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A Guide to Self-Direction – and What’s Driving its Growth

A Guide to Self-Direction – and What’s Driving its Growth

MollieMurphy - Co-Founder, Annkissam

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Given the serious risks of congregate living during a viral pandemic, people are eager to get the long-term care they need in the safety of their homes. Self-direction offers a compelling solution to this pressing problem. Let’s talk about what self-direction is, its benefits, and why we expect this innovative model to continue growing well beyond the pandemic.

What is Self-Direction?

Self-direction (also referred to as consumer direction or participant direction) is a long-term care service delivery model that broadens individual choice and control. It represents a fundamental change in the way people access Medicaid services and supports, shifting decision-making power from providers or government agencies to the program participant.

Depending on the program, self-directing participants can have employer and/or budget authority over their care. Employer authority allows participants to hire, manage, and fire the individuals who provide their services, while budget authority gives them control over how their budget is spent on services and supports.

What are the Benefits of Self-Direction?

Self-direction offers significant benefits to participants if they’re willing and able to take on more responsibility.

  • Independence – Self-direction enables participants to keep living in their own homes and accessing local support systems as opposed to institutional care. It might also be an option for individuals within residential facilities to move back home.
  • Choice – Rather than having a homecare worker assigned by an agency, participants can select a paid caregiver themselves, which can even include a family member or friend.
  • Control – Participants decide how to allocate their budget.  While budget expenditures must be for Medicaid approved goods or services and must typically increase independence, budgets can be used for items and services beyond just paying caregivers. Some participants increase their independence by installing a ramp in their home, or by purchasing a microwave to be able to independently prepare meals, instead of relying on caregivers.
  • Access – The ability to hire friends or family members is especially important in rural areas where homecare workers and agencies are limited. COVID-19 has exacerbated this shortage, which we will touch on later in this article.
  • Cost-Effectiveness – Self-directing participants can strategically use their budget to gain the most benefit. For example, they may choose to use their budget to purchase an item for a one-time cost that allows them to use fewer hours of homecare labor ongoing.

While there are many advantages to self-direction, a person choosing self-direction must believe it’s the right fit for them. Remaining at home might not be a long-term care option for some people. In addition, some participants might not want the level of responsibility required – particularly related to being an employer. While many safeguards and supports exist to make self-direction accessible to many, it is not the right fit for everyone.

How Do States Administer Self-Directed Services?

States have several options to offer self-directed Medicaid services:

  • Home and Community-Based Services State Plan Option – 1915(i)
  • Community First Choice – 1915(k)
  • Self-Directed Personal Assistance Services State Plan Option – 1915(j)
  • Home and Community-Based Services Waiver Programs – 1915(c)
  • Demonstration Waivers – 1115

There are different guidelines for each Medicaid funding option, including which populations can self-direct care and which services can be self-directed. However, the Centers for Medicare & Medicaid Services (CMS) has several overarching requirements:

  • Person-Centered Planning Process – The individual participant must direct the process with assistance as requested from representatives of the individual’s choosing. The process should identify the strengths, capacities, preferences, needs, and desired measurable outcomes of the individual.
  • Service Plan – There must be a written service plan that specifies the services and supports required to meet the preferences, choices, abilities, and needs of the individual as well as a plan for contingencies.
  • Individualized Budget – States must describe the method for calculating the dollar values of individual budgets based on reliable costs and service utilization, define a process for adjusting the budget when changes in the participant’s service plan occur, and define a procedure to evaluate expenditures.
  • Support Broker — A support broker (also called a counselor, consultant or service coordinator) is a type of Information & Assistance that can be available to each individual who elects the self-direction option. This person supports the individual in directing their services, and maximizing their success in the program. The counselor will assist with whatever is needed to identify potential personnel requirements, resources to meet those requirements, and the services and supports to sustain individuals as they direct their own care.
  • Financial Management Services (FMS) – This function is required by CMS and that supports both the participant and the payer. FMS helps individuals hire employees in compliance with rules and regulations, acts as powerful fraud detection and control, supports documentation requirements, and performs payroll and other administrative duties. The FMS function also supports payers to enforce the parameters and rules of the program.
  • Quality Assurance – Each state Medicaid agency must have a system of continuous quality assurance and improvement. The system must include activities of discovery, remediation, and quality improvement.

