5200, Consumer Directed Services

Revision 20-1; Effective March 16, 2020

5210 Overview

Revision 20-1; Effective March 16, 2020

Consumer Directed Services (CDS) allows a member or legally authorized representative (LAR) to hire and manage the people who provide services within the member’s current home and community-based program. The philosophy behind CDS is that people are the best judges of the type and level of assistance they may need and how that assistance should be delivered.

The CDS option was codified in Section 531.051 of the Government Code and expanded by the 79th Texas Legislature to provide more options for members to direct their long-term services and supports. The rules for the CDS option are found in Texas Administrative Code, Title 40, Chapter 41, and are applicable to the STAR Kids and Medically Dependent Children (MDCP) waiver programs.

CDS is a service delivery option in which a member or LAR becomes the CDS employer of record for certain services. The CDS employer recruits, hires, trains, and supervises service providers and directs the delivery of services available through the CDS option, described in 5212, STAR Kids Services Available Under the Consumer Directed Services Option. CDS employers are required to use a financial management services agency (FMSA), contracted with the managed care organization to provide financial management services (FMS). FMSAs conduct payroll and pay employer federal and state taxes on behalf of CDS employers, and provide orientation and ongoing support for members who choose the CDS option. FMSA roles and responsibilities are explained in more detail in 5233, FMSA Responsibilities.

A member or LAR may choose the CDS option if:

  • the member's program offers the CDS option;
  • one or more program services in the member's authorized service plan are available for delivery through the CDS option;
  • the member or LAR agrees to perform, or to appoint a designated representative (DR) to perform, the employer responsibilities required for participation in the CDS option;
  • the member or LAR selects an FMSA to provide FMS; and
  • the member or LAR has developed and received approval from the service planning team for each required service back-up plan.

If a member or LAR elects to participate in the CDS option, the member or LAR:

  • selects one FMSA to provide FMS;
  • with the assistance of the FMSA, budgets funds allocated in the member's authorized service plan for delivery through the CDS option; and
  • recruits, screens, hires, trains, manages and terminates service providers.

As the CDS employer, a member or LAR may appoint, in writing, a willing adult as the DR to assist in performing employer responsibilities.

5211 Consumer Directed Services Definitions

Revision 20-1; Effective March 16, 2020

The following words and terms, when used in reference to the Consumer Directed Services (CDS) option, have the following meanings.

Actively involved — Involvement with a member that the member's interdisciplinary team deems to be of a quality nature based on the following:

  • observed interactions of the person with the member;
  • a history of advocating for the best interests of the member;
  • knowledge and sensitivity to the member's preferences, values and beliefs;
  • ability to communicate with the member; and
  • availability to the member for assistance or support when needed.

Budget — A written projection of expenditures for each service delivered through the CDS option.

CDS employer — The member or LAR who chooses to participate in the CDS option and is responsible for hiring, training, managing and retaining service providers to deliver program services.

Designated representative (DR) — A willing adult appointed by the CDS employer to assist with or perform the employer's required responsibilities to the extent approved by the employer. The DR is not the CDS employer. The DR must be a volunteer and cannot be a paid service provider. The CDS employer is responsible for actions taken by the DR.

Employee — A person employed by the member or LAR through a service agreement to deliver program services and is paid an hourly wage for those services.

Employer support services — Services and items the CDS employer needs to perform employer and employment responsibilities, such as office equipment and supplies, support consultation, expenses related to recruiting employees, and other items approved in Texas Administrative Code, Title 40, Part 1, Chapter 41, §41.507, and the Consumer Directed Services Handbook, Appendix XI, Allowable and Non-Allowable Expenditure.

Financial Management Services (FMS) — Services delivered by the financial management service agency (FMSA) to the member or LAR, as described in 5233, FMSA Responsibilities. These services include orientation, training, support, assistance with and approval of budgets, and processing payroll and payables on behalf of the member or LAR.

Financial management services agency (FMSA) — An agency that contracts with a managed care organization (MCO) to provide FMS.

Legally authorized representative (LAR) — A person authorized or required by law to act on behalf of a member with regard to Consumer Directed Services, including a parent of a minor, guardian of a minor, managing conservator of a minor or the guardian of an adult.

Service back-up plan — A documented plan to ensure that critical program services delivered through the CDS option are provided to a member when normal service delivery is interrupted or there is an emergency.

Service Planning Team — A group of people who meet to discuss the member’s needs, which consists of the member or LAR, the service coordinator and any other person invited by the member or LAR.

Support Consultation — A service that provides skills training and assistance for performing employer-related responsibilities.

5212 Services Available in the CDS Option

Revision 20-2; Effective September 1, 2020

STAR Kids services available in the Consumer Directed Services (CDS) option are:

  • Community First Choice (CFC) Personal Assistance Services;
  • CFC Habilitation; and
  • Personal Care Services.

