What is allowable in Self-Direction?
(Adapted from the OPWDD Self-Direction Guidance for Providers, 3/10/2022)
What is Self-Direction?
Self-Determination is the philosophy that all people have the freedom to develop their own life plan. Self-Direction is based on the underlying principles of self-determination, person-centered planning and practices.
Self-Direction is the practice of empowering people with developmental disabilities to manage the supports and services they receive, determine who provides the supports, and how and where they are provided. In Self-Direction the person with developmental disabilities chooses the mix of supports and services that work best for them, how and when they are provided, and the staff and/or organizations that provide them.
The Self-Direction participant accepts responsibility for co-management of their supports and services. The amount of responsibility varies depending on the level of authority the participant chooses to exercise.
SELF-DIRECTION AUTHORITIES
Employer Authority
The person hires, schedules and supervises the staff who support them. They determine the activities that will be supported and the way that support will be provided. Services are provided to the person by agency staff under a coemployment model. In a co-employment model, the person can choose to hire staff, train staff regarding their interests, monitor and provide feedback to staff,
and end staff services if they are not consistent with the person’s expectations. If a person chooses to self-hire their staff, they gain Budget Authority and determine the compensation of those staff.
Budget Authority
The person who is self-directing with Budget Authority must work within a Personal Resource Account (PRA) and develop a Self-Direction Budget. The person makes choices about the goods and services he/she wishes to receive and selects who is paid to provide them or how they are purchased. A person who maintains Budget Authority and works within a PRA may access needed goods or services through Individual Directed Goods and Services (IDGS). A Fiscal Intermediary (FI) works with the person to complete billing and payment for goods and services identified in the Budget. Attachment C includes a description of services that must be included in a person’s Self-Direction Budget. A person who chooses to have Budget Authority can receive and budget for services that are Agency Supported, Self-Hired, or Direct Provider Purchased.
STAFF OPTIONS IN SELF-DIRECTION
A person who chooses Self-Direction has three options for selecting the staff who will work with them:
1. Agency Supported Self-Directed Services
The person and agency have a Memorandum of Understanding (MOU) that describes the person’s authority to hire staff, train staff regarding their interests, monitor and provide feedback to staff, and end the employee’s services if they are not consistent with the person’s expectations. The person does not have the authority to set the staff salary in this model and the provider is paid at the provider’s rate for the service, which includes the administrative and clinical components of the service. The provider bills eMedNY directly for these services. If a person chooses to have only Agency Supported Self-Directed Services, a Self-Direction Budget and Personal Resource Account are not needed.
Community Habilitation, Supported Employment (SEMP) and Respite can be self-directed by the participant using Employer Authority in the Agency Supported Self-Directed Services model.
2. Self-Hired Staffing
The person who is self-directing determines the compensation of the staff who delivers services to them. Services must be planned for and budgeted within a Personal Resource Account (PRA). A Fiscal Intermediary (FI) works with the person to implement Human Resource (HR) activities and to complete billing and payment of the services. The person and the FI have a Memorandum of Understanding (MOU) that describes the person’s authority to hire staff, train staff regarding their interests, monitor and provide feedback to staff, and end the employee’s services if they are not consistent with the person’s expectations. The amount that is billed to eMedNY for self-hired Community Habilitation, Supported Employment and Respite cannot exceed the amount a provider would be paid for the same service or the OPWDD established rates for the service, whichever applies.
A person can choose to self-hire staff to deliver the following types of Home and Community Based Services (HCBS) waiver services: Community Habilitation, Supported Employment, and Respite.
3. Direct Provider Purchased Services
A person who is self-directing can choose to purchase some services directly from a provider agency. For these Direct Provider Purchased services, the person does not have the authority to set the staff salary and the person chooses to let the provider manage the staff. The provider is paid at the provider’s rate for the service, which includes the administrative and clinical components of the service. The provider bills eMedNY directly for these services. If a person is self-directing other services with budget authority, the agency that provides the Direct Provider Purchased Service is responsible for ensuring that the service is utilized within the PRA, as identified in the Self-Direction Budget. This needs to be addressed during the planning process and reflected in the Budget accordingly.
