An older woman is being cared for by her middle-aged daughter and they are looking out the window.
Understanding the benefits & considerations of offering this service to your clients
Sponsored by: Philadelphia Insurance Companies

More than 10,000 people1 a day are turning 65 years old. At this rate, by 2040,2 upwards of 80 million Americans will be over 65. It’s easy to see why this demographic segment holds a lot of power and influence—especially in one important area: their health care.

This segment wants more health care options to give them the flexibility to meet their changing needs and live their lives on their own terms. Aging in place is now common. Businesses like yours are meeting this exploding need and filling the care gap.

Flexibility is key as consumer preferences and needs adjust to changing factors in their own lives. Understanding the evolving landscape of care trends is crucial to satisfying clients. Do you know the pros and cons of consumer-directed home healthcare?

What’s different about consumer-directed home healthcare from other care options?

Franchises and independent home healthcare agencies have been the leading choices when someone is looking for assistance in their home. From providing light housekeeping to hospice, the client’s assistance needs can cover a broad range of caregiving services.

However, the Affordable Care Act,3 passed by Congress and signed by President Obama on March 23, 2010, authorized section 1915(k) of the act to offer self-directed services. This legislation added another dimension to who provides home and health care services. And, since 2015, consumer-directed care has gained traction because of this unique additional option.  

With consumer-directed home health care, clients can choose to have their care provided by a friend or family member with their caregiver compensated4 by Medicaid through fiscal intermediaries or financial management programs. It’s a win-win situation for the clients who can have their care provided by someone they know and trust and are comfortable with, and for the caregivers who can now be compensated for their time.

Working with Medicaid Funding

Consumer-directed healthcare is overseen at a state level through Medicaid. While each state’s Medicaid funding authority works differently, they all share common functions5 requested by CMS (the Centers for Medicare & Medicaid Services) to support consumer-directed healthcare. (All applications go through your local department of social services or Medicaid plan.)

  • An assessment is required to identify the client’s needs
  • A service plan is written specifying the services and support needed by the person
  • A budget is calculated with payments handled through fiscal intermediaries or financial management services
  • A system of supports is developed to assist in the carrying out of responsibilities

Fiscal intermediaries or financial management programs do not administer the programs. But in many instances, they can help clients navigate the process and complete the forms.

New York was the first to offer the program as the Medicaid Consumer Directed Personal Assistance Program (CDPAP).6 Other states have quickly followed with plans7 of their own, such as:

  • Arizona: Self Directed Attendant Care (SDAC)8
  • California: In-Home Supportive Services (IHSS)9
  • Colorado: Consumer-Directed Attendant Support Services (CDASS)10
  • Connecticut: Community-First Choice Program11
  • Florida: Consumer-Directed Care Plus (CDC+)12
  • Pennsylvania: Consumer Directed Services13
  • South Carolina: Community Choices Waiver14
  • Texas: Consumer-Directed Services15

Check with your state to see if a program is in place and how it works. Plans may also be called:

  • Consumer-Directed Services
  • Participant Direct Care
  • Participant Direction
  • Consumer-Directed Medicaid Waivers
  • Veteran-Directed Care
  • Self-Administered Services

Many agencies have expanded to be the fiscal intermediary for clients in addition to the regular caregiver services they provide to other clients. It allows them to provide a full line of services to attract more clients by matching their preferences.

One Important Thing to Remember if Offering Consumer-Directed Home Health Care

While this option is fast becoming a popular choice, eagerly embraced by seniors who need assistance and agencies that want to expand their services, one critical factor isn’t clearly developed yet.

What happens if there is an accident and someone is injured? Or if there is theft? Who is covered by insurance when the agency is just the fiscal intermediary and not responsible for the training or the performance of the caregiver?

Now that the client is the “employer of record,” they are in control of the caregiver, making it difficult to decide who is liable for claims and negligence. That’s why, if you are thinking of becoming involved in consumer-directed home healthcare, you should make sure to speak to your insurance carrier first to get a complete picture of the situation.

It’s the easy way to safeguard your agency from any liability that could result from this evolving client service opportunity.

Philadelphia Insurance Companies (PHLY) has been providing home healthcare liability insurance for over a decade. The coverage is combined with our unmatched risk management services and enhanced by our experience protecting over 120 specialty niche businesses’ unique needs. We’re on top of industry changes to make sure you’re protected. We work with our insureds to make sure you have a complete protection package for your home care agency so you’re ready for today’s ever-changing business opportunities.

Interested in finding out more about the insurance coverage and risk management services PHLY can offer you?  Please don’t hesitate to contact our experts today.