Self-direction (consumer-directed care)
Self-direction (also called consumer-directed or participant-directed care) is a Medicaid service model in which the participant, or their representative, has decision-making authority over certain services and manages them with help from a system of supports (Medicaid.gov). Medicaid.gov describes it as an alternative to services delivered and managed by an agency. The federal rule for the 1915(j) self-directed personal assistance option defines it as the chance to exercise choice and control over the budget, planning and purchase of services, including the amount, duration, scope, provider and location (42 CFR 441.450).
Why it matters
Medicaid.gov describes 2 kinds of control: employer authority (recruiting, hiring, training and supervising workers) and budget authority (deciding how the Medicaid funds in a budget are spent). States can offer it in state plan personal care, 1915(c) waivers, section 1115 demonstrations, 1915(i), 1915(j) and 1915(k) Community First Choice.
Financial management services (FMS) must be available to participants with budget authority. The FMS provider collects timesheets, runs payroll, withholds and files taxes and issues the worker’s pay. Participants can do some of these tasks themselves, but Medicaid.gov says they typically prefer the FMS to do them.
In the agency model, by contrast, an agency employs, schedules and supervises the caregiver and bills Medicaid or a managed care plan.
Example: a man with a spinal cord injury self-directs his care. He interviews and hires 2 attendants, sets their schedules and signs their timesheets, and an FMS pays them.
Related: how waiver payments reach the caregiver, Medicaid waiver payments and taxes, HCBS, 1915(c) waiver.