Supported Employment, Community Habilitation, and Respite may be Direct Provider Purchased, Self-Hired, or Agency Supported. Group Day Habilitation Services, Prevocational Services and Pathway to Employment are available only as Direct Provider Purchased Services.
SUPPORT BROKERAGE
When a person chooses to take on Budget Authority, Support Brokerage services support the person-centered planning process by assisting the person to develop a Circle of Support and complete a Self-Direction Budget for his/her services. The Broker may also provide training and support to the person to help him/her gain the skills and competencies he/she needs to manage self-directed services. If a participant has chosen self-hired Community Habilitation or Supported Employment services, Support Brokerage Services include completing and updating Staff Action plans for these services.
A person’s Support Broker cannot provide them any other HCBS waiver service, and cannot be the person’s Care Manager (CM). A Care Manager will assist the person participating in Self-Direction, as Self-Direction is part of the HCBS waiver.
Support Brokerage services must be established based on an agreement between the participant and the Broker. Hourly fees are negotiated between the participant and the Broker and should be commensurate with the level of training and experience of the Broker. The maximum fee that can be considered for delivering Support Broker services is $40 per hour. Self-Direction participants and Brokers can agree to a fee that is less than this amount. The hourly fees reflected on the Support Broker Agreement and the Self-Direction Budget must be the same.
The participant and his/her Circle of Support make decisions about the best use of the Support Broker as a resource within the person’s Self-Direction Budget to ensure appropriate support and achievement of valued outcomes.
FISCAL INTERMEDIARY
Fiscal Intermediary Services (FI Services) are HCBS Waiver services that include tasks performed by a Fiscal Intermediary (FI) which support a participant who self directs an individualized budget. Such tasks include billing and payment of approved goods and services, fiscal accounting and reporting, Medicaid and corporate compliance, and general administrative supports. The FI performs the initial review of the budgets/budget amendments, is the employer of record for staff hired by the participant, and is responsible for ensuring that applicable labor laws (including those related to minimum wage and overtime) are followed. These staff are referred to as “self-hired staff.”
Services that Require a Fiscal Intermediary
A participant must choose an FI to handle billing for any of the following services:
- Individual Directed Goods and Services (IDGS)
- Live-in Caregiver (LIC)
- Support Brokerage Services
- Community Transition Services (CTS)
- Other Than Personal Services (OTPS)
- Housing Subsidy
- Any self-hired staff for Community Habilitation (CH), Supported Employment (SEMP), and/or Respite
INDIVIDUAL DIRECTED GOODS AND SERVICES (IDGS)
Participants who choose to self-direct their services and take on Budget Authority may receive IDGS as a waiver service. Individual Directed Goods and Services (IDGS) are services, equipment or supplies not otherwise provided through OPWDD’s HCBS waiver or through the Medicaid State Plan that address an identified need in a participant’s service plan. Self-Direction funds cannot be used to purchase an IDGS service that is available under the State Plan. Total IDGS expenditures are limited to $32,000 annually or the person’s PRA, whichever is less. Further detail is included in the IDGS Definitions Chart (https://opwdd.ny.gov/system/files/documents/2022/05/addendum-a-4-idgs-chart_050622.pdf).
Participants may manage their IDGS, as described in their Individualized Service Plan and Self-Direction Budget, to fully purchase or contribute towards the purchase of items or services which meet all of the following criteria:
In addition to these requirements, the IDGS chart lists additional criteria that must be met for specific categories of IDGS.
LIVE-IN CAREGIVER
Live-in Caregiver is an HCBS Waiver service that utilizes an unrelated care provider who resides in the same household as the waiver participant and provides as-needed supports to address the participant's physical, social, or emotional needs so that the participant can live safely and successfully in his or her own home.
The Live-in Caregiver must not be related to the participant by blood or marriage to any degree.
The Live-in Caregiver must go through any required background check(s) performed by the FI before they can begin services.
Community Classes
Self-directed supports through IDGS offer great opportunities for people with developmental disabilities to purchase community based classes that teach a subject, are open to the public, and result in active engagement and participation in integrated community settings.
