Medicaid Cash and Counseling Programs

First, “cash and counseling” is interchangeable with many other terms, including “consumer-directed care”, “self-directed services”, and “participant direction”. Furthermore, states may have more than one participant-directed Medicaid program and the name of the program(s) varies based on the state. Self-direction may be available via a state’s Regular Medicaid plan and / or through HCBS (home and community based services) Medicaid Waivers. Self-directed care is not available for persons residing in nursing home facilities.

Simply put, with participant direction, Medicaid recipients are given a monetary budget and have the freedom to direct their own long-term care services and supports. Most common, and most relevant, is the ability to choose, hire, train, and even fire, their own caregivers to assist with their Activities of Daily Living (bathing, dressing, mobility, toiletry, transferring, and eating). Often these caregivers also provide assistance with light housecleaning, shopping for groceries, preparing meals, chore services, transportation, and laundry.

It is generally a close friend or a relative, such as an adult child, that the Medicaid recipient hires to provide care. Some states even allow seniors to hire their spouse as their caregiver. Hiring the caregiver of a Medicaid recipient’s choosing is particularly beneficial when a friend or family member is already serving as an informal (unpaid) caregiver. Upon hiring a caregiver, the care recipient essentially becomes the employer. When a program participant is unable to make care decisions for themselves, a representative may be named to direct their care. The representative cannot also serve as the caregiver.

While the rules and regulations of self-directed care varies by the state, a general overview of how the program works follows.
-If not already a Medicaid recipient, one must apply for Medicaid in the state in which they live. Once approved for Medicaid, they must apply and meet the eligibility requirements to be a participant of a consumer-directed program.
-A thorough assessment is completed to determine the senior’s functional needs. This may include input from one’s informal caregiver and physician.
-A care plan is established, which includes the type of care and amount of care that is needed, and an individual budget is set.
-The Medicaid recipient is able to hire the caregiver of their choosing and / or purchase other supports as approved in the care plan. The caregiver may be required to have a background check, be registered and licensed as a care provider (personal care assistant), and / or undergo specific caregiver training. The amount a caregiver is paid varies based on the state and the consumer-directed program.

As mentioned above, with cash and counseling programs, the Medicaid recipient takes on the role of employer. This can include making caregiver payments and withholding taxes. Some states require that program participants utilize a financial management service company, also called a fiscal intermediary, to handle the financial responsibilities (i.e., issuing payment and withholding taxes). When a fiscal intermediary is used, a small fee for services is charged and comes out of the individualized budget. Stated differently, a portion of the budget that would otherwise be available to pay a caregiver goes towards paying the fiscal intermediary for their services.

Learn more about Medicaid financial assistance to provide care for a loved one. There are also non-Medicaid programs that offer consumer-directed care. These include two veterans’ pensions (Aid & Attendance and Housebound), the Veteran Directed Care program (previously called the Veteran-Directed Home and Community Based Services program), state programs, and nonprofit programs.