HHS Logo: bird/facesU.S. Department of Health and Human Services

Addressing Liability Issues in Consumer-Directed Personal Assistance Services (CDPAS): The National Cash and Counseling Demonstration and Selected Other Models

Executive Summary

Charles P. Sabatino, J.D., and Sandra L. Hughes, J.D.

Commission on Law and Aging, American Bar Association

January 2004

This report was prepared under contract #HHS-100-02-0018 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and Boston College. For additional information, you may visit the DALTCP home page at http://aspe.hhs.gov/daltcp/home.htm or contact the ASPE Project Officer, Pamela Doty, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is: pdoty@osaspe.dhhs.gov.

The research reported herein was performed pursuant to a contract awarded to Boston College Graduate School of Social Work by the Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE). The opinions and conclusions expressed are solely those of the authors and should not be construed as representing the opinions or policy of Boston College or HHS/ASPE or any agency of the Federal Government. The views expressed herein have not been approved by the House of Delegates or the Board of Governors of the American Bar Association, and should not be construed as representing the policy of the American Bar Association.

This report addresses the liability issues that may arise in government-sponsored consumer-directed personal assistance programs (CDPAS). In analyzing these issues, the report focuses on the programs implemented in Arkansas, Florida and New Jersey as part of the Cash and Counseling Demonstration, but also briefly addresses variations on the liability analysis for two well-established CDPAS programs, California's In-Home Supportive Services Program and New York's Consumer-Directed Personal Assistance Program. The purpose of this report is twofold: first, to identify the circumstances in which negligence or other misconduct could result in liability and what persons or entities are likely to be liable; and second, to identify steps that can be taken to reduce exposure to such liability.

The methodology for this analysis involved review of all available program materials and operational procedures, relevant law and regulations, available literature and reports on the state programs,1 and telephone interviews with several key contacts from the three Cash and Counseling programs and the California and New York programs. Legal research revealed that there are very few reported cases that discuss liability issues in the context of government sponsored consumer-directed care. Consequently, much of the legal analysis in this report is based on either the application of basic legal principles of tort law or analogies to comparable situations where appropriate. However, in the case of claims between workers and consumers, there is considerable case law that is directly analogous, in the context of both traditional agency care and privately employed care providers.

Although not identical, the Cash and Counseling programs in Arkansas, Florida and New Jersey share the following characteristics:

In this model of consumer-directed care, the state relinquishes considerable control over services to consumers. This raises the concern that in the absence of state control, there may be a decline in the quality of care and that: (1) poor care may result in injury to consumers; and (2) the state or its agents may be held responsible for the injury. However, the preliminary data from the Cash and Counseling Demonstration supports the conclusion that there is no increase in risk of injury to consumers under the consumer-directed model of care, compared to agency-provided care.2

Building on that conclusion, this analysis of liability risk (i.e., the risk of being held legally responsible for the injury suffered by another) finds that the risk of liability as between the consumer and the worker is no greater than that encountered under agency provided care. In addition, because in many cases family members serve as CDPAS workers under this model of care, there is, as a practical matter, less likelihood that the parties will seek compensation for personal injuries in the courts.

Putting aside any impact of familial relationships, personal assistance workers face a heightened theoretical risk of liability if they are negligent in performing caregiving duties, compared to agency provided care, because in the latter structure the agency shoulders the ultimate responsibility for injury under the doctrine of vicarious liability. Absent the agency, the individual worker employed by the consumer bears the sole legal responsibility for injuries caused by the worker's negligence. However, the practical likelihood of liability is influenced by the extent of assets or insurance owned by a prospective defendant. Individuals providing personal assistance are likely to have insignificant assets compared to agencies and in practical terms, are therefore likely to be "judgment proof."

In the case of injury to workers while on the job, liability risk is affected dramatically by the availability of workers' compensation. Where workers are not covered by workers' compensation benefits, consumers who have assets are more likely to be subject to suit for compensation if a worker is injured on the job, because of the absence of other remedies. Workers' compensation provides a relatively simple administrative remedy to injured workers and, at the same time, bars most personal injury actions by the worker against the consumer.

With respect to other actors in the provision of services -- i.e., the state sponsoring agency, consultants, fiscal agents, public authorities (as in California), or consumer-directed provider agencies (as in New York) -- this analysis finds that their liability risk is limited to the specific tasks they perform, with minimal risk of vicarious liability for personal injury negligently caused by personal assistance workers. The risk of direct liability is also relatively very low because of each actor's limited functions. Thus, in general, delivering home care services through the Cash and Counseling model or a similar consumer-directed structure results in a relatively low level of liability risk where employer and support functions are "unbundled" in a clearly defined and communicated fashion.

