The sections below describe in detail the legal authorities that permit incorporation of participant direction into the delivery of Medicaid HCBS. While each authority has unique elements, certain basic features of participant direction cut across the authorities. These features are described next.
Individual Election of Participant Direction. The various authorities have different requirements regarding the provision of alternatives to participant direction.
When a state offers participant direction through an HCBS waiver program, it must provide that participants may opt into or out of directing their services, that is, a state must offer a provider-managed service delivery option alongside the participant direction option and ensure there are no service breaks during transition periods.
Participant direction programs operated under the State Plan Personal Care benefit are not required to use a particular service delivery model or to offer more than one service delivery model; nor are they required to specify policies for voluntary or involuntary transition from participant-directed services to other types of service delivery, such as agency-provided services.
If a state chooses to use the §1915(j) authority to permit self-direction of State Plan personal care services, it must ensure that participants may opt into or out of directing their services and that a traditional service delivery option is available. Because traditional service delivery models vary, they are not specified here. If a state uses the §1915(j) authority in conjunction with the HCBS waiver authority, the requirements of the latter authority must be met.
Under §1915(i), CMS requires states to have policies to facilitate voluntary or involuntary transitions from participant-directed services to non-participant-directed service delivery models.
Participant-Led Service Planning Process. Another important feature is positioning the participant (or a personally-selected personal representative) to lead the person-centered service planning process. This includes giving participants the authority to select who participates in the process (e.g., family members and friends), and ensuring that participants service plans reflect their preferences and goals. Participants are expected to have the authority to select their services and supports, in addition to exercising free choice of provider, a long-standing right under Federal Medicaid law.14
Managing Workers. All of the pertinent Medicaid authorities allow participants to select, hire, supervise, and manage their workers--called the Employer Authority. Under this authority, a state may recognize Medicaid participants (or their representatives) as the legal (common law) employers of their workers and provide for the use of Fiscal/Employer Agents (F/EAs) to pay workers and file payroll taxes on their behalf. A state also may elect to use a co-employer model whereby an organization serves as the primaryor legal employer of participant-hired workers, while the individual or their representative serves as the secondaryor managing employer.15 This co-employer model is commonly referred to as the Agency with Choice model.
Individual Authority Over Service Delivery. Participant direction of Medicaid services and supports also allows participants to determine how and when services are delivered. This includes specifying the elements of services that will be delivered (within the approved scope of the service(s) that the state offers), scheduling the delivery of services, and establishing any additional special qualifications for the workers or agencies that provide services.16
Individual Budget. Under the §1915(c) and §1915(j) authorities, participants may be provided an individual budget that includes some or all of their service and support funding and the ability to exercise decision-making authority and management responsibility to purchase goods and services authorized in the service plan--called the Budget Authority.17 Participants, with the aid of counselors (i.e., information and assistance providers) and the financial management services entity, assume responsibility for managing their individual budgets.
Supports for Participant Direction. The §1915(c) and §1915(j) authorities specifically require states to provide certain key supports to participants who direct their services: financial management services and information and assistance. The proposed rule for the §1915(i) authority also addresses the provision of these two support services. However, its requirements are not included here because at the time of publication, the rule had not yet been finalized.
Financial management services. These services include performing financial transactions on behalf of participants (e.g., paying workers that participants employ, deducting payroll taxes, and under the §1915(c) and §1915(j) authorities, facilitating the purchase of other goods and services) along with tracking expenditures against the individual budget.
Information and assistance in directing services and supports. Medicaid funding is available to reimburse the costs of personalized assistance to participants in directing their services. Such assistance may include (a) counseling participants about available services and supports, (b) helping them to acquire the skills to create and manage the individual budget and to manage their individually employed workers, (c) assisting them in locating workers and services, and (d) accessing other benefits and community resources. States use various terms for this type of assistance, including counseling, supports brokerage, supports coordination, or consulting.
Safeguards. Finally, states are expected to provide safeguards on behalf of participants who direct their services. These include ensuring that services are not interrupted when an individual elects to transition from participant direction to provider-managed services, guarding against the premature depletion of the individual budget, and ensuring that participants have an individualized backup plan to handle breakdowns in service delivery.
Under the applicable authorities, states have considerable latitude in how they implement each of these participant direction features.