Each of the following are excluded from being funded with the IDGS as a Community Class:
- Classes that duplicate any Medicaid State Plan or HCBS Waiver service or are conducted by an entity that delivers such services;
- Classes where participation is restricted solely to people with intellectual/developmental disabilities (I/DD);
- Classes where there are not established published fees;
- Classes that are credit bearing for matriculating students;
- Classes in a setting accessed only by people with I/DD (not including paid staff support), including all certified settings; and
- Classes that do not adhere to the standards identified in the broader IDGS rules and standards (e.g. experimental therapies).
Participation in specialized classes that take special needs, such as physical limitations or beginner level learning, into consideration are appropriate as long as those specialized classes are open to the broader public.
Private classes and lessons are allowable as long as they relate to an integration goal and the lessons are not taking place privately for the purpose of segregating the participant.
Transportation
When a person needs transportation to/from a service-related activity, IDGS can be used to reimburse service related mileage, or pay for public transportation. In order to be reimbursable under IDGS, however, transportation costs and mileage must be related to a Medicaid reimbursable service within the Self-Direction Budget. Additionally, Transportation in IDGS is only available for those services that do not have transportation built into the fee and/or are not covered by the State Plan. Transportation related to IDGS services or those delivered by Self-Hired staff would be considered allowable reimbursable costs.
Camp
For a person who has Budget Authority, Camp programs may be funded using IDGS. Reimbursement from Medicaid is not available until after a person has attended the camp. When a camp deposit or prepayment is made, but the person never attends camp, no service has been rendered to the person and, therefore, no reimbursement may be claimed from Medicaid. Medicaid does not reimburse services that are not rendered. If the FI or the family made a non-refundable deposit or prepayment, whoever made the payment to the camp accepted the financial risk.
When a camp deposit or prepayment is made, and the person arrives at camp, participates in some programs, but leaves camp early, then the terms of the camp’s policy should be consulted. If there is opportunity to request a partial refund, such refund should be requested. If there is a strict no-refund policy, the full cost of the service term may be submitted to Medicaid as long as it does not exceed one month. The maximum service term Medicaid reimburses is one month. Since most camps have terms measured in weeks, it is unlikely that the FI (or family) would be left with an unreimbursed liability. However, if a participant were to enroll at a camp that demanded prepayment for a full three-month summer term (i.e., June, July, and August), it is possible that an unreimbursed liability could be generated. The FI would be forced to break up the camp term into units no greater than a month. Some service must be delivered in a given month in order to bill a service unit for that month. Therefore, if a camper were to leave in the second week of June and not return, the FI (or family) could be left with an unreimbursed liability for two-thirds of the total cost of the camp.
IDGS Camp Reimbursement is available for Camps that are not funded as Medicaid Waiver Respite Camps. Self-Direction participants can choose to attend Waiver Respite funded Camps. However, those camps must be included in their Self-Direction Budget as Direct Provider Purchased Respite.
IDGS funds may not be used for camps that are outside New York State, as these camps are not issued a permit by New York State.
Paid Neighbor
The Paid Neighbor stipend is paid to a neighbor to serve as an “on-call” support. A Paid Neighbor is someone who should be available to respond when needed. Proximity in relation to the needs of the participant should be considered when hiring a Paid Neighbor, and be based upon the participant’s likely need for a particular response time. In no case should a Paid Neighbor live with the participant nor should a Paid Neighbor be more than 30 minutes from the participant.
The Paid Neighbor cannot be a “family member” of the Self-Direction participant.
Staffing Support
Staffing Support cannot deliver services that would duplicate FI services or Broker responsibilities as related to development of the SD plan. The staffing support role can only include tasks in the spectrum of, “Assistance with scheduling self-hired staff and with assisting the person to complete staffing related paperwork.”
The person who provides Self-Directed Staffing Support through IDGS may be someone who provides self-hired CH, Respite or SEMP services to that participant or other participants, however, they cannot be otherwise employed by a not for profit agency. The billing must reflect what service is being provided. The documentation and time tracked should reflect what service the staff is providing at the time, either Community Habilitation/Respite/SEMP or Staffing Support.
Health Club/Organizational Memberships
Funding for a gym or health club may be reimbursed through IDGS in the self-directed plan for reasons of health and fitness or community integration. A person may have multiple memberships to health clubs. Memberships are for the individual only. Family or staff memberships cannot be reimbursed with IDGS funding. The club/organization must offer open enrollment to the public and the reimbursed fee must be the same as the published membership duties/fees.
