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What Is Consumer-Directed Care?

What is Consumer-Directed Care?

Consumer-directed care is one of the terms for programs designed to let elderly and disabled people choose their own paid caregiver. The idea is that they will usually choose a family member or close personal friend. Importantly, these programs are often funded through Medicaid. Medicaid sometimes refers to it as “self-directed services.” Resultantly, the person receiving care would usually need to qualify for Medicaid – which is a government-maintained health insurance for non-wealthy people. Additionally, not everyone with Medicaid will qualify. Rules will vary between states, but, generally, the person receiving care must be dependent in a certain number of activities of daily living.

What Are the Advantages of Consumer-Directed Care?

Medicaid offers patients the ability to hire caregivers and coordinate Medicaid-authorized services through consumer directed services. With consumer directed services, the home health agency facilitates payroll, taxes, and benefits, but the patients recruit, hire, train, supervise, and schedule caregivers. This includes the ability to hire a friend or relative.

Consumer Directed Services Options

Each Medicaid funding authority has different guidelines, but all authorities share some of the same common characteristics.

  • Person-centered planning process: CMS requires that a person-centered planning process and assessment be used to develop a person-centered plan. The process is directed by the individual, with assistance as needed or desired from a representative of the individual’s choosing. The planning process must also include planning for contingencies, such as when a needed service is not provided due to a worker being out sick.

  • Service plan: A service plan is a written document that specifies the services and supports that are to be furnished to meet the preferences, choices, abilities, and needs of the individual, and that assist the individual to direct those services and supports and remain in the community.

  • Individualized budget: An individualized budget is the amount of funds that is under the control and direction of the individual. The budget plan is developed using a person-centered planning process and is individually tailored in accordance with the individual’s needs and preferences as established in the service plan.
  • Information and assistance in support of self-direction: States are required to provide or arrange for the provision of a system of supports that is responsive to an individual’s needs and desires for assistance in developing the person-centered service plan and budget plan, managing the individual’s services and workers, and performing the responsibilities of an employer. The amount and frequency with which an individual uses the available supports varies by person and circumstance.

In Summary

There are differences from program to program. Each program may have different funding mechanisms and amounts, as well as different pay rates and benefit packages. Who is and isn’t eligible to use the services differs from state to state. Participants must be Medicaid eligible, require personal care or private-duty nursing services, be self-directing or have a designated representative, and be willing to take control of their care and their personal assistance staff.  

How large or small a role a home health care agency plays will vary depending on local regulations and priorities. Some will strictly perform payroll duties, while others also offer advice and tools to make recruitment and management easier for consumers.


  1. Batavia AI. Consumer direction, consumer choice, and the future of long-term care. Journal of Disability Policy Studies. 2002 Sep;13(2):67-74.
  2. Self-Directed Services. Available online from: