13000, Consumer Directed Services

Revision 22-2; Effective May 1, 2022

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13100 Overview of the Consumer Directed Services Option

Revision 10-0; Effective June 1, 2010

13110 Home and Community-based Services Available Through the Consumer Directed Services Option

Revision 26-3; Effective April 10, 2026

In the Home and Community-based Services (HCS) program, the Consumer Directed Services (CDS) option is available only to those who live in their own home or family home. People who receive host home/companion care, residential support or supervised living are not eligible to use the CDS option.

The HCS services currently available for the CDS option are:

Transportation-Supported Home Living (SHL)
Respite Services
Nursing Services
Cognitive Rehabilitation Therapy
Supported Employment
Employment Assistance
Support Consultation

When people select the CDS option, they are required to use Financial Management Services (FMS) and may access support consultation.

FMS are provided by a Financial Management Services Agency (FMSA) chosen by the person receiving services or legally authorized representative (LAR). FMS includes processing payroll and payables on behalf of the CDS employer. This includes serving as the CDS employer’s fiscal agent to make sure federal, state and local employment taxes and labor and workers’ compensation requirements are implemented in an accurate and timely manner. FMS also includes orientation, training, support and assistance with and approval of CDS budgets.

Support consultation is an optional service provided by a support advisor and provides a level of assistance and training beyond that provided by the FMSA through FMS. Support consultation helps a CDS employer meet the required employer responsibilities of the CDS option and to successfully deliver program services.

13120 Informing the Person Receiving Services or LAR of the CDS Option

Revision 26-3; Effective April 10, 2026

The service coordinator (SC) must inform the person receiving services, the LAR or both of the CDS option:

at HCS program enrollment;
at the request of the person or LAR;
at the time the person moves out of a residential setting into their own or family home; and
annually if the person is receiving supported home living or respite services.

People have a choice in how their services are delivered:

Agency Option – The person receiving services or their LAR chooses to have an HCS provider deliver all of the person’s HCS Program authorized services.
CDS Option – The person receiving services or their LAR serves as the employer of direct service providers for those services chosen to be delivered through CDS.

The service delivery option people select will be based on their own preferences, as discussed during the person-directed planning process. It is important to tell people that they may switch service delivery options at any time. If they select the CDS option, they can switch to the provider-managed option at any time. However, if a person switches from the CDS option to provider-managed option, they must wait 90 days before switching back to CDS.

The SC offers the CDS option by reviewing the following Texas Health and Human Services Commission (HHSC) forms with the person receiving services:

Form 1581 is used to introduce the CDS option. Form 1581 gives an overview of the differences between the CDS option and the provider-managed option. This signed form provides acknowledgement that the SC has provided an oral and written overview of the benefits and responsibilities of the CDS option in HCS.

If the person receiving services chooses at this point to decline the CDS Option, the SC completes Form 1584 to indicate the choice of the Agency Option. The SC does not complete HHSC Forms 1582, 1583 or 1586.
If the person receiving services wants to know more about the CDS option, the SC continues to Form 1582.

Form 1582 is used to provide more detailed information to the person receiving services or LAR about the responsibilities assumed if the CDS option is selected. It concludes with the CDS Consumer Self-Assessment. The purpose of the self-assessment is to:

assist the person receiving services or LAR to determine if they want to self-direct their services; and
determine what support might be needed for the person receiving services or LAR to self-direct services.

If the person receiving services or their LAR have difficulty responding to the self-assessment questions, they will need a designated representative (DR) to help them implement the CDS option. However, it is the FMSA’s responsibility to assist them with appointing a DR.

If the person receiving services chooses at this point to decline the CDS Option, the SC completes Form 1584, to indicate the choice of the Agency Option. The SC does not complete Forms 1583 or 1586.
If the person receiving services wants to know more about the CDS option, the SC continues to Form 1583.

Form 1583 is used to provide important definitions of terms used with CDS. This form includes information about who can be the CDS employer, who can be a DR and who can and cannot be hired as an employee in the CDS option for HCS.

