How to Become a CDS Provider

Note: All applicants seeking to obtain a contract must enroll in Texas Medicaid. Please visit the Texas Medicaid LTSS Provider Enrollment/Re-Enrollment website to view the enrollment requirements.

Medicaid Enrollment applications will not be processed until applicants complete the required training and pass a knowledge test at the end of the training.

Open Enrollment Process

The Texas Health and Human Services Commission accepts applications through its open enrollment process to become a contracted Financial Management Services Agency (FMSA). FMSAs deliver financial management services to people who participate in the Consumer Directed Services (CDS) option and who choose the FMSA as their financial management services provider. Under the open enrollment process, HHSC awards contracts on a noncompetitive basis to eligible FMSAs meeting the provider qualifications and other eligibility requirements.

FMSA applications can be submitted year-round with no deadline. FMSA applicants must complete the application packet and include all required documents in accordance with HHSC instructions before receiving an invitation to attend an HHSC enrollment training and pass a knowledge test.

What Does an FMSA Do?

FMSAs are the vendor fiscal/employer agents for people who hire their own employees for certain services, also called CDS employers. FMSAs provide payroll services as well as deposit and report withholding taxes on behalf CDS employers. FMSAs also assume tax liability for proper withholding of federal income taxes and federal unemployment tax in accordance with Section 3504 of the Internal Revenue Code. In addition, they must comply with state laws and regulations of the Texas Workforce Commission regarding payment of state unemployment insurance.

FMSAs do not deliver direct in-home or community-based services, such as attendant services.

Roles and Responsibilities

  • Providing a required initial face-to-face orientation for people when they first choose the CDS option.
  • Providing ongoing training, assistance and support for employer-related responsibilities.
  • Verifying qualifications of applicants before services are delivered.
  • Monitoring continued eligibility of service providers.
  • Approving and monitoring budgets for services delivered through the CDS option.
  • Ensuring that all service agreements are fully executed for each of the employer's service providers before issuing the initial payment for services to the service provider.
  • Managing payroll, including calculations of employee withholdings and employer contributions and depositing these funds with appropriate agencies. FMSAs are not allowed to use a payroll agent.
  • Complying with applicable government regulations concerning employee withholdings, garnishments, mandated withholdings and benefits.
  • Preparing and filing required tax forms and reports.
  • Paying allowable expenses incurred by the employer.
  • Providing status reports concerning the individual's budget, expenditures and compliance with CDS option requirements.
  • Responding to the employer or the employer's designated representative as soon as possible but at least within 2 working days after receipt of information requiring a response from the FMSA, unless indicated otherwise.

Note: Receiving an FMSA contract does not guarantee receiving referrals. All FMSAs are included on a choice list provided to people who have chosen the CDS option.

Required Training

Attendance is required for any person or organization that wants to contract to be an FMSA.

Financial management services are highly complex and technical services. These services require thorough understanding of and rigid compliance with federal laws and rules of the Internal Revenue Service relating to being a fiscal employer agent on behalf of individuals using certain programs. FMSAs must have a working knowledge of all home and community-based services provided by HHSC, as well as knowledge of principles of self-determination and person first language and practices.

Contract Requirements

Before applying for a contract, an applicant also must be able and willing to fulfill the requirements, outlined in Texas Administrative Code, Title 40, Part 1, Chapter 49, Contracting for Community Care Services.

FMSAs must pay for services first, then bill the state for reimbursement. Entities should have at least 2 months operating funds when they apply for a contract to become an FMSA.

HHSC conducts contract and fiscal compliance monitoring of FMSAs. View the contract monitoring tools.

Payment Rates

The FMSA must accept the designated fee established by the Health and Human Services Commission as payment in full for services delivered. To learn more about rate(s) for CDS services see the Texas Health and Human Services Commission, Rate Analysis Department website.

How to Contract to Provide Services

To be eligible to provide services and receive reimbursement for these services, a provider agency must meet certain eligibility criteria. Rules regarding program and contracting requirements can be found in Title 40 of the Texas Administrative Code as follows:

For more information about HHSC provider enrollment process and requirements, please visit the Contractor Enrollment Process & Requirements page.

An individual or entity must complete an application to provide Financial Management Services as a FMSA. Once you have met the minimum eligibility criteria, you may review the required application documents at:

The forms may be downloaded for completion. Completed forms and any additional required information should be mailed to:

Regular mail
Texas Health and Human Services
Contract Administration and Provider Monitoring - Waiver Program Enrollments
Mail Code W-359
P.O. Box 149030
Austin, TX 78714-9030

Overnight/Express delivery
Texas Health and Human Services
Contract Administration and Provider Monitoring - Waiver Program Enrollments
Mail Code W-359
701 West 51st St.
Austin, TX 78751

Should you have any questions regarding the enrollment process for these programs, contact the Contract Administration and Provider Monitoring - Waiver Program Enrollments at 512-438-3234 or by email at