Seeking to provide a broad taxonomy of all possible tort liability risks, this report identifies the following liability risks for each of the actors in consumer-directed care:

Worker's Liability Risk

Section II.A and Section II.C discuss the following liability risks for workers:

Consumer's Liability Risk

Section II.B and Section II.C discuss the following liability risks for consumers:

Authorized Representative's Liability Risk

Section II.D discusses the following liability risks for authorized representatives:

Fiscal Agent's Liability Risk

Because the role of the fiscal agent is limited (processing payroll records and issuing paychecks, and, in some cases, fiscal monitoring), the liability risks for fiscal agents are correspondingly quite limited. The report does not address the various contractual obligations to the state that the fiscal agent may incur. The report does analyze the following personal injury liability risks for fiscal agents in Section III:

Consultant's Liability Risk

In the Cash and Counseling model of CDPAS, consultants, rather than the state, are assigned the most critical program functions -- assisting the consumer in designating an authorized representative and developing the spending plan and the back-up plan; providing consultation with regard to hiring, training and supervising workers; and monitoring program quality and initiating action to correct problems. While the fact that the consultant's functions are so critical certainly creates a significant risk of liability, this risk is mitigated by the fact the consumer explicitly bears primary responsibility for decisions regarding development of the spending plan and the back-up plan and selection and supervision of a worker, including hiring/firing, training, and scheduling. This separation of responsibility should protect the consultant from being deemed vicariously liable for injury to consumers caused by workers or by deficiencies in the spending plan or back-up plan. The way the program defines the functions of the consultant (or case worker by any other name) is critical to the liability risk analysis, for liability risk follows function.

Consultants can effectively protect themselves against liability by: (1) being very clear in practice about staying within the bounds of consultation versus case management; (2) complying with program procedures and instructions carefully and executing all responsibilities conscientiously and with reasonable care; and (3) making it clear all times that it is the role of the consumer, not the consultant, to make decisions regarding the consumer's care.

Section IV discusses the following liability risks for consultants:

State's Liability Risk

In the Cash and Counseling model of CDPAS, the state's risk of liability for personal injury is greatly reduced. Most of the functions that were performed by the state or a provider agency in traditional Medicaid-funded home care services are now unbundled and performed by consumers (e.g., hiring and supervising workers), consultants (e.g., advising consumers and monitoring care), and fiscal agents (e.g., payroll services for workers). The core functions that continue to be performed by the state, such as enrolling consumers and responding to serious problems in connection with consumer care, carry some risk of liability, but if the state program is well structured and operated in accordance with that structure, this risk is minimal.

Section V discusses the following liability risks for states:

CDPAS programs can be structured in many ways, and it is beyond the scope of this report to identify and analyze the liability issues associated with each of the variations on CDPAS. However, Section VI of the report does address two well-established CDPAS programs, California's In-Home Supportive Services (IHSS) Program and New York's Consumer-Directed Personal Assistance Program (CDPAP). There are several significantly different liability issues that may arise in the California IHSS program:

The New York CDPAP program is structured around a provider agency, Concepts of Independence, Inc., that serves as the employer of record of the workers for purposes of employee payroll and benefits functions and for purposes of entering into a Medicaid provider agreement with the state. At the same time, the consumer retains responsibility for directing his or her care and services to substantially the same extent as is done in the Cash and Counseling model. Accordingly, the liability issues are substantially similar in the two models, except that all workers are mandatorily covered by workers' compensation through Concepts, the provider agency.

Section VII, Conclusions and Options to Address Liability Risk, reiterates the conclusions reached in Sections II through VI. This section also sets forth an array of steps CDPAS program administrators may want to consider to address the liability risks for each actor in consumer-directed care. The steps include:


  1. The reports that have been prepared to date for the Cash and Counseling Demonstration are available at the Demonstration's website, http://www.hhp.umd.edu/aging/CCdemo/products.html.

  2. Leslie Foster, et al., Does Consumer Direction Affect the Quality of Medicaid Personal Assistance in Arkansas? (2003). [http://aspe.hhs.gov/daltcp/reports/arqual.htm]

The Full Report is also available from the DALTCP website (http://aspe.hhs.gov/_/office_specific/daltcp.cfm) or directly at http://aspe.hhs.gov/daltcp/reports/cdliab.htm.