CDS Option Employer Manual: Chapter 1 - Overview of the CDS Option

What is the CDS Option?

This manual is designed to help people who choose to use the Consumer Directed Services (CDS) option manage their services. If you choose the CDS option, you will:

  • find, screen, hire and if necessary, fire your employees;
  • train and supervise your employees; and
  • set the pay and benefits you will offer employees within the limits established by the state.

But you will not be alone in all this. One of your first decisions will be to pick a Financial Management Services Agency (FMSA). This agency will act as your bookkeeper and banker, taking care of payroll and the government forms on behalf of the CDS employer. The agency works with you on your budget, but does not control it. Your FMSA works for you. You decide how the money in your service plan is spent on salary and benefits for your employee(s) within the guidelines established by the CDS option rules (see Appendix A for rules). Neither your financial eligibility for services nor your personal income tax liability will be changed by participation in the CDS option.

You also have the right to name a designated representative (DR) to assist you with the employer duties. The DR is not your employee, and is not paid; a DR is a willing adult you choose to provide you with help when you need it. You decide which employer tasks your DR will help you with or conduct.

Some programs with the CDS option also allow you to budget for and pay a Support Advisor. This person helps you or your DR (if you wish) with training and advice when you need it.

Depending on your program, you will have a service planning team (SPT). This is a group of people, including you or your representative, who work together to develop your service plan.

Some things do not change. You will remain in the program that provides you with your services. Find your program in the table on the following page to see what services are available to you through the CDS option.

Programs that offer the CDS Option
Program Services that can be self-directed through the CDS option
Community Living Assistance and Support Services (CLASS) In-home and out-of-home respite services, habilitation services, nursing, physical therapy, occupational therapy, speech, hearing and language services, cognitive rehabilitation therapy, employment assistance, supported employment and support consultation
Deaf Blind with Multiple Disabilities (DBMD) Respite services, residential habilitation (less than 24 hours), intervener, support consultation, supported employment and employment assistance
Medically Dependent Children Program (MDCP) Respite services and flexible family support services delivered by an attendant or a nurse, employment assistance, supported employment
Primary Home Care (PHC) Personal assistance services and support consultation
Community Attendant Services (CAS) Personal assistance services and support consultation
Family Care (FC) Personal assistance services and support consultation
Consumer Managed Personal Assistance Services (CMPAS) Personal assistance services
Home and Community Based Services (HCS) Respite, supported home living, nursing, cognitive rehabilitation therapy and support consultation, supported employment and employment assistance
Texas Home Living (TxHmL) All services and support consultation
Community First Choice (CFC) Habilitation and personal assistance services
STAR+PLUS Waiver Respite services, personal assistance services, nursing, therapies (occupational, physical and speech-language), supported employment, employment assistance, and cognitive rehabilitation therapy.
STAR+PLUS Personal assistance services
Personal Care Services (PCS) Personal assistance services

You can find the rules for the CDS option in the Texas Administrative Code, Chapter 41. It is the responsibility of the FMSA to give you these rules. The rules tell you who can be an employer in CDS, what you as a CDS employer must do, what your chosen FMSA will do for you, what your case manager or service coordinator will do for you, and what a Support Advisor can do to help if you choose to have one. See Form 1735, Service Provision Requirements Addendum to learn about requirements for your specific program.

Remember that CDS is about having more control over how services are delivered. You and your case manager or service coordinator will still follow the rules that apply for your individual program. These rules will tell you who can be hired, how to develop a service plan, what costs are allowed and your spending limits in different areas.

Roles and Responsibilities Under the CDS Option

As the CDS employer, you will need to understand both the CDS rules and the service provider qualifications, training requirements and documentation requirements for your specific program.

The CDS option is a partnership. You work with others so you can have more control and choice with your services.

This partnership consists of:

  • The employer — either you or your legally authorized representative
  • Your Designated Representative, if you have one
  • The FMSA
  • A Support Advisor (optional, and not available in all programs)
  • A case manager or service coordinator
  • A Service Planning Team

The most important partner is you, the employer.

In the CDS option, the employer will either be:

  • The individual receiving services through a Medicaid or state funded program who is at least 18 years old and does NOT have a court appointed guardian; or

  • The legally authorized representative, who is the parent of a minor, guardian of a minor, managing conservator of a minor, or the guardian of an adult. If the person receiving services — regardless of age — has a court-appointed legal guardian, then the legal guardian will be the employer.

Any of these employers may choose a DR to help. This is a voluntary, unpaid role, and the DR, if not a family member, must pass a criminal background check just like any employee you might hire. The DR can take on as much or as little of the employer's responsibilities as the employer wishes.

What Do You, the Employer, or Your DR Do?

The employer or DR must:

  • Choose an FMSA and participate in a CDS orientation.

  • Write and put in place a service backup plan for each critical service as identified by the Service Planning Team.

