lead agency must follow to approve its own vendors to deliver approval-option services.
This page reviews the following lead agency requirements:
1. Minnesota HCBS Waiver/AC – Approval-Option Service Vendor Tracking Log, DHS-7004A
2. Minnesota HCBS Waiver/AC – Approval-Option Service Vendor Assurance Statement, DHS-7004B
3. DHS background study
The lead agency may use the following tools:
1. Minnesota HCBS Waiver/AC – Documentation Requirements for Approval-Option Service Vendors, DHS-7004
2. Minnesota HCBS Waiver/AC – Approval-Option Service Authorization, DHS-7004C
3. CBSM waiver/AC service pages
We created a comprehensive training that reviews the requirements and tools for lead agency approval of approval-option service vendors. To access the training, see TrainLink – Lead Agency Oversight of HCBS Waiver/AC Approval-Option Service Vendors.
Approval-option services include direct-delivery services and purchased-item services.
(Note: We are in the process of integrating AC and EW information into the CBSM waiver/AC service pages. Until we complete this process, refer also to the service information on MHCP Provider Manual – EW and AC.)
(Formerly Tier 2 services)
A direct-delivery service is delivered by an individual in or around the home, or in a non-commercial vehicle. Direct-delivery services include the following. An asterisk (*) marks the services that are direct-contact services:
(Formerly Tier 3 services)
Purchased item services include:
The lead agency must complete an entry on the Minnesota HCBS Waiver/AC – Approval-Option Service Vendor Tracking Log, DHS-7004A (PDF) for every vendor it approves to deliver an approval-option service.
What it is
The vendor tracking log is programmed to direct the lead agency through the federal and state requirements a vendor must meet to be qualified to deliver approval-option services. The lead agency should consult the individual CBSM waiver/AC service pages for additional information, as needed.
How to use it
The lead agency must enter the following information in the tracking log for each vendor it approves:
The lead agency may customize the vendor tracking log with additional columns of data. Add new columns after the final column ("next vendor review date").
The lead agency must re-review direct-delivery service vendors at least once every five years. The lead agency's re-review of purchased-item service vendors is discretionary.
AC discretionary services must be approved per program application requirements.
The lead agency must obtain a signed Minnesota HCBS Waiver/AC – Approval-Option Service Vendor Assurance Statement, DHS-7004B (.DOC) from each vendor it approves to deliver direct-delivery services.
What it is
In signing the vendor assurance statement, the vendor agrees to:
1. Alert the authorizing case managers/care coordinators to suspend service delivery when a required:
2. Ensure it properly handles and safeguards protected information it collects, creates, uses, maintains or discloses on behalf of DHS and the people it serves through its waiver/AC programs
4. Comply with all federal statutes, regulations and guidance that prohibit discrimination based on race, color, national origin, sex, age, religion and disability
5. Deliver services:
7. Accept MA payment as full payment for waiver/AC services it provides
8. Maintain, for five years, fiscal records and supporting documentation that verifies it delivered services as authorized
9. Comply with Minnesota's reporting procedures for:
Update and retention timelines
For each direct-delivery service vendor it approves, the lead agency must:
AC discretionary services must be approved per program application requirements.
There is a subset of approval-option: direct-delivery services that state statute and the waiver plans define as direct-contact services (Minn. Stat, §245C,02, subd. 11). Direct-contact services require a DHS background study.
The lead agency must ensure each vendor it approves to deliver direct-contact services successfully completes a DHS background study through NETStudy 2.0.
Direct-contact services include only the following approval-option: direct-delivery services:
How to do it
For instructions to request DHS background studies through NETStudy 2.0, required documentation and retention timelines, see CBSM – Background study process for lead agencies that approve vendors to deliver direct-contact, approval-option services.
DHS recommends the lead agency use its own service authorization to document the service delivery terms and rate agreement reached with a waiver/AC service vendor.
How to use it
The service authorization should specify service delivery requirements that align with the person's support plan. The lead agency uses just one service authorization per vendor. If a vendor will provide multiple approval-option services, the lead agency can include information for each service in the one agreement.
The lead agency may use the Minnesota HCBS Waiver/AC – Approval-Option Service Authorization, DHS-7004C (.DOC) as a template.
Note: Purchased-item services often generate a simple receipt. In this case, there is no need for a service authorization.
County and tribal agencies complete authorizations in MMIS for services delivered by approval-option service vendors using their county/tribal NPI number. Counties and tribal nations are responsible to:
Medical Assistance (MA) requirements
Each vendor that receives Medical Assistance (MA) funds to deliver approval-option services must adhere to these standard requirements:
1. A vendor must deliver services to a person on a waiver that are of the same quality it would provide to the general public, in accordance with Section 1902(a)(10)(B) – (E) of the Social Security Act.
2. A vendor must implement regulations and guidance in compliance with federal statutes that prohibit discrimination based on race, color, national origin, sex, age, religion and disability in any program or activity that receives federal financial assistance from the U.S. Department of Health and Human Services. (42 C.F.R. §430.2).
3. A vendor must ensure it properly handles and safeguards protected information it collects, creates, uses, maintains or discloses on behalf of DHS and in accordance with the federal Health Insurance Portability and Accountability Act (HIPPA). This includes, but is not limited to, the requirements of the:
A direct-delivery service vendor signs a vendor assurance statement, DHS-7004B, which assures its compliance with these requirements.
Service delivery management and oversight
The lead agency is responsible to oversee the delivery of all approval-option services it authorizes.
When evaluating a vendor for service delivery, the lead agency may choose to:
The lead agency should watch for suspect business practices, such as when the vendor submits:
If problems arise
If the lead agency discovers a problem with a vendor's service delivery, it should address the issue immediately. If problems remain unresolved, the lead agency should terminate its relationship with the vendor as appropriate.
If a lead agency terminates a relationship with a vendor, it should document it in the vendor tracking log, DHS-7004, including the date and brief reason for termination. DHS encourages lead agencies to report vendor problems to the Better Business Bureau.
Record retention timelines
Per its MHCP provider agreement, the lead agency must retain all records that fully disclose the extent of approval-option services provided to a person on a waiver or the AC program for a minimum of five years. This includes vendor bills and receipts for each service provided to a person and any relevant shipping invoices or delivery logs.
County and tribal agency collaboration
County and tribal agencies may choose to collaborate on service vendor review and approval. This may include generating a jointly signed vendor assurance statement, DHS-7004.
If they do, they must comply with the following requirements:
Managed care organizations
A managed care organization (MCO) may authorize a vendor not enrolled with MHCP to deliver approval-option services in the following ways:
Work directly with a vendor
When the MCO works directly with a vendor, it must assure the vendor meets state standards. The MCO must:
Work through a willing county or tribal agency
The MCO may authorize services provided by a county or tribal agency, or a vendor a county or tribal agency approved.
When the MCO authorizes services provided by a vendor approved by a county or tribal agency, the county or tribal agency is responsible to assure the vendor is qualified to deliver services.
When an MCO works through a county or tribal agency, the following conditions apply:
As the case manager/care coordinator develops a service plan with a person who receives services through an MCO, he or she must verify the services are provided in-network or with prior authorization, as required by the MCO.
Documentation Requirements for Approval-Option Service Vendors, DHS-7004 (PDF)