A Self-Direction Participant’s activity fees, expenses (such as related supplies) and meals are explicitly prohibited from IDGS funding.
OTHER THAN PERSONAL SERVICES (OTPS)
People who are self-directing their services with Budget Authority may elect to use up to $3,000 in 100% state funding for items that are not Medicaid-fundable. This budget category is called “Other Than Personal Services” or OTPS.
For any item or service to be approved for OTPS funding in any category, it must pass ALL of the following four tests:
Other resources (including community based and Medicaid funded) must be explored and exhausted prior to utilizing state OTPS funds for the purchase of such items. For example, cell phones are often made available to people who have Social Security eligibility.
OTPS Categories
The OTPS section of the budget is limited to the following categories of supports:
- Phone service – cell and/or land line*
- Internet* (in instances where a participant has a cable package, OTPS can be used for phone and internet only, but not the cable portion)
- Software related to the person’s disability
- Staff activity fees ( self-hired staff only) to cover meals, admissions, fees, transportation or other costs incurred by staff when providing support to the self-directing person in activities that support a valued outcome
- Staff advertising/recruitment costs
- Cost associated with staff time for planning or training meetings where such costs exceed the hourly limits of the service
- Personal Use Transportation
- Clothing* (capped at $250)
- Board Stipend* (must first request and be denied for food stamps, or approved, but not sufficient to cover needs)
- Utilities*
- Other goods and services that increase independence
- Other goods and services related to health and safety
* In general, landline, internet, clothing, utilities, and board stipend expenses are not reimbursable in OTPS for children under 18 years old where parents are responsible for these costs. Exceptions may be granted by the Developmental Disability Regional Office (DDRO) in cases where justification for a specific need is established (e.g., the family would not otherwise have internet in the home but it is necessary to support a technology system utilized by the FI and self-hired staff).
Items Excluded From OTPS
OTPS cannot be used to pay for certain excluded items. Excluded items include, but are not limited to:
- Medical visit co-pays
- Any expenses related to hospitalization or nursing home stays (including staff or respite supports or family expenses)
- Any illegal item or activity
- Cable television
- Common household supplies (e.g., paper towels, wipes, soap)
- Treatments that are experimental in nature
- Repairs, like a broken step or railing, as they should be covered under the lease or are the responsibility of the home owner
- A self-directing person’s activity fees or related supplies for an activity or community class, even if funded through Individual Directed Goods and Services
- Rental cars (this OTPS exclusion does not apply to vehicles leased in the participant’s name)
- Vehicle purchases, payments towards a purchased vehicle
- Legal fees
- OTPS cannot be used to apply against housing costs in excess of housing subsidies. If a person’s rent is in excess of allowable housing subsidies, this will have to be reimbursed with the person’s or the family’s own resources.
SUPPORTED EMPLOYMENT, COMMUNITY HABILITATION AND RESPITE
The services described in this chapter can be varied in the way in which they are self-directed. Supported Employment includes both direct and indirect activities associated with helping a person get a job and gain skills necessary to retain the job. Community Habilitation is a service delivered in the community (i.e., non‐certified settings) to facilitate inclusion, integration, and relationship building. Respite is a service that provides relief to unpaid caregivers who are responsible for the primary care and support of a person with a developmental disability. The methodology for budgeting these services depends on the authorities and staffing options chosen by the participant. Other rules and considerations for these services can be found in the respective ADMs.
Direct Provider Purchased and Agency Supported
If a person has a Self-Direction Budget and chooses to receive Direct Provider Purchased or Agency Supported Community Habilitation, Supported Employment and/or Respite services, the cost of those services are included in the Self-Direction Budget and deducted from the person’s PRA.
Self-hired Staff
A person can use self-hired staff to provide Supported Employment, Community Habilitation and/or Respite with a Self-Directed Budget.
Centers for Medicare and Medicaid Services (CMS) is very clear that within SelfDirection, a person can hire their own staff to deliver services but the payment cannot exceed the rate a provider would be paid for the service. Hence:
A person can have self-hired staff persons but payment to the self-hired staff persons (including all allowable costs that comprise the total employment cost) cannot exceed the provider rate that would be paid to an agency providing the same service.
