Self-directed Medicaid services empower participants, or their authorized representatives, to take charge of their care. This model offers an alternative to traditional agency-managed services, granting individuals greater decision-making authority over their support and how it’s delivered. In essence, participants gain the responsibility to manage various aspects of their service delivery through a person-centered planning approach.
This self-direction approach champions personal choice and control in accessing both waiver and state plan services under Medicaid. This includes significant decisions such as choosing, recruiting, hiring, training, and supervising the individuals who provide their care services. The Centers for Medicare & Medicaid Services (CMS) refers to this level of control as “employer authority.” Furthermore, participants may also have “budget authority,” allowing them to decide how Medicaid funds allocated within their budget are spent to best meet their needs.
Exploring Self-Direction Options within Medicaid
States provide several avenues for enrollees to opt for self-directed Medicaid services, utilizing both state plans and waivers to facilitate these programs. These options are designed to provide flexibility and control to individuals needing care.
Key Guidelines of Self-Directed Medicaid Programs
While specific guidelines can vary across different Medicaid funding authorities, several core characteristics are consistently present in self-directed care programs:
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Person-Centered Planning Process: At the heart of self-directed care is a person-centered approach. CMS mandates the use of this process, along with a thorough assessment, to create an individualized plan. This process is driven by the participant, with support from a representative of their choice if needed. The focus is on identifying the individual’s strengths, capabilities, preferences, needs, and desired, measurable outcomes. Individuals can freely include others who they deem important contributors to this planning process. Crucially, the plan must also incorporate contingency plans, addressing situations where a service might be disrupted, such as a worker being unavailable due to illness. This “back-up” plan becomes an integral part of the person-centered plan. Risk assessment and mitigation strategies are also essential components of this planning phase.
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Service Plan Development: The service plan is a formal, written document detailing the specific services and supports that will be provided. It is tailored to align with the individual’s preferences, choices, abilities, and needs, all with the goal of enabling them to direct their services effectively and remain within their community.
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Individualized Budget Authority: An individualized budget represents the allocated funds that participants have the authority to manage and direct. This budget is developed through the person-centered planning process and is uniquely customized to meet the individual’s needs and preferences as outlined in their service plan. States are required to have a clear methodology for calculating these individual budgets, based on reliable cost data and service utilization patterns. They must also establish procedures for adjusting budgets when changes occur in a participant’s person-centered service plan and for evaluating how participants are spending their allocated funds.
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Comprehensive Support and Information: States are obligated to establish or arrange for a robust system of supports designed to meet the diverse needs of individuals choosing self-direction. This support system assists individuals in various aspects, including developing their person-centered service and budget plans, managing their services and support workers, and fulfilling employer responsibilities. Examples of these vital self-directed supports include: detailed information on how the self-directed care program operates, clarification of individual rights and responsibilities within the program, access to available resources, counseling services, training programs, practical assistance through support brokers or consultants and financial management services (FMS), and access to an independent advocacy system within the state. The level and frequency of support utilization are personalized and vary depending on individual needs and circumstances.
The Role of Support Brokers and Consultants
A key element of self-directed care is the availability of support brokers, consultants, or counselors for each participant. These professionals play a critical role in assisting individuals to effectively direct their services. They act as a crucial link between the participant and the Medicaid program, providing essential support to identify personnel needs, locate resources to fulfill those needs, and ensure sustained support as individuals manage their own care. Importantly, the support broker or consultant operates as an agent of the individual and takes direction from the participant, ensuring the individual’s autonomy remains central.
Financial Management Services (FMS) Explained
Financial Management Services (FMS) are a mandatory support component, specifically designed to aid individuals in managing their budget authority within the self-directed care program. While individuals have the option to handle some or all FMS functions independently, most prefer to utilize an FMS entity to perform these tasks. FMS provides crucial assistance in several key areas:
- Understanding Billing and Documentation: FMS helps participants navigate the complexities of billing procedures and documentation requirements associated with Medicaid services.
- Payroll and Employer Responsibilities: A significant function of FMS is managing payroll and employer-related duties. This includes handling tasks such as withholding and filing federal, state, local, and unemployment taxes, securing worker’s compensation or other necessary insurance, collecting and processing employee timesheets, calculating and managing employee benefits, and issuing payroll checks accurately and on time.
- Purchasing Approved Goods and Services: FMS assists in the process of purchasing goods and services that are pre-approved within the individual’s service plan and budget.
- Budget Tracking and Monitoring: FMS provides essential services for tracking and monitoring individual budget expenditures, ensuring transparency and accountability.
- Expenditure Oversight: FMS helps participants identify any expenditures that are approaching, exceeding, or falling under budget limits, facilitating proactive budget management.
Quality Assurance and Continuous Improvement: State Medicaid agencies (SMAs) bear the responsibility for maintaining a system of continuous quality assurance and improvement within their self-directed care programs. This system encompasses activities focused on discovery, remediation, and ongoing quality enhancement. The goal is to identify critical incidents or events that may impact individuals, address any shortcomings in service delivery, and actively pursue opportunities for system-wide improvement. SMAs are also ultimately responsible for monitoring key system performance metrics and individual outcome measures. (It is important to note that specific quality requirements may vary depending on the funding authority, so it’s crucial to verify the regulations for each specific program.)
A Brief History of Self-Directed Care in Medicaid
The movement towards self-directed care within Medicaid began in the 1990s. Many states initiated “consumer-directed” personal care services under section 1905(a)(24) of the Social Security Act, which pertains to optional state plan personal care services. In the mid-1990s, The Robert Wood Johnson Foundation played a pivotal role by awarding grants to foster “Self-Determination” programs across 19 states. Self-direction of Medicaid services was a core principle of these initiatives. These early projects largely evolved into Medicaid-funded programs operating under section 1915(c) of the Act, the home and community-based services waiver program.
Furthering this progress in the late 1990s, The Robert Wood Johnson Foundation again provided grants to develop the “Cash and Counseling” (C&C) national demonstration and evaluation project, initially in three states. These C&C projects transitioned into demonstration programs authorized under section 1115 of the Act. The Deficit Reduction Act (DRA) of 2005 introduced two more pathways for states to offer self-direction: section 1915(i) and section 1915(j) of the Act. In 2010, the Affordable Care Act further expanded these options by authorizing section 1915(k) of the Act to facilitate self-directed services, solidifying the commitment to person-centered care within Medicaid.
