ANCOR in the News - 08.04.22

New ANCOR Research Examines Direct Support Professional Wage Assumptions in Rate Setting

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With the direct support professionals (DSP) workforce crisis threatening access to services, the way states account for DSP wages during rate-setting processes is critical to ensuring Home and Community Based Services are available for individuals with intellectual and developmental disabilities. While approaches to rate-setting vary by state, most states utilize the federal Department of Labor’s Bureau of Labor Statistics (BLS) Standard Occupational Classifications (SOCs) to inform their rate models. However, because there is currently no stand-alone occupational classification for DSPs, state models vary widely, which directly impacts DSP wages. Without the ability to track DSP workforce trends at the federal level, wage components remain stagnant, leading to high turnover and vacancy rates.

For these reasons, ANCOR consulted with Burns & Associates, a division of Health Management Associates (HMA-Burns), to produce this report detailing the wage sources states use when setting rates for services provided by DSPs. HMA-Burns conducted a review of rate models across 26 jurisdictions and documented key aspects of the compensation for services provided by DSPs. This enabled HMA-Burns to create a national comparison of the data sources used to establish DSP wage assumptions, the extent states accounted for inflation within that data, and any benefit rates for DSPs incorporated into the rate models.

Key findings of the report indicate a substantial reliance on data from the BLS to establish wage assumptions. However, without a specific BLS occupational classification for DSPs, states are using a composite of varied proxy occupations, none of which accurately capture the work that DSPs perform. Similarly, benefit rate assumptions vary significantly across states. While most rate studies indicated some form of wage inflation at the time of rate setting, few states have mechanisms to continue to increase wages for ongoing inflation.

The lack of a standardized occupational classification for DSPs creates a system among states that leaves DSPs without consistent benchmarks for wage-setting and leaves policymakers without comprehensive data to make informed decisions about how to implement policies to strengthen the direct support workforce. ANCOR supports the creation of a new SOC for DSPs, which has the potential to expand access to home and community-based services for people with intellectual and developmental disabilities by recruiting and retaining more DSPs and elevating the DSP profession.

Have questions about the report or interested in learning more? Contact Lydia Dawson, ANCOR’s Director of Policy, Regulatory, and Legal Analysis.

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