Hiring Family Members
There are specific restrictions regarding self-hired staff who are related to a Self-Direction participant. Except where specifically prohibited (e.g., relatives cannot be hired to deliver Live-In Caregiver or Paid Neighbor services), relatives may be paid as service providers as long as all of the five following criteria are met:
- They are at least 18 years of age.
- They are not the parents, legal guardians, spouses, or adult children (including sons and daughters-in-law) of the participant.
- The service is a function not ordinarily performed by a family member.
- The service is necessary and authorized and would otherwise be provided by another qualified provider of waiver services.
- The relative does not reside in the same residence as the participant.
FAMILY REIMBURSED RESPITE
In addition to, or in lieu of, Respite that is Direct Provider Purchased, Agency Supported, and Self-Hired, participants in Self-Direction can include Family Reimbursed Respite (FRR) in their budgets. FRR is paid for with 100% State funds and capped at $3,000 annually.
FRINGE BENEFIT BUDGETING AND BILLING OVERVIEW
Part 3 provides guidance on claiming self-hired services to Medicaid. Topics discussed include distinctions between work hours and billable hours and between wage rates and reimbursement rates, types of self-hired staff, accounting for indirect costs associated with self-hired employees, and issues related to the processing logic in Medicaid for self-hired services.
Terms
Understanding the distinctions between these terms is essential to ensure correct budgeting and claiming for self-hired services.
Work Hours
The actual hours worked by the employee. Per federal and state labor law, employees must be paid for all hours they are "suffered or permitted to work."
Wage Rate
The standard rate of pay per hour worked as negotiated by the participant/family and the self-hired employee. Nonstandard wage rates may apply in special circumstances (e.g., "overtime" pay).
Billable Hours
The subset of work hours spent by the employee on billable service activities, as described and defined in OPWDD regulation and administrative memoranda.
Indirect Employment Cost
Expenses of employment other than wage costs, including the employer-paid portions of employee benefits, payroll taxes, etc.
Total Employment Cost
Employee wages for hours worked plus indirect expenses related to the employment of the self-hired worker.
Effective Reimbursement Rate
Total employment costs for the service period claimed divided by the billable service hours delivered and documented during the same service period.
Types of Self-Hired Staff Employees
The participant and the FI share responsibilities as "co-employer" of self-hired employees. FIs should permit the participant broad leeway to negotiate the wage rates of self-hired staff, within the reimbursement restrictions described in Chapter 16. Because the FI is the legal "employer of record," benefit packages and other terms of employment typically must follow the FI's policies. In these cases, the participant may not be able to negotiate further. Nearly all true employees drive indirect costs in addition to their wage payments. These indirect costs, in addition to the direct wage costs, must be appropriately accounted and included in the fee billed to Medicaid.
Self-hired staff who perform Community Habilitation, Respite, and Supported Employment services must be employees of the participant and Fiscal Intermediary due to the nature of the work performed by such staff.
Contractors
Staff members who perform services at a negotiated payment per hour of service rendered as outlined in a formal service contract. Some examples of a self-hired contractor are a clinician, consultant and therapist. Self-hired contractors may be self-employed (i.e., an "independent contractor") or may be the formal employees of a staffing agency. In either case, the legal relationship between the participant and the self-hired contractor is "purchaser-contractor," not "employer-employee." The negotiated service rate is considered "payment-in-full" for services rendered and there are no indirect costs to be reimbursed. There are no fringe or indirect costs related to these services when self-hired as a contractor.
GUIDANCE ON OVERNIGHT SUPPORTS
People may need supports during the overnight hours when they spend some or most of the time sleeping. These supports could include monitoring for events that will require hands-on assistance or ongoing activities, such as developing the person’s skills or tending to the person’s safety. If nighttime supports are needed the following services should be considered when developing the Self-Direction Budget.
Paid Neighbor
Funded via IDGS. A Paid Neighbor can be available to the person so that, if the person has a need, the Paid Neighbor can respond and provide the appropriate support. A Paid Neighbor provides as-needed support. See the IDGS chart for Paid Neighbor specifics.
Personal Care
Funded via State Plan Medicaid. If the need for support relates to the provision of personal care, it may be appropriate to obtain supports from a personal care assistant through a community-based program where those supports are delivered. This does not count against the PRA.
