Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. 1. State Plan Coverage of Personal Care


Under §1905(a)(24) of the Social Security Act, a state has the option to cover personal care services under its Medicaid State Plan. (See Chapter 1 and Chapter 7 for more information about this authority.) Thirty-two states cover personal care under their Medicaid State Plans.21 When personal care is covered under the Medicaid State Plan, it must be provided to all Medicaid participants who require such services. Because Personal Care is an optional State Plan benefit, a state may impose limitations on the amount, frequency, and duration of the services that it provides to eligible participants.

Participant Direction of Personal Care

In 1997, CMS issued revised guidance concerning the provision of personal care under the Medicaid State Plan.22 In this guidance, CMS confirmed that states have the option to use a participant direction model, where “the Medicaid beneficiary may hire their own provider, train the provider according to their personal preferences, supervise and direct the provision of the personal care services and, if necessary, fire the provider.” States may also permit family members or others specified in the service plan to direct the provider on behalf of the individual receiving the services.

Many states that cover personal care under the Medicaid State Plan authorize participant-directed services.23 In some states (e.g., Maine and Massachusetts), third-party entities (often Independent Living Centers) facilitate participant direction by performing payroll and related employment functions on behalf of program participants (hereafter, called participants) who select and manage their workers. Elsewhere (e.g., California and Michigan), the state itself or its claims payment contractor performs payroll and tax-filing functions as the participant’s employer-agent.

There are two main limitations concerning the extent to which participant direction can be used in conjunction with the delivery of personal care under the Medicaid State Plan.

  • When personal care is covered under §1905(a)(24), the budget authority may not be used and personal care dollars may not be redirected or cashed out (i.e., converted to a budget) to purchase other types of goods and services. Medicaid dollars may only be used to pay for the provision of personal care.

  • Legally responsible relatives (i.e., parents of minor children and spouses) may not be paid to provide personal care. However, other relatives (at a state’s option) can be paid to provide personal care.

TABLE 7-1. Participant Direction Features of the Optional Medicaid Authorities
Features §1905(a)(24)
State Plan
  Personal Care  
§1915(c) Home
  and Community-  
Based Services
§1915(i) State
  Plan Home and  
Based Services
  §1915(j) Self-  
Employer Authority Allowed Allowed Allowed Required
Budget Authority Not allowed Allowed Allowed Required
Cash Payments to Participants Not allowed Not Allowed Not allowed Allowed
Direction by Representative Allowed Allowed Allowed Allowed
Hiring of Legally Responsible Individuals Not allowed Allowed Allowed Allowed
Information & Assistance Not required Required Required Required
Financial Management Services Fiscal employer agent services only are required Required Required Required, except for those receiving the cash option
Limitation on services that can be directed Not applicable; personal care is the sole service Allowed Allowed Not allowed
Availability of Non-Traditional Goods and Services Not allowed Allowed Allowed Allowed
Comparability Cannot be waived Can be waived Can be waived Can be waived
Statewideness Cannot be waived Can be waived Cannot be waived Can be waived
Availability of Non-Participant-Directed Services Not required Required Not Required Required24

These limitations may be overcome when a state elects to furnish participant-directed personal care under provision §1915(j) of the Social Security Act (described below).

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