Medicaid Self-Direction & Consumer-Directed Services (2026)

If you have been trying to work out how a relative could be paid to care for your mom or dad, the tangle of program names alone is enough to stop most families cold. Underneath many of them sits one model: Medicaid self-direction, which lets the person receiving care, or their representative, recruit, hire, and supervise their own workers. Whether one of those workers can be a paid relative depends on which Medicaid program carries the service and, in many programs, on a choice your state makes.1

It goes by many names: participant direction, consumer direction, CDPAP in New York, CDASS in Colorado, IRIS in Wisconsin, CFSS in Minnesota. The federal framework underneath is shared, while each state sets its own rules, and understanding both is what gets you paid. This guide explains how self-direction works, the federal rules behind it, who can be hired, and how to get started.

The details vary by state, so always check your state's guide for the specific program and rules.

How Medicaid Self-Direction Lets You Choose Your Caregiver

Most people picture Medicaid home care as an agency sending a stranger to the house on the agency's schedule. Self-direction flips that. Under a self-directed (or consumer-directed) model, the person receiving care, or their chosen representative, decides who provides their care and how. Federal regulation, written for the 1915(j) option, defines self-direction as the opportunity for participants or their representatives to exercise choice and control over the budget, planning, and purchase of their services, including the amount, duration, scope, provider, and location.1

That control is what can let a family member be hired and paid, in the states that allow it. Instead of an agency assigning a worker, you, or your loved one, pick the worker yourselves, within your state's rules on who may be paid.

The Two Kinds of Authority: Employer and Budget

The control self-direction hands over falls into two groups, often called employer authority and budget authority. Under the 1915(j) option, it includes at a minimum recruiting, hiring, training, scheduling, supervising, and discharging workers, and determining the amount paid for a service and reviewing and approving invoices:1

• Employer authority. You recruit, hire, train, supervise, and dismiss your own workers, functioning as the common-law employer (or co-employer with a support agency). This is the authority that lets you put a specific relative on payroll. Colorado's CDASS and New York's CDPAP are examples.
• Budget authority. You receive an individual budget of Medicaid dollars and decide how to spend it across services, goods, and workers, within program rules. New Mexico's Mi Via is an example.

Many programs combine the two: you both hire your own worker and manage a budget.

Which Federal Rules Power Medicaid Self-Direction?

States build their self-directed programs on top of federal Medicaid authorities, and CMS names four that can carry self-directed services. You do not need to master these, but recognizing them helps you understand your state's program:1

• 1915(c) Home and Community-Based Services (HCBS) waivers can carry self-directed services.
• Section 1915(j) Self-Directed Personal Assistance Services is a state plan option specifically for self-direction. Under 1915(j), a state may choose to allow paid legally liable relatives: a spouse, the parent or guardian of a minor child, or a legally-assigned caretaker relative.
• 1915(k) Community First Choice (CFC) is a state plan option for attendant services. A state that elects it must offer it statewide, but it remains an optional benefit, and the state may limit the amount, duration, and scope of services.
• 1915(i) HCBS state plan option is another authority CMS names for self-directed services.1

Can a Family Member Be Your Paid Caregiver?

This is where state rules diverge the most, and where the stakes get personal. If your family relies on a spouse or an adult child as the primary caregiver, whether your state's rules line up with your situation can decide whether that care is paid work or an unpaid sacrifice.

• Any family member. Self-direction by itself doesn't guarantee that a relative can be the paid caregiver; the answer differs by program. Under 1915(j), a state may permit paying a relative, and a state may decline to. Under Community First Choice's self-directed model with a service budget, the person may hire family members who meet the qualifications they set, including any added training, but a state can choose to offer Community First Choice only through agencies, and CMS has said it can't make agencies employ a person's family members.1
• Spouses and other legally liable relatives. Section 1915(j) lets a state permit a participant to hire any capable individual, including legally liable relatives: a spouse, the parent or guardian of a minor child, or a legally-assigned caretaker relative. It is the state's choice, not a federal guarantee.1
• The representative. If the participant appoints a representative to direct services under 1915(j), or has one under Community First Choice, that representative can't also be the paid worker; CMS has said this avoids a conflict of interest, such as someone approving their own pay or timesheets. Both bars are written against the representative role, not against relatives as a class, so a relative who isn't serving as the representative can still be hired in a 1915(j) program whose state pays relatives, or under Community First Choice's self-directed model with a service budget. If the relative is also your parent's court-appointed guardian, see whether a guardian can be paid to care for a parent.1

Because this varies so much, the only reliable answer is your state's guide. See How to Get Paid as a Family Caregiver and pick your state.

Who Handles Taxes and Payroll?

Becoming an employer sounds daunting, especially on top of everything else you are already managing. Here is the relief: you do not run payroll yourself. A Financial Management Service (FMS) agency, sometimes called a fiscal intermediary or fiscal employer agent, does that. Under Community First Choice, states must make financial management available to everyone with a service budget, and it collects and processes timesheets, runs payroll, withholds, files, and pays employment taxes and insurance, tracks each person's budget, and pays invoices for services in the plan. You direct the work; the FMS handles the money. For how that pay is treated at tax time, see whether Medicaid waiver payments are taxable.1

How Do You Get Started with Self-Direction?

You do not apply for "self-direction" on its own. It is an option inside your state's Medicaid home care programs, so the path runs through them. Here is the usual sequence:

If you are not sure where your state's program lives, start at the federal level. CMS lists self-directed services at medicaid.gov, or call the Eldercare Locator at 1-800-677-1116, Monday through Friday, 8 a.m. to 9 p.m. ET. It is a free, nationwide service of the Administration for Community Living that connects older adults, families, and caregivers to services in their community, including their local Area Agency on Aging and information about paying for care.2

Learn More

Find personalized help setting up self-directed care at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.