Self-Determination Program and the Financial Management Services Provider

By Ability Central

21 September, 2022

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California's Self-Determination Program (SDP) provides disabled individuals the opportunity to take agency and control over the services offered by implementing Person-Centered Planning (PCP). This program offers more freedom, more choices, and more control to people receiving disability support services.

"This is about your hopes and your dreams. Instead of others providing a cookie-cutter approach to helping you, you get to choose what's best for you," says Shannon Cherry, a mother of two daughters who participated in the pilot of SDP.

With emphasis on the power of choice and a supportive team, one of the integral parts of the program includes selecting a Financial Management Services provider.

What is a Financial Management Services Provider?

A Financial Management Services (FMS) provider supports people who choose to get their regional center resources through SDP. Participants in SDP get their support from a person or business to help pay for the services they require.

FMS providers assist individuals enrolled in the program in the following ways:

Managing an individual's budget to pay for services, including paying employees
Assists with hiring employees
Ensures providers are qualified for delivering the services
Helps providers to get criminal background checks, as needed

The duties of an FMS provider depend on the individual's arrangement for services.

Why are FMS Providers Required?

California state law [Welfare & Institutions Code §4685.8(d)(3)(E)] requires that participants in SDP use an FMS. An FMS provider offers support to individuals by ensuring providers are properly qualified, implementing payment of service providers, and ensuring adherence to all labor and tax laws. An FMS has a duty to report to the regional centers and participants to help inform the budget. An FMS does not control the budget—they execute support for the participant's needs by paying for the services they choose.

Types of Financial Management Services Providers

There are three types of financial management services for the program: Depending on a participant's Individual Program Plan (IPP), more than one may apply.

FMS as Bill Payer: (Fiscal Agent Model): Participants can choose this model of FMS provider to assist with purchasing goods from a business. An FMS bill payer may write checks and pay for goods or services listed by the IPP. There is no employer/employee relation between the FMS, Service Provider, or the participant. Businesses are responsible for providing items or workers; the FMS provider then writes checks for services and goods provided. The business maintains employee/employer status with the workers and is responsible for all applicable employment laws and taxes and must obtain appropriate insurances.
Participant and FMS as Co-Employer: If the participant wants to share some of the employer roles and responsibilities with an FMS, this is a good choice. While the FMS acts as the employer on the record, the participant maintains the ability to hire and terminate employees with input from the FMS provider. The FMS provider maintains the primary employer liability and insurances and assists by processing payroll and verifying provider qualifications.
Participant as Sole Employer (Fiscal/Employer Agent Model): A participant who wishes to be the direct employer of those providing services may choose this model. The FMS providing services in this model assists the participant in abiding by employment laws, verifies provider qualifications, and processes payroll. The participant is required to obtain necessary employment insurances, such as worker's compensation.

Selecting a Financial Management Services Provider

All FMS providers need to be vendored by an appropriate Regional Center; the Regional Center will offer providers available to the participant in the area. Costs associated with FMS providers are negotiated between the participant and the FMS provider. These costs cannot exceed the maximum rates posted by the Department of Developmental Services, available here.

For any questions or more information, participants may reach out via sdp@dds.ca.gov.

Financial Management Services Provider Requirements

In order to provide services, an FMS provider must meet the following requirements:

Be vendored by a regional center with accordance to general vendorization processes and requirements. Separate vendorization is not required for each regional center. Providing copies of documentation is necessary if the FMS Provider offers services outside of the catchment area's regional center.
Meet the requirements applicable in Sections 58884, 58886, and 58887 of Title 17 of the California Code of Regulations.
File a bond with the vendoring regional center, issued by a surety company to the State of California as principal. The amount may be no less than 20 percent of the total of all individual budgets for participants served via the FMS. The bond needs to be reviewed and renewed annually, or more frequently, if necessary, to ensure the minimum threshold is maintained. This requirement applies of the total of all individual budgets for participants served by the FMS during a state fiscal year is expected to be five hundred thousand dollars ($500,000) or more.
Invoice and receive payments from regional centers no more than two times per month, on regularly scheduled dates each month.
Make purchases and submit invoices for only those services and supports identified in the participant's individual program plan and budget.
Provide monthly statements to the participant and regional center that include:
1. Amount of funds allocated by budget category
2. Amount spent in previous 30 days
3. Amount of funds remaining in the individual budget
Assist in verifying service providers meet requirements, when applicable, for the services they provide. This includes licenses, certifications, education, or experiences.
Verify individuals providing direct personal care to the participant obtain a background check and receive clearance prior to providing services.
Verify providers are not excluded individuals. Defined as those that have been placed on US Department of Health and Human Services Office of Inspectors' General List of Excluded Individuals/Entities, or Medi-Cal Suspended and Ineligible Provider List of persons, or individuals and entities that have been convicted of a criminal offense related to any of the program under Medicare, Medicaid, or the Title XX services program, including Title 17, Section 54311 (a)(6).
Verify the completion of assessment process to ensure that services are provided in settings:
1. Designed primarily or exclusively for the provision of services to people with developmental disabilities, or
2. Where individuals with developmental disabilities are grouped or clustered for the purpose of providing services.
Comply with all vendor requirements outlined in Section 54327 of Title 17, including reporting to the regional center any special incidents, as defined in this section that the FMS has knowledge of or that has been reported to the FMS by the participant, service provider, or any other person.
Agree to accept a monthly rate for each participant that does not exceed the rate schedule published by the Department's website at: https://www.dds.ca.gov/SDP/docs/FMSRates.pdf.