The Medically Dependent Children Program (MDCP) waiver services and supports currently available in the CDS option are:

  • Respite Services;
  • Flexible Family Support Services;
  • Supported Employment; and
  • Employment Assistance.

Beginning September 1, 2020, MDCP waiver services and supports available in the CDS option are:

  • Respite Services;
  • Flexible Family Support Services;
  • Adaptive Aids;
  • Minor Home Modifications;
  • Supported Employment; and
  • Employment Assistance.

A member or their legally authorized representative (LAR) may choose to self-direct any, or all, of the services that are available through the CDS option. The CDS option is available to members living in their own homes or the homes of family members.

Choosing the CDS option does not impact a member's eligibility for services. A member or LAR can choose to have the above services delivered through the service delivery option of their choice.

Financial management services (FMS) are required in the CDS option. FMS provide assistance to members to manage funds associated with services elected for self-direction and is provided by a financial management service agency (FMSA) contracted with the member’s managed care organization (MCO). This includes initial orientation and ongoing training related to CDS employer responsibilities, as well as assisting with and approving the CDS employer’s budget. The FMSA also conducts payroll and pays employer taxes on behalf of the CDS employer. A monthly administrative fee is authorized on the individual service plan and paid by the MCO to the FMSA for FMS.

If requested, an FMSA can provide support consultation, which includes additional training and support for the CDS employer related to their employer responsibilities, beyond the ongoing support provided by the FMSA.

5220 Advantages and Risks of the Consumer Directed Services Option

Revision 20-1; Effective March 16, 2020

The member or legally authorized representative (LAR) should be informed of and consider the advantages and risks associated with the Consumer Directed Services (CDS) option before choosing to enroll. To assist the member in making an informed choice, the managed care organization (MCO) service coordinator presents information about service delivery options to the member or LAR. Refer to 5221, Advantages of Consumer Directed Services (CDS) Service Delivery Option, below.

5221 Advantages of Consumer Directed Services (CDS) Service Delivery Option

Revision 20-1; Effective March 16, 2020

Below are some of the advantages of using the Consumer Directed Services (CDS) option. The member or legally authorized representative (LAR):

  • has more control over who provides services and the days and times the services are delivered;
  • can offer benefits, such as bonuses, overtime pay, pay raises, vacation pay, sick pay and insurance to direct service providers, using funds from the CDS budget and in consultation with the financial management services agency (FMSA);
  • can control the final rate of pay for service providers within allowable limits;
  • may hire eligible service providers, such as family members, friends and other persons they know, in compliance with program and CDS rules;
  • will train service providers and supervise the delivery of services;
  • can appoint an eligible person as a designated representative to assist with or perform CDS employer responsibilities; and
  • may use budgeted funds to hire a support advisor, if they need assistance beyond what the FMSA provides.

5222 Potential Risks Associated with the Consumer Directed Services Option

Revision 20-1; Effective March 16, 2020

Below are some of the member responsibilities and potential risks associated with the Consumer Directed Services (CDS) option. The member or legally authorized representative (LAR) is:

  • responsible for locating attendants, back-up attendants and other direct service providers since there is no home and community support services agency (HCSSA) provider to fall back on to provide services. The member or LAR may contract with an HCSSA that agrees to provide back-up services, but the HCSSA is not required to contract with the member or LAR;
  • the employer in the CDS option and, therefore, assumes all liability related to employment. The member or LAR retains control over recruiting, hiring, training, managing and terminating employees. The persons providing services are not the employees of the financial management service agency (FMSA), the managed care organization (MCO), any state or federal agency or other contracted provider agency. As the CDS employer, the member or LAR is solely responsible and liable for any negligent acts or omissions made by the employee, service providers and the designated representative;
  • responsible for handling all conflicts with service providers. The CDS employer can request support consultation services be added to their service plan and budget to provide training and assistance with this CDS employer responsibility, as necessary;
  • not able to decrease or increase the MCO authorized service hours by adjusting the employee’s hourly wage;
  • required to keep certain paperwork to be specified by the FMSA for a required period. The CDS employer must safely store the documentation for five years or longer;
  • ultimately responsible for payroll taxes owed to the Internal Revenue Service (IRS) and Texas Workforce Commission (TWC), and is liable if the FMSA fails to pay; and
  • responsible for meeting all state and federal requirements as an employer and can be held liable for failure to meet those requirements.