  • Obtain permission for a criminal history and registry check from potential employees and request that your FMSA conduct criminal history checks and other required registry checks for people you may hire or use for services.

  • Find, hire, train, manage, and fire employees and other service providers.

  • Set wages and benefits for employees within funds allocated for services delivered through the CDS option.

  • Train your employees when they first start working for you on your specific needs-the tasks to be accomplished, how you would like them conducted.

  • Ensure employees get any additional required training.

  • Document the initial training you provide your employees and any on-going training and send this information to your FMSA.

  • Make sure any professionals you hire, if your program allows, have a current valid license.

  • Keep track of how funds for each service are spent on wages and benefits for employees.

  • Decide how well your employees do their job.

  • Send completed time sheets, service delivery invoices or receipts for payment for employer-related expenses to your FMSA.

  • Keep records of service delivery, including service logs, and personnel files.

  • Resolve employee and service provider concerns and complaints.

  • Complete and put in place a plan to correct problems, if asked.

  • Follow Form 1735, Service Provision Requirements Addendum, for your specific program and service plan.

  • Hire a Support Advisor (if you want to use one and if a Support Advisor is a part of your program). Click here for more information on Support Advisors.

What Does the FMSA Do?

The FMSA will help plan the budget for your services, handle payroll and make payments to your employees. Your FMSA is your employer agent, which is the Internal Revenue Service (IRS) name for a FMSA. The FMSA will not have access to any of your personal IRS or tax information.

The FMSA will:

  • Register as your employer-agent with the IRS and Texas Workforce Commission (TWC).

  • Help, as needed, with your budget and approve the budget before services can begin.

  • Conduct criminal background and registry checks.

  • Verify potential employee credentials, such as a cardiopulmonary resuscitation (CPR) certification.

  • Verify that nurses or other professional have a valid Texas license.

  • Pay your employees.

  • Pay and report employer taxes on your behalf.

  • Collect and process invoices and receipts for payment.

  • Keep records of all expenses and reimbursements.

  • Provide written summaries and budget balances of payroll and other expenses, and note any areas of non-compliance with the CDS rules, at least quarterly to the employer and case manager or service coordinator.

  • May request a corrective action plan from you if you are not following the CDS rules or Form 1735, Service Provision Requirements Addendum for your program.

  • Must report suspected cases of Medicaid fraud.

What Does the Support Advisor Do?

In some programs, support consultation is a service you or your Service Planning Team may choose. This service is provided by a Support Advisor who has been trained to help you meet your responsibilities under the CDS option. Support Advisors do not duplicate services provided by the case manager or the FMSA, and are paid out of your budget. How much help the Support Advisor will give and for how long will depend on your needs.

The Support Advisor may help you to:

  • Find and hire workers.

  • Fill out forms needed to hire a worker, retain a contractor or vendor, and manage service providers.

  • Work out service agreements, including wages, hours and costs.

  • Build your skills as an employer, including effective communication, decision making, and problem solving.

  • Find information, resources and other help.

  • Talk to other partners, such as the case manager or service coordinator or your FMSA.

  • Be more involved in service planning team meetings at your request.

  • Help you meet the rules in the CDS option and your service plan.

If you have requested support consultation, talk to your FMSA about how to include this service in your budget. Your FMSA will also provide you a list of Support Advisors to choose from.

What Does the Case Manager or Service Coordinator Do?

Even though you have chosen CDS, your case manager or service coordinator remains the person you go to for changes in your service plan.

Your case manager or service coordinator will:

  • Check in with you to see how things are going.

  • Be available to you for any discussion or needs regarding your service plan.

  • Talk to your FMSA about any changes in service plans or need for corrections.

  • Approve service backup plans.

  • Complete any paperwork needed to change your plan.

What Does the Service Planning Team Do?

The Service Planning Team is a group of people who meet to talk about your needs. The employer — either you or your DR — is a member of the Service Planning Team. In the CDS option, the Service Planning Team will:

  • Decide what services you will get.

  • Decide when services will start and end.

  • Write the service plan (the service plan may also be called the Individual Plan of Care, Individual Service Plan or the Person Directed Plan).

  • Decide with you what critical services are needed in the backup plan.

  • Work on and approve corrective action plans if problems arise.

  • Approve switching from the CDS option, when necessary.

It's Your Choice

Participation in the CDS option is your choice. You are free to return to the traditional agency for delivery of services at any time. If you want to switch, you will need to contact your case manager or service coordinator. If you return to the traditional agency, you must remain with the agency for at least 90 days before you can return to the CDS option.

You may also elect to transfer to another FMSA at any time. If you want to change your FMSA, let your case manager know. He or she will give you a list of other FMSAs to choose from.

NOTE: Changing FMSAs during the middle of tax quarter may lead to complications with the IRS. If possible, it is advisable, although not required, to change FMSAs after the last payroll within a quarter.