Consumer Directed Services in North Carolina Medicaid: Getting Paid as a Family Caregiver Through CAP/Choice

Standard Medicaid home care in North Carolina sends an aide from a licensed home care agency into your parent's home. Consumer-directed services flip that model: instead of the agency choosing who provides care, your parent (or their representative) hires, trains, schedules, and manages the caregiver directly — including, in many cases, a family member who is already providing unpaid care.

How Consumer Direction Works Under the CAP/DA Waiver

The CAP/DA waiver includes a consumer-directed option called CAP/Choice. Under this model:

• Your parent (or their authorized representative) is the employer of record. They select, hire, and supervise their own caregiver.
• The caregiver can be a family member — an adult child, a sibling, a grandchild, or another relative. Spouses, legal guardians, powers of attorney, and other legally responsible individuals may be paid only when the applicable program conditions or exemption requirements are met and the arrangement is approved by the case management entity.
• A Financial Management Services (FMS) agency handles the employer logistics: payroll processing, tax withholding, workers' compensation insurance, and compliance with federal and state labor laws. The family does not handle payroll directly.
• The case manager from your CME still oversees the care plan, ensures the services match what was authorized, and conducts the required supervisory visits.

CAP/Choice is available only through the CAP/DA waiver. It is not available through Medicaid PCS — the standard Personal Care Services benefit uses agency-directed care exclusively.

Coordinated Caregiving (Sometimes Called Structured Family Caregiving)

North Carolina's current CAP/DA waiver also includes a service called Coordinated Caregiving. Some families and providers refer to this arrangement as structured family caregiving; it is a CAP/DA service, not a separate replacement for the waiver. Under Coordinated Caregiving:

• A coordinated caregiving provider organization works with a caregiver who lives in the waiver participant's home or the caregiver's home
• The provider develops and monitors an individualized care plan and coordinates the required service oversight
• Payment or a stipend, when authorized, follows current CAP/DA policy and the provider arrangement; the CME or provider can explain the current amount and requirements
• The care recipient must qualify for CAP/DA and the coordinated caregiving service must be authorized in the plan of care

Coordinated Caregiving is designed for a live-in caregiving arrangement in which the caregiver provides daily support in a private residence. It may formalize care that a family member is already providing, but the assessment, plan of care, provider, and payment rules still control.

What Family Caregivers Get Paid

Under CAP/Choice, the caregiver's compensation depends on the authorized service hours, the applicable pay-rate rules, and the fiscal-management arrangement. Do not rely on a generic hourly range; ask the CME or FMS agency for the current rate, authorized hours, and any deductions. The case manager determines authorized hours based on the parent's assessed needs.

Under Coordinated Caregiving, any payment or stipend is set under the current CAP/DA policy and provider arrangement. Ask the CME or coordinated caregiving provider whether the payment is hourly, a stipend, or another approved structure.

Tax and payroll treatment is arrangement-specific. Ask the FMS agency or coordinated caregiving provider how compensation is reported, what withholding applies, and which tax forms or payroll documents you will receive.

Requirements and Limitations

Consumer-directed services are not simpler than agency-directed care — they are different. Key requirements:

Emergency backup plan. State regulations require every consumer-directed care arrangement to include a documented backup plan specifying who will provide care if the primary caregiver is unavailable. This must name specific individuals or agencies, not just "a family member."

Training. The family caregiver must receive appropriate training for the tasks in the care plan. If the plan includes assistance with transfers, medication reminders, or catheter care, the caregiver must be trained before providing those services.

Family-member restrictions. A spouse, legal guardian, power of attorney, or other legally responsible person is not automatically eligible as a paid caregiver in every arrangement. CAP/DA policy may permit payment only when the applicable extraordinary-condition or exemption requirements are met and the CME approves the arrangement. Ask the CME before assuming that a family member can or cannot be paid.

Supervision. Even though the family manages the caregiver, the CME case manager and (for SFC) the provider organization conduct regular supervisory visits to verify that services are being delivered as authorized.

Which Option Fits Your Family

Choose CAP/Choice if a family member wants to be paid for caregiving hours but the arrangement is more like a job — scheduled shifts with defined tasks — and the family member does not necessarily live with the parent.

Choose Coordinated Caregiving if a family member already lives with the parent and provides daily support in a live-in arrangement. The service can formalize that arrangement, but the CAP/DA assessment, plan of care, provider, and payment rules still apply.

Stick with agency-directed care if no family member is available or willing to be the primary caregiver, or if the family prefers the reliability of an agency managing scheduling, backup staffing, and supervision.

The Aging in Place in North Carolina guide walks through the consumer-directed enrollment process alongside the standard agency pathway, including the FMS enrollment paperwork, the backup plan requirements, and the financial implications for family caregivers who take on the employer-of-record role.

See more North Carolina guides →