5230 Member and Financial Management Service Agency Responsibilities

Revision 20-1; Effective March 16, 2020

 

5231 Member Responsibilities

Revision 20-1; Effective March 16, 2020

The member or legally authorized representative (LAR) assumes responsibility as the CDS employer of record. The member or LAR is responsible for:

  • recruiting, hiring, training, managing and terminating direct service providers;
  • setting wages and benefits for direct service providers within funds allocated for services elected for delivery through the Consumer Directed Services (CDS) option;
  • following state and federal laws including the payment of overtime;
  • evaluating each service provider's job performance;
  • approving, signing and submitting time sheets, invoices and receipts to the financial management service agency (FMSA) for payment to direct service providers;
  • providing the FMSA with necessary information to register as the member’s agent with the Internal Revenue Service (IRS) and the Texas Workforce Commission (TWC);
  • having the FMSA verify eligibility of each applicant before hiring or retaining for employment or service delivery;
  • resolving employee and service provider concerns and complaints;
  • maintaining a personnel file on each service provider;
  • developing and implementing back-up service plans for services determined by the individual's planning team to be critical to the individual's health and welfare; and
  • ensuring protection of the individual receiving services and preserving evidence in the event of a Department of Family and Protective Services Adult Protective Services investigation of an allegation of abuse, neglect, or exploitation against a CDS employee, designated representative, FMSA representative or managed care organization service coordinator.

5232 Designated Representative

Revision 20-1; Effective March 16, 2020

The member or legally authorized representative (LAR) has the option to appoint a designated representative (DR) to assist with the responsibilities of being a CDS employer in the Consumer Directed Services (CDS) option. A CDS employer may appoint a willing adult as a DR to assist or to perform employer responsibilities. The employer maintains responsibility and accountability for decisions and actions taken by the DR. If the CDS employer chooses to appoint or change a DR, the CDS employer must complete Form 1720, Appointment of Designated Representative.

The person appointed as the DR by the member or LAR must:

  • be willing to serve as the member's or LAR's DR for participation in the CDS option;
  • be or become actively involved with the member; and
  • complete the self-assessment in Form 1582, Consumer Directed Services Responsibilities, and any assessment required by the member's program.

A DR must not:

  • sign or represent themselves as the CDS employer;
  • be paid to perform CDS employer responsibilities;
  • be an employee of the CDS employer;
  • have a spouse employed by the CDS employer; or
  • provide a program service to the member.

The CDS employer must notify the financial management services agency (FMSA) by fax or telephone within two business days after the appointment or change of a DR.

  • If the CDS employer notifies the FMSA by telephone, the CDS employer must fax or mail a copy of Form 1720 to the FMSA within five business days after the appointment or change of a DR.

If a CDS employer decides to revoke the appointment of a DR, the CDS employer must:

  • complete Form 1721, Revocation of Appointment of Designated Representative; and
  • provide a copy of the completed form to the FMSA within two days after the effective date of the revocation.

Based on documentation provided by the FMSA of a CDS employer's inability to meet CDS employer responsibilities, the person-centered service planning team may recommend that the employer designate a DR to assist with or to perform CDS employer responsibilities.

5233 FMSA Responsibilities

Revision 20-1; Effective March 16, 2020

A financial management services agency (FMSA) must provide financial management services (FMS) to a Consumer Directed Services (CDS) employer or designated representative (DR), including:

  • orienting and training the CDS employer or DR about CDS employer responsibilities for the CDS option, including legal requirements of various governmental agencies;
  • assisting with and approving budgets for each service to be delivered through CDS;
  • with the CDS employer, completing forms required to obtain an employer identification number (EIN) from federal and state agencies;
  • conducting criminal history checks and registry checks of applicants;
  • verifying each applicant's eligibility with program requirements, including Medicaid fraud exclusions, before an applicant is employed or retained by the CDS employer;
  • registering as the employer-agent with the Internal Revenue Service (IRS) and assuming full liability for filing reports;
  • paying employer taxes, on the CDS employer's behalf, to the IRS and Texas Workforce Commission;
  • receiving and processing employee time sheets, computing and paying all federal and state employment-related taxes and withholdings, and distributing payroll at least twice a month;
  • receiving and processing invoices and receipts for payment;
  • maintaining records of all expenses and the reimbursement and monitor budget;
  • submitting claims to the member's managed care organization (MCO);
  • providing written summaries and budgeting balances of payroll and other expenses at least quarterly;
  • preparing and filing employer-related tax and withholding forms and reports (this does not include filing personal income tax returns for employees); and
  • providing ongoing training and assistance, as needed or requested.

The FMSA must obtain employer-agent status, as defined by IRS Rev. Proc., 2013-39, and perform all responsibilities as required by the IRS, Texas Workforce Commission other appropriate government agencies. The FMSA enters into service agreements with each of the member's direct service providers before issuing payment.

An FMSA may not provide financial management services (FMS) and case management services to the same member.

The FMSA must participate in all mandatory training provided or authorized by the Texas Health and Human Services Commission.

The MCO must monitor the FMSA’s performance and must ensure the FMSA performs all FMSA responsibilities, including participation in mandatory training.

