Sec. 18. (a) The definitions set forth in 460 IAC 6-3 as of January 1, 2021, apply to the terms that are used in this section.

     (b) As used in this section, “benefits” means allowances and services provided by employers to employees as compensation that is in addition to salary and wages, including but not limited to paid time off, health insurance, life insurance, worker’s compensation, and qualifying pensions.

     (c) The office of the secretary shall increase the reimbursement rate for services if the services are provided as follows:

(1) The services are provided to an individual who receives services under a Medicaid waiver under the federal home and community based services program.

(2) The individual is authorized under the Medicaid waiver described in subdivision (1) to receive any of the following services:

(A) Adult day services.

(B) Prevocational services.

(C) Residential habilitation and support.

(D) Respite.

(E) Extended services as defined in the family supports Medicaid waiver and the community integration habilitation Medicaid waiver.

(F) Day habilitation, as defined in the family supports Medicaid waiver and the community integration habilitation Medicaid waiver.

(G) Workplace assistance, as defined in the family supports Medicaid waiver and the community integration habilitation Medicaid waiver.

(H) Residential habilitation and support (RHS daily).

(I) Transportation services.

(J) Participant assistance and care, as defined in the family supports Medicaid waiver.

(K) Facility based support, as defined in the family supports Medicaid waiver and the community integration habilitation Medicaid waiver.

(3) The services are delivered to the individual by a direct care staff.

     (d) The amount of the increase in the reimbursement rate described in subsection (c) for a state fiscal year beginning July 1, 2021, or upon approval of CMS, or thereafter is the reimbursement rate in effect as of June 30, 2019, for the services listed in subsection (c)(2) multiplied by fourteen percent (14%).

     (e) An authorized service provider shall use at least ninety-five percent (95%) of the amount of the increase in the reimbursement rate to pay payroll tax liabilities and to increase the wages and benefits paid to direct care staff in comparison to payroll tax liabilities, wages, and benefits paid to direct care staff as of the provider’s most recent fiscal year ended on or before December 31, 2019, who:

(1) are employed by the authorized service provider to provide services in Indiana;

(2) provide support services listed in subsection (c)(2); and

(3) are paid on an hourly basis.

     (f) If a provider does not use at least ninety-five percent (95%) of the increase to pay payroll tax liabilities and to increase wages and benefits paid to direct care staff, the office shall recoup part or all of the increase in the reimbursement rate that the provider receives as provided in subsection (h).

     (g) An authorized service provider providing services in Indiana shall provide written and electronic notification of its plan to pay payroll tax liabilities and to increase wages and benefits to:

(1) direct care staff described in subsection (e) who are employed by the provider; and

(2) the office of the secretary;

within thirty (30) days after the office implements an increase in reimbursement rates.

     (h) The office may recoup the difference between ninety-five percent (95%) of the amount received by a provider as a result of increased reimbursement rates and the amount of the increase that is actually used by the provider to pay payroll tax liabilities and to pay an increase in wages and benefits to direct care staff. The remaining five percent (5%) may be retained by the provider to cover administrative and overhead costs.

     (i) Providers shall maintain all books, documents, papers, accounting records, and other evidence required to support the reporting of payroll information for payment of payroll tax liabilities and for increased wages and benefits to direct care staff. Wages are defined as total compensation, including paid time off and training, less overtime and shift differential for direct care staff providing services to individuals receiving the services described in subsection (c)(2) as reported on the provider’s payroll records. Providers shall make these materials available at their respective offices at all reasonable times and for three (3) years from the date of final payment for the services listed in subsection (c)(2) for inspection by the state or its authorized designees. Providers shall furnish copies at no cost to the state if requested.

     (j) The office or its designee may recoup all or a part of the amount paid using the increased reimbursement rates based upon an audit or review of the supporting documentation required to be maintained under subsection (i) if the provider cannot provide adequate documentation to support the payment of payroll tax liabilities and the payment of increased wages and benefits to direct care staff.

     (k) If required, the office shall file Medicaid waiver amendments for the family supports Medicaid waiver and the community integration and habilitation Medicaid waiver related to rate increases and Medicaid waiver caps only on or before October 1, 2021, with the earliest possible effective date allowed by the federal Centers for Medicare and Medicaid Services. If the federal Centers for Medicare and Medicaid Services denies the Medicaid waiver amendments, the office may modify the waiver amendment request. If a waiver amendment is not approved, rate increases may not be granted under this section.

     (l) This section may not be construed as creating an employment relationship of any kind between office staff and direct care staff of an authorized service provider.

As added by P.L.217-2017, SEC.78. Amended by P.L.165-2021, SEC.137.