If the person receiving services chooses at this point to decline the CDS Option, the SC completes Form 1584 to indicate the choice of the Agency Option. The SC does not complete HHSC Form 1586.
If the person receiving services wants to select the CDS option, the SC continues to Form 1584.

Form 1584 is used to document the person receiving services’ or LAR’s choice of service delivery option. If the person receiving services or LAR is selecting the CDS option, the person must also select an FMSA of his or her choice.

The SC will provide a list of FMSAs serving the person receiving services’ waiver contract area. The FMSA choice lists are on the HHSC How to Become a CDS Provider webpage.

To locate FMSAs serving the person receiving services’ area, type in the county where the person resides. The SC may use the list of FMSAs obtained from the HHSC data system. The SC should encourage the person or LAR to call and interview several FMSAs before selecting one.

Important: FMSAs are not required to be located in the same town where the person receiving services resides. FMSAs provide FMS. This service does not require ongoing face-to-face contact. The FMSA conducts the majority of its business electronically, including via email or fax, with the person or LAR, or DR if one has been appointed.

Form 1586 is used to provide information to the person receiving services or LAR about the availability of support consultation in the HCS Program. The use of support consultation is optional. If, during the development of the Person-Directed Plan (PDP), the person or LAR requests support consultation, this service must be included in the PDP. During the development of the Individual Plan of Care (IPC), the number of units of support consultation must be determined for inclusion in the IPC.

Support consultation includes practical skills training, coaching and assistance related to:

principles of self-determination;
recruiting, screening and hiring workers;
completing documents and assessments required to employ a person, retain a contractor or vendor, and manage service providers;
negotiating service agreements, including pricing and scheduling services, goods and items;
effective communication, decision-making and problem-solving skills to meet employer responsibilities;
tools for accessing information, resources and assistance;
contacting appropriate people or entities based on their roles, responsibilities and eligibility related to the person’s program or the CDS option;
participating in service planning team meetings at the employer’s request; and
complying with requirements of the person’s program as related to services delivered through the CDS option.

A support advisor provides support consultation. FMSAs are required to make support advisors available if the service is authorized on the IPC. The list of HHS certified support advisors are on the HHS Consumer Directed Services Advisors webpage.

The person receiving services or LAR may select a certified support advisor provided by his or her FMSA or may opt to use a certified support advisor who is not associated with the FMSA.

13121 Service Back-up Plans

Revision 26-3; Effective April 10, 2026

The CDS employer – the person receiving services or LAR – is responsible for developing a backup plan for each service the service planning team identifies as critical to the person’s health and safety. During the person-directed planning process, the service planning team must identify those CDS services that require a backup plan from the CDS employer. Critical services are defined as those that would place the health, welfare or both of the person receiving services in jeopardy if they are not provided.

CDS service backup plans are documented on Form 1740, Service Backup Plan. The SC completes the top part of the form to indicate why a backup plan is needed for that particular service. The CDS employer completes the backup strategies section of the form. The service planning team must review the CDS employer’s plan for feasibility and sign the plan. The SC must review a CDS employer’s backup plan and determine if the strategies are reasonable. The SC also must determine if viable contingencies exist in the plan in the event a person is unable to receive a critical program service by their regular direct service provider. If the SC determines the strategies are not reasonable and viable, the SC may support the CDS employer as needed to develop a viable plan. The SC may also suggest the CDS employer consider using support consultation to assist in the development of a backup plan. The CDS employer is responsible for providing the FMSA with the copy of each service backup plan after the service planning team approves it.

Backup plan strategies may include both formal and informal supports. If backup services are to be purchased from an HCS provider, the CDS employer must include such costs in the CDS budget. People who are paid to provide backup services also must pass all criminal history and registry checks. Funds must be allocated in the person’s budget for criminal history checks of backup service providers.

13130 Service Planning

Revision 26-3; Effective April 10, 2026

The FMSA does not play a role in the HCS service planning process. Any change in the amount of a service delivered through the CDS option must go through the service planning process. HHSC may, at any time, request documentation to explain the basis on which the amount of an HCS service on a person’s IPC was determined. If HHSC requests this documentation for a service the person receiving services or LAR has chosen to self-direct using the CDS option, the CDS employer must provide the documentation to HHSC. The CDS employer may request support from the SC to provide this information to HHSC.