5240 Member Choice in the Consumer Directed Services Option

Revision 20-1; Effective March 16, 2020

Information about the Consumer Directed Services (CDS) option is presented to the STAR Kids member by the managed care organization (MCO) service coordinator at all initial and annual planning meetings or at any time requested by the member. The MCO service coordinator should provide written and verbal information about the benefits and requirements of the CDS option. The member chooses which services will be delivered through the CDS option and which will be delivered through the agency or service responsibility option.

5241 Presentation of the CDS Option

Revision 20-1; Effective March 16, 2020

At the time of a member’s enrollment in STAR Kids or the Medically Dependent Children Program (MDCP), and at least annually thereafter, the managed care organization (MCO) service coordinator or another person designated by the member's program must:

  • provide written materials on the CDS option to the member or legally authorized representative (LAR);
  • meet with and provide the member or LAR with a verbal explanation of the CDS option specific to the member's program;
  • present or make available to the member, the Texas Health and Human Services Commission (HHSC) video, The Consumer Directed Services Option, which can be accessed by visiting https://hhs.texas.gov/cds; and
  • complete Form 1581, Consumer Directed Services (CDS) Option Overview.

A member or LAR may request that an MCO service coordinator provide additional verbal and written information to the member or LAR regarding the CDS option or assist with enrollment in the CDS option at any time. The MCO service coordinator must comply within five business days after receipt of the request.

A member or LAR declining participation in the CDS option may at any time elect to participate in the CDS option while receiving services through STAR Kids or MDCP.

The MCO service coordinator is responsible for presenting the CDS option annually to all new applicants and ongoing members who are not enrolled in the CDS option and whenever information is requested. The MCO service coordinator:

  • shares an overview of the benefits and responsibilities of the CDS option by reviewing Form 1581;
  • provides a copy of Form 1581 to the applicant or member or legally authorized representative (LAR); and
  • informs the applicant or member of the right to choose service delivery through the CDS option, the agency option or the service responsibility option (SRO).

For initial applications, the MCO service coordinator obtains the applicant's signature on Form 1581 at the initial contact. The MCO service coordinator signs and dates the form verifying the information was presented to the applicant. A copy of Form 1581 is placed in the case record to document that CDS information was shared.

For annual redeterminations, the MCO service coordinator provides the member or LAR with a copy of Form 1581 and clearly documents in the case record that Form 1581 was shared with the member.

When members or LARs request information about the CDS option at other times, the MCO service coordinator must provide CDS information to the member within five business days after receipt of the request. The MCO service coordinator may provide the information by making a home visit or contacting the member or LAR by telephone. If a home visit is not made, the MCO service coordinator obtains the member's or LAR’s signature by mailing Form 1581 to the member with a postage-paid return envelope. The MCO service coordinator signs and dates Form 1581 indicating the information was presented. A copy of Form 1581 is placed in the member's case record to document Form 1581 was shared.

The MCO service coordinator must discuss the CDS option, as well as differences in service delivery and payment options, and allow the member or LAR the opportunity to choose between delivery of services through the agency option or the CDS option.

If the member or LAR is interested in participating in the CDS option once the information on Form 1581 is shared, the MCO service coordinator reviews Form 1582, Consumer Directed Services Responsibilities. The MCO service coordinator:

  • reviews with the member or LAR the responsibilities, risks and advantages of the CDS option;
  • assists the member or LAR, as needed, in completing the member self-assessment on Page 4 of Form 1582;
  • records the member's or LAR's choice to participate in the CDS option, and appoints a designated representative (DR), if needed, or records the choice not to participate in the CDS option;
  • assists the member or LAR in selecting and appointing the DR, or their choice not to participate;
  • obtains the DR's dated signature if the member or LAR chooses to appoint a DR; and
  • signs and dates Form 1582.

If a member or LAR (the CDS employer) is not able to complete the Consumer Self-Assessment, a person appointed by the CDS employer to be the employer's DR must be able to complete the Consumer Self-Assessment for the member receiving services to participate in the CDS option.

If a CDS employer would like to use a DR, the financial management services agency (FMSA) assists the CDS employer in appointing a DR after the FMSA has been selected.

Refer to 5232, Designated Representative, for procedures related to a member appointing a DR.

5250 Declining the CDS Option

Revision 20-1; Effective March 16, 2020

If the member or legally authorized representative (LAR) declines or is not ready to select the Consumer Directed Services (CDS) option at any point after reviewing Form 1581, Consumer Directed Services (CDS) Option Overview, the managed care organization (MCO) service coordinator:

  • obtains the applicant's, member's or LAR's signature on Form 1584, Consumer Participation Choice, indicating his or her selection of service delivery option; and
  • signs and dates Form 1584.

The MCO service coordinator must ensure the member understands the CDS option is always available and that the individual may call the service coordinator to request a change to the CDS option at any time.

Form 1584 is signed by the member when a different service delivery option is chosen.