What’s Driving the Immediate Growth of Self-Direction?

Self-direction emerged out of the Civil Rights Movements of the 1960s and gained additional traction through the 90s and early 2000s, increasing in major adoption through the last decade. With a history of growth over the last 20 years, COVID-19 accelerated this trend dramatically. Data from Annkissam (creators of the      leading self-direction platform acquired by HHAeXchange), showed a 20% increase in self-directed services for the first nine months of 2020, compared to 7.5% in prior years.

Since the pandemic began, CMS has been encouraging states to expand or adopt self-direction in its Appendix K: Emergency Preparedness and Response Instructions for 1915(c) waivers. Self-directed services are especially useful during this time for three primary reasons:

  1. Limits COVID-19 exposure – Individuals can hire family or other household members to provide services, limiting exposure to those within the same residence. Agency-based workers are more likely to serve multiple households, increasing the risk of exposure to themselves and others.
  2. Addresses worker limitations – Individuals can hire from a broader pool of potential workers. This flexibility is critical due to direct care worker shortages and closures of community and day programs.
  3. Allows for purchases to meet emergency needs – A self-direction budget gives the individual flexibility in meeting unanticipated expenses, such as meal delivery and medical equipment.

A case study in New Hampshire from June 2020 demonstrates how effective self-directed services can be in preventing COVID-19 infections. Granite State Independent Living (GSIL) provides in-home services and supports for seniors who are self-directing in New Hampshire’s Personal Care Attendant (PCA) State Plan. Of those 80 years old and nursing home eligible, there have been no deaths attributed to COVID-19. In contrast, long-term care facilities in New Hampshire have been hit hard by the coronavirus – data showed 82% of COVID-19 deaths were linked to these facilities.

But the question is – will this growth in self-direction decline after the pandemic?

The Future of Self-Direction

We expect to see self-direction playing a larger role in the delivery of Home and Community-Based Services (HCBS) well beyond the pandemic for numerous reasons.

  • Maintaining and Growing New Enrollees – For the individuals who enrolled in self-directed services during the pandemic, many are finding it’s a good fit. They may have chosen the plan out of necessity, but quickly recognized the benefits once it was in place. We expect these participants will continue using self-directed services, and this will lead to more word-of-mouth referrals over time.
  • Movement Away from Facility-Based Care – Even before COVID-19, states had been working for decades to shift away from facility-based care as the default option. Now, after seeing the tragic impact of this virus on residential group settings, there is a greater urgency to encourage home and community-based alternatives.
  • Growth in Consumer Empowerment – Underlying the steady growth of self-direction is the principle of consumer empowerment. Individuals now expect to be active participants in their own health care. This is especially true of baby boomers, who are redefining what it means to be an older adult in our society. As this large segment of the population ages, there will be a steady interest in self-direction.
  • State Medicaid Budget Shortfalls – Experts project state budget shortfalls to total $555 billion through fiscal year 2022. To avoid cuts as much as possible, Medicaid agencies will be looking to innovative models like self-direction to better manage costs while maintaining quality care.

What’s Next

The scene is set for self-direction to grow. How can HCBS providers prepare?

To be successful, HCBS providers must collaborate closely with participants. It’s also critical to stay compliant with both CMS and individual state policies. Providers need integrated technology that will:

  • Manage participant enrollment, progress, and key steps
  • Create and approve participant budgets quickly and efficiently
  • Adjudicate care worker time and other expenses to individual budgets and program rules
  • Onboard employees
  • Support efficient and accurate Medicaid claiming
  • Enable participants and their families real-time access to key information about their services
  • Prepare for audits and readiness reviews

If your organization wants to build or expand a self-directed program, Annkissam (an HHAeXchange company) provides robust software for HCBS providers, helping people who are aging or have disabilities thrive in their homes and communities. Annkissam’s software supports over 80 programs of all sizes and models, across 40 states and counting.

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