If the person receiving services has an HCS provider, the service planning team and the HCS provider must revise the IPC to include the change in the amount of service(s). If the person does not have an HCS provider, the service planning team will revise the IPC to include the change in the amount of service(s). For all IPC revisions, the SC must provide a copy of the IPC to the FMSA.

In contrast, a support advisor may participate in service planning meetings if requested by the person receiving services or LAR. A support advisor must notify the person’s SC:

when support consultation service goals have been met;
if the person receiving support consultation is unable or unwilling to cooperate with service delivery; or
of the progress and status of the consumer-directed service required by the person’s program.

The person receiving services or LAR – CDS employer – is responsible for:

making sure service delivery activities address the CDS employer’s goals;
developing an Implementation Plan; and
making sure service delivery documentation is accurate and reflects how services address the person’s goals.

A support advisor may provide coaching in any of the areas listed above.

13140 Enrolling the Person Receiving Services in the CDS Option

Revision 26-3; Effective April 10, 2026

To enroll a person in the CDS option, the SC sends to the FMSA:

a completed Form 1584, Consumer Participation Choice, within five days after the person receiving services or LAR selects the CDS option to notify the FMSA of an upcoming referral; and
a hard copy of the completed initial proposed IPC when it is transmitted to HHSC for authorization.

The FMSA needs the proposed IPC to conduct the required CDS orientation with the person receiving services or LAR before services delivered via the CDS option can begin.

Several key activities must occur before service delivery begins.

The FMSA will:

explain the hiring process to the employer, including the required criminal history, registry and Medicaid exclusion checks;
make sure the employer understands who can and cannot be hired to provide CDS services;
work with the employer to develop the draft CDS budget, which includes the hours direct service providers will work, wage rate and benefits for each employee hired and project expenditures for employer services and supports, including support consultation if included on the IPC – the draft CDS budget is based on the proposed IPC; and
explain that service delivery documentation must relate back to the goals identified and documented on the PDP.

The FMSA will need to know the number of hours of CDS services on the proposed IPC to assist the employer develop the CDS budget. The FMSA conducts the CDS orientation while the proposed IPC is under utilization review by HHSC.

When the orientation has been completed the FMSA is required to notify the SC via HHSC Form 2067, Case Information. The SC files the form in the person’s record.

Services delivered through the CDS option may not begin until:

the CDS orientation has been completed;
direct service provider eligibility has been determined and verified by the FMSA;
the service provider agreement(s) has been signed;
the CDS budget has been approved by the FMSA; and
the IPC has been authorized in the HHSC data system.

The FMSA will not allow service delivery to begin until HHSC notifies the FMSA that services are authorized in the HHSC data system. In the event the number of hours authorized for SHL or Respite changes as a result of HHSC utilization review, the SC will notify the FMSA of the change by sending Form 2067 to the FMSA.

13150 Entering CDS on the IPC

Revision 26-3; Effective April 10, 2026

FMSAs do not have access to enter information into the HHSC data system. If the person receiving services has an HCS provider, the HCS provider enters the person’s IPC data, including the person’s CDS and FMSA services into the HHSC data system. If the person receiving services does not have an HCS provider, the SC enters the person’s IPC data, which are the person’s CDS and FMSA services, into the HHSC data system.

Financial Management Services

For people who use the CDS option, the IPC must include FMS. FMS is authorized as a monthly service. For example, for a 12-month period, 12 units of FMS must be included on the IPC.

Support Consultation

If the person receiving services or their LAR requests support consultation or the person’s service planning team determines that support consultation would be beneficial to provide employer coaching, hours for support consultation must also be included on the IPC.

Support consultation is to be used as needed. On average, a person may be authorized for six to nine hours of support consultation per year. It is not the type of service to be used on a weekly basis.

Note: An HCS provider is not responsible for delivering or billing for a service delivered through the CDS option.

