Medicaid self-direction is the reason most family caregivers can get paid at all. It lets the person receiving care hire and direct their own caregiver, including a relative.

It goes by many names: consumer direction, CDPAP in New York, CDASS in Colorado, IRIS in Wisconsin, CFSS in Minnesota. The mechanics are the same everywhere, and understanding them is the key to getting paid. This guide explains how self-direction works, the federal rules behind it, and who can be hired.

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

What Self-Direction Is

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. CMS, the federal agency that runs Medicaid, describes self-direction as promoting "personal choice and control over the delivery of waiver and state plan services."

That control is what allows a family member to be hired and paid. Instead of an agency assigning a worker, the participant can choose their own daughter, sibling, friend, or, in some states, spouse.

The Two Kinds of Authority

CMS divides self-direction into two types of decision-making power. A program may offer one or both:

  • Employer authority. The participant recruits, hires, trains, supervises, and dismisses their 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, New York's CDPAP, and Oregon's Consumer-Employed Provider program are examples.
  • Budget authority. The participant receives an individual budget of Medicaid dollars and decides how to spend it across services, goods, and workers, within program rules. Iowa's Consumer Choices Option and New Mexico's Mi Via are examples.

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

The Federal Authorities Behind Self-Direction

States build their self-directed programs on top of one or more federal Medicaid authorities. You do not need to master these, but recognizing them helps you understand your state's program:

  • 1915(c) HCBS waivers are the most common vehicle; most state waivers offer a self-directed option.
  • 1915(j) Self-Directed Personal Assistance Services is a state plan option specifically for self-direction. Crucially, under 1915(j), a state may choose to allow paid legally liable relatives, such as parents or spouses.
  • 1915(k) Community First Choice (CFC) is a state plan entitlement (no waitlist) for attendant services, almost always self-directed.
  • 1915(i) HCBS and 1115 demonstrations are additional pathways some states use.

During the COVID-19 public health emergency, 33 states used Appendix K authority to let additional family members deliver paid services across 112 HCBS waivers. Some states made those flexibilities permanent; others let them expire.

Who Can Be Hired

This is where state rules diverge the most:

  • Non-spouse relatives and friends can be the paid worker in nearly every state's self-directed program.
  • Spouses can be paid in some states (Colorado, Wisconsin, Oregon's Spousal Pay Program, New Mexico's Mi Via, Alabama's Personal Choices, and others) and are barred in many others.
  • Parents of minor children are treated like spouses (as legally responsible individuals) and are often barred unless the state opted in under 1915(j).

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.

How Payroll Works: the FMS Agency

When you self-direct, you become an employer, but you do not have to run payroll yourself. A Financial Management Service (FMS) agency (sometimes called a fiscal intermediary or fiscal employer agent) handles payroll processing, tax withholding and reporting, and the employer paperwork on your behalf. You direct the work; the FMS handles the money.

Want help setting up self-directed care in your state? Chat with Brevy's care navigator for a personalized walkthrough based on your state's program and who you want to hire.

Frequently Asked Questions

They are the same thing. "Self-direction" is the term CMS uses; "consumer direction" and "participant direction" are common alternatives. All describe a model where the person receiving care chooses and directs their own workers, often including a family member.

It depends on your state. Whether a spouse (a legally responsible individual) can be paid is a state option. Some states allow it; many do not. Under the 1915(j) authority, states may choose to permit paid legally liable relatives. Check your state's guide for the specific rule.

Employer authority means you recruit, hire, train, and supervise your own workers. Budget authority means you control how the Medicaid dollars in an individual budget are spent. A program may offer one or both.

A Financial Management Service (FMS) agency, sometimes called a fiscal intermediary or fiscal employer agent, processes payroll, withholds and reports taxes, and handles employer paperwork. You direct the care; the FMS handles the money.

Community First Choice (CFC) is a Medicaid state plan option under section 1915(k) that funds self-directed attendant services. Because it is a state plan entitlement rather than a capped waiver, it has no enrollment waitlist for those who qualify.

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.

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Brevy Care Team

Expert eldercare guidance from Brevy's team of healthcare professionals and researchers.