Self-directed Medicaid services means that participants, or their representatives if applicable, have decision-making authority over certain services and take direct responsibility to manage their services with the assistance of a system of available supports. The self-directed service delivery model is an alternative to traditionally delivered and managed services, such as an agency delivery model. Self-direction of services allows participants to have the responsibility for managing all aspects of service delivery in a person-centered planning process.

Self-direction promotes personal choice and control over the delivery of waiver and state plan services, including who provides the services and how services are provided. For example, participants are afforded the decision-making authority to recruit, hire, train and supervise the individuals who furnish their services. CMS calls this "employer authority." Participants may also have decision-making authority over how the Medicaid funds in a budget are spent. CMS refers to this as "budget authority."

Self-Direction Options

States have several options under the State Plan and waivers for providing enrollees with the option to self-direct Medicaid services:

• Home and Community-Based Services State Plan Option- 1915(i)
• Community First Choice-1915(k)
• Self-Directed Personal Assistance Services State Plan Option-1915(j)
• Home and Community-Based Services Waiver Programs- 1915(c)

Self-Direction Guidelines

Each Medicaid funding authority has different guidelines but all authorities, share some common characteristics:

1. Person-Centered Planning Process: CMS requires that a person-centered planning process and assessment be used to develop a person-centered plan. The process is directed by the individual, with assistance as needed or desired from a representative of the individual's choosing. It is intended to identify the strengths, capacities, preferences, needs, and desired measurable outcomes of the individual. The process may include other persons, freely chosen by the individual, who are able to serve as important contributors to the process. The planning process must also include planning for contingencies such as when a needed service is not provided due to the worker being out sick. The contingency or "back-up" plan must become a part of the individual's person-centered plan. As part of the contingency planning process, an assessment of the risks to the individual must be completed and a discussion about how the risks will be addressed must be held.
2. Service plan: A service plan is the written document that specifies the services and supports that are to be furnished to meet the preferences, choices, abilities and needs of the individual, and that assist the individual to direct those services and supports and remain in the community.
3. Individualized Budget: An individualized budget is the amount of funds that is under the control and direction of the individual. The budget plan is developed using a person-centered planning process and is individually tailored in accordance with the individual's needs and preferences as established in the service plan. States must describe the method for calculating the dollar values of individual budgets based on reliable costs and service utilization, define a process for making adjustments to the budget when changes in participants' person-centered service plans occur and define a procedure to evaluate participants' expenditures.
4. Information and Assistance in Support of Self-Direction: States are required to provide or arrange for the provision of a system of supports that are responsive to an individual's needs and desires for assistance in developing the person-centered service plan and budget plan, managing the individual's services and workers and performing the responsibilities of an employer. Examples of self-directed supports include, but are not limited to: information regarding how a self-directed care program works; individual rights and responsibilities; and available resources; counseling; training; assistance, such as the use of a supports broker/consultant and financial management services (FMS); and access to an independent advocacy system available in the state. The amount and frequency with which an individual uses the available supports varies by person and circumstance.

Support Guidelines

A supports broker/consultant/counselor must be available to each individual who elects the self-direction option. The supports broker/consultant/counselor supports the individual in directing their services, and serves as a liaison between the individual and the program, assisting individuals with whatever is needed to identify potential personnel requirements, resources to meet those requirements, and the services and supports to sustain individuals as they direct their own services and supports. The supports broker/consultant/counselor acts as an agent of the individual and takes direction from the individual.

Financial Management Services

Financial Management Services (FMS) must be available to assist individuals in exercising budget authority. Individuals can perform some or all of the FMS functions themselves. Typically, however, individuals prefer that the FMS entity performs these functions for them. FMS helps individuals:

1. Understand billing and documentation responsibilities;
2. Perform payroll and employer-related duties (e.g., withholding and filing federal, state, local and unemployment taxes; purchasing workers' compensation or other forms of insurance; collecting and processing worker timesheets; calculating and processing employee benefits; and issuing payroll checks);
3. Purchase approved goods and services;
4. Track and monitor individual budget expenditures; and
5. Identify expenditures that are over or under the budget.

Quality Assurance and Improvement: Each State Medicaid Agency (SMA) is tasked with having in place a system of continuous quality assurance and improvement. The system must include activities of discovery, remediation, and quality improvement so that the state learns of critical incidents or events that affect individuals, corrects shortcomings and pursues opportunities for system improvement. The SMA also has overall responsibility for monitoring the system performance measures and individual outcome measures. (Note: It is important to check each funding authority for quality requirements, as they vary.)

History of the Self-Direction Option

Beginning in the 1990s, many states began to offer "consumer-directed" personal care services pursuant to section 1905(a)(24) of the Act, the optional state plan personal care services benefit. During the mid-1990s, the Robert Wood Johnson Foundation awarded grants to develop "Self-Determination" programs in 19 States, with self-direction of Medicaid services being a crucial aspect of self-determination. These projects primarily evolved into Medicaid-funded programs under section 1915(c) of the Act, the home and community-based services waiver program.

In the late 1990s, the Robert Wood Johnson Foundation again awarded grants to develop the "Cash and Counseling" (C&C) national demonstration and evaluation project in three states. These projects evolved into demonstration programs under the section 1115 authority of the Act. The Deficit Reduction Act (DRA) in 2005 authorized two more avenues for states to offer the self-direction option, i.e., section 1915(i) and section 1915(j) of the Act. In 2010, the Affordable Care Act, passed by Congress and signed by the President on March 23, 2010, authorized section 1915(k) of the Act to offer self-directed services.