13160 Monitoring CDS

Revision 26-3; Effective April 10, 2026

The SC monitors CDS services in the same manner as non-HCS services. A key monitoring role is to determine if the person receiving services’ health and safety is at risk in the environments where the person receives HCS and non-HCS services. If necessary, the SC takes action to protect the person’s health and safety. This includes terminating the CDS option if using CDS puts the person’s health and safety at risk.

If the SC learns of a problem with the FMSA, the SC may report the FMSA to the IDD Ombudsman at HHSC.

The FMSA is required to provide the SC and employer quarterly reports of expenditures for each CDS service. The purpose of these reports is to determine over or under utilization of services. The FMSA will also note any areas of non-compliance with the CDS option on the quarterly report.

13170 Corrective Action Plans

Revision 22-2; Effective May 1, 2022

Based on review of the quarterly reports or a monitoring visit, the SC may request a corrective action plan from the employer. It is important to remember that it is the employer's responsibility to ensure that services are delivered, that service goals are being met and that program rules are being followed.

At the request of the SC or the FMSA, the CDS employer must develop a corrective action plan using HHSC Form 1741, Corrective Action Plan. The person requesting the corrective action plan completes the top part of the form indicating the specific reason a corrective action plan is needed (for example, over expenditure or failure to submit required documentation to the FMSA in a timely manner). The CDS employer completes the corrective action strategies section of the form. The CDS employer must provide written corrective action plans to the person requiring the plan within 10 calendar days after receiving the request. The CDS employer's plan must be reviewed for feasibility and signed by the service planning team. It is the SC's responsibility to review a CDS employer's corrective action plan to determine whether the resolution proposed in the plan represents a reasonable and viable solution to the identified problem. If the SC determines the resolution proposed in the plan is not a reasonable and viable solution to the identified problem, the SC may support the CDS employer as needed to develop a viable plan. The SC may also suggest the CDS employer consider using support consultation to assist in the development of a corrective action plan.

Corrective action plan information needs to be specific to the identified issue and identify specific strategies and time frames for improvement. The goal of a corrective action plan is to focus on needed supports to ensure the employer succeeds in using the CDS option.

13180 Termination from the CDS Option

Revision 26-3; Effective April 10, 2026

A person receiving services or LAR may voluntarily request to switch from the CDS option to the agency option. Review 8600, FMSA Transfer and Changing Service Delivery Option. A person must remain with the agency option for at least 90 days before requesting to transfer back to the CDS option.

The service planning team may recommend the person receiving services be involuntarily terminated from the CDS option. For a person participating in CDS, the SC must recommend that HHSC terminate the person’s participation in the CDS option if the SC determines the:

person’s continued participation in CDS poses a significant risk to the person’s health, safety or welfare;
person receiving services or LAR has not complied with the CDS rules in Title 26, Texas Administrative Code (TAC), Chapter 264,Subchapter B, Responsibilities of Employers and Designated Representatives; or
employer failed to implement a corrective action plan within required time frames.

To recommend that HHSC terminate a person’s participation in the CDS option, the SC:

initiates a change in the person’s service delivery option by following the activities described in 8620-8660, as appropriate to the person’s situation; and
submits a written request to HHSC using Form 3611, Involuntary Termination of Consumer Directed Services (CDS) Individual Plan of Care (IPC) Cover Sheet, and include:
- a description of the service component(s) recommended for termination;
- the reasons termination is recommended, including failure by the employer to implement the CDS corrective action plan, Form 1741, Corrective Action Plan;
- a copy of the CDS corrective action plan, Form 1741, describing the employer's attempts to resolve the issues before termination was recommended; and
- a copy of the revised IPC.

The SC will use Form 2067, Case Information, to notify the FMSA that a request to terminate the CDS option has been sent to HHSC for approval.

13190 Service Delivery Transfers from one CDS Agency to Another

Revision 26-3; Effective April 10, 2026

Refer to 8600, FMSA Transfer and Changing Service Delivery Option, when a person receiving services requests to change FMSAs.

13200 CDS Resources

Revision 26-3; Effective April 10, 2026

CDS rules are available at 26 TAC Chapter 264, Consumer Directed Services Option. More information about CDS is on the CDS Training Presentation webpage.