CONSUMER-DIRECTED OPTION (CDO) SERVICES PROVIDER IN KENTUCKY

Fatumata Kaba
Jul 25
4 min read

EMPOWERING PARTICIPANTS TO DIRECT THEIR OWN CARE THROUGH FLEXIBLE, PERSON-CENTERED SUPPORTS

Consumer Directed Option (CDO) Services in Kentucky allow Medicaid waiver participants to hire, train, and manage their own caregivers—often family members, friends, or trusted community members. This model provides individuals with greater control, autonomy, and flexibility over how their care is delivered. CDO is offered under several Kentucky Home and Community-Based Services (HCBS) waivers and is managed through Fiscal Management Agencies (FMAs) and Support Brokers.

1. GOVERNING AGENCIES

Agency: Kentucky Cabinet for Health and Family Services (CHFS) — Department for Medicaid Services (DMS)

Role: Oversees all aspects of the CDO program, including waiver eligibility, reimbursement rates, and compliance

Agency: Kentucky Department for Aging and Independent Living (DAIL)

Role: Manages quality standards, participant rights, and waiver guidelines for CDO services

Agency: Centers for Medicare & Medicaid Services (CMS)

Role: Ensures federal regulations for person-centered planning, consumer control, and self-directed services are upheld

Agency: Managed Care Organizations (MCOs)

Role: Approve care plans that include CDO services and coordinate with case managers and FMAs for service delivery

Agency: Fiscal Management Agencies (FMAs)

Role: Handle payroll, tax reporting, and provider payments on behalf of the participant/employer

2. SERVICE OVERVIEW

The Consumer Directed Option (CDO) allows participants to act as the employer of record, giving them the ability to:

Hire, supervise, and dismiss their own caregivers
Create individualized care schedules that reflect their lifestyle
Train workers in accordance with their personal preferences and needs
Receive support from a Support Broker to navigate the process

Approved services that can be delivered under CDO may include:

Personal care and hygiene assistance
Homemaker tasks (laundry, cleaning, errands)
Meal preparation
Mobility and transfer assistance
Accompaniment to appointments and community outings
Medication reminders
Safety supervision and companionship

3. ELIGIBILITY FOR CDO PARTICIPANTS

To access CDO, participants must:

Be enrolled in an eligible HCBS Medicaid waiver
Be capable of directing their own care or have a designated representative
Complete a person-centered service plan (PCSP) with assistance from a case manager
Agree to follow employer responsibilities with support from a Support Broker and FMA
Pass a home safety assessment and service plan review

4. LICENSING & PROVIDER APPROVAL REQUIREMENTS (FOR SUPPORT BROKERS & FMAS)

For individuals or entities supporting CDO as brokers or FMAs:

Register business with the Kentucky Secretary of State
Obtain EIN and NPI (as required)
Enroll with Medicaid through MPPA for CDO-specific provider types
Submit a CDO Policies & Procedures Manual
Maintain general liability and cyber/data protection insurance
Have experience in payroll systems, tax compliance, and Medicaid service models
Ensure HIPAA compliance and person-centered service delivery

5. KENTUCKY PROVIDER ENROLLMENT PROCESS (FOR BROKERS & FMAS)

Step 1: Medicaid Enrollment via MPPA

Apply under CDO Support Broker or Fiscal Management provider types
Complete credentialing through each KanCare MCO (if applicable)

Step 2: Documentation Submission

Submit operational policies, staffing plans, staff credentials, and data protection protocols

Step 3: Program Setup

Collaborate with case managers and DAIL to support participants
Set up payroll systems, timesheet tracking, and background screening processes
Begin working with participants and caregivers based on approved service plans

6. REQUIRED DOCUMENTATION

Kentucky business license or Articles of Incorporation
IRS EIN and (if applicable) Type 2 NPI
General liability and cyber/data insurance policies
CDO Policy & Procedure Manual, including:
- Participant onboarding templates and representative agreements
- Caregiver application and training logs
- Timesheet tracking and payroll authorization forms
- HIPAA, grievance, and critical incident protocols
- Participant rights documentation and appeal procedures
- Quality assurance tracking and broker supervision logs
- Medicaid billing systems and audit-ready financial reports