Respite
If a participant lives in a setting with an unpaid support giver, respite may be an appropriate option for overnight supports.
Community Habilitation
The Community Habilitation (CH) service requires that a face-to-face service be delivered during the course of the continuous time period where the service is provided. A review of the hours that the CH staff person works should be part of service planning to determine and clarify the service expectations.
CH is a means of support for people attempting to live as independently as possible. A portion of the CH service includes implementing person-specific safeguards that are foundational to ensuring a person’s health and safety. There is no one-size-fits-all approach in determining if CH is an appropriate service during overnight hours. Each situation needs to be considered during a person-centered planning process and the specific needs to the participant considered.
Many people need supports during the night to ensure their safety, but do not need direct observation during sleep hours. These people may need available support staff who can provide direct service if a specific need arises during the night. A Community Staff Action Plan can include the identification of indirect service time for a portion of the CH service that is integral to the overall plan, but is not delivered in a face-to-face manner.
Components of indirect service time for the CH service can include:
- Staff training time (hours worked to attend training)
- Planning time (hours worked as part of person-centered planning team/Circle of Support)
- Documentation time (time spent completing pertinent and required notes and service documentation)
- Staff coordination and scheduling
- On-call time (hours spent on site by staff who are “available as needed” to implement the Staff Action Plan)
- Asleep overnight staff
The following parameters must be met if asleep overnight staff time is built into the indirect cost:
- The total hourly cost cannot exceed the regional rate for CH;
- There are enough billable hours to ensure that indirect costs cover sleep time;
- The CH plan provides justification that asleep staff are able to provide adequate oversight to the participant;
- CH staff who are also Live-In Caregivers or Paid Neighbors for the person must not be paid for time spent asleep or in "on-call" status.
Under no circumstances does asleep staff support count as billable CH service time.
Indirect service time must be documented as indirect service time in support of the CH service, and must be tracked and paid as hours worked. However, indirect service time cannot be billed as CH service hours. The indirect service time is paid as part of the rate provided to agencies for the CH service, or as a component of the self-hired staff wage established by the participant or designee.
Self-Direction Budget Types
A person who chooses Self-Direction can choose from three different budget types, depending on what services they need. The budget types are Residential Only (RES), Other Than Residential (OTR) and Both. The chart below outlines the services available within each budget type. Note that some services may not be available depending on the setting where a person lives.
| Residential Only (RES) | Other Than Residential (OTR) | Both | |
| Support Broker | X | X | X |
| Live in Caregiver | X | X | |
| Individualized Goods and Services (IDGS) | X | X | X |
| Other Than Personal Services (OTPS) | X | X | X |
| Community Habiliation | X | X | X |
| Support Employment (SEMP) | X | X | |
| Respite | X | X | |
| Group Day Habilitation | X | X | |
| Family Supports and Services (FSS) | X | X | X |
| Provocational Services | X | X | |
| Pathway to Employment | X | X | |
| Housing Subsity | X | X | |
| Family Reimbursed Respite (FRR) | X | X | |
| Available to People Who Live in a Certified Setting | X | ||
| Available to People Who Do Not Live in a Certified Setting | X | X | X |
Clinician and Certain Therapy Services
Clinical Consultation
To ensure continuity of care, a Self-Direction participant may augment the hourly rate paid to a consulting clinician with 100% state funds. This is allowed when the participant’s CSS budget (prior to 10/1/14) included the consulting clinician’s services, and the hourly rate paid to the consulting clinician exceeds the hourly rate paid through IDGS. OPWDD will evaluate the timeframe that this continuity of care provision will be allowed.
Clinician - Direct Service provision
No use of state funds is allowed.
Therapies
To ensure continuity of care, a Self-Direction participant may augment with 100% state funds the hourly rate paid for Hippotherapy, Therapeutic Riding, Aquatic Therapy, Art Therapy, Massage Therapy, Music Therapy, and Play Therapy. This is allowed when the person’s CSS budget (prior to 10/1/14) included the therapy, and the hourly rate paid to the consulting clinician exceeds the hourly rate paid through IDGS. OPWDD will evaluate the timeframe that this continuity of care provision will be allowed.
Created 04/02/26.