What to Make of Managed Care:
Its Impact on Direct Support Professionals and the People They Support


Holly Riddle, J.D., M.Ed., FAAIDD is Policy Advisor to the North Carolina Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. She can be reached at holly.riddle@dhhs.nc.gov

Maybe two or three times in a career something "really big" happens. A change occurs that alters, in seismic proportion, the landscape of work. The rest of the time, changes largely go unnoticed. New practices and policies bubble up and push their way to the forefront. Sometimes, they co-exist with older ways of doing business. The process is slow. Occasionally, though, just as in nature, you witness radical change. The shifts in thinking are groundbreaking. You feel an earthquake-like shaking of the assumptions we have held for years. In the wake of these "big ideas" in human services, the path is cleared for new possibilities in the way Direct Support Professionals (DSPs) work with people.

The "goodness" of some shifts in human services is clear. The best of the "big ideas" fall into this category, motivated by deep forces at the core of our humanity. These forces include self-determination, independence, productivity, contribution and inclusion. Released, such forces uplift community and make it a better place for all. We all know examples of good and powerful paradigm shifts. There were the gentle winds of person-centeredness, a return, some said, to the soul of our work. There was the thunder storm of the Supreme Court’s ruling in Olmstead v. L. C., a case that washed away the old belief that the best we had to offer were congregate services. Most recently, a benign wave—the Home and Community Based Services Settings Rule—is moving us ever closer, in Medicaid waiver programs, to welcoming and ethical communities. These system-wide changes are unquestionably positive and dynamic. They deepen the dignity and respect that we give to one another and, in doing so, transform lives. But what about another change: one that is equally powerful and pervasive, yet more controversial? What about the incredible heat created as managed care has pushed the tectonic plates at the foundation of Medicaid long-term services and supports? Is this shift subtle and unnoticeable or is it seismic? Either way, does it matter for DSPs?

Some argue that managed care is just a distant thunder for the frontline workforce. DSPs, they say, can shrug it off and go about their business. But, to the contrary, this is a hard rain with rolling thunder and a real impact on you and those you support. When skilled DSPs understand why managed care matters and learn to work with its force, there is potential for a common good.

Managed care

Not all managed care is the same. It is a potential force for good, when used the right way. The various features of managed care are often called a "toolkit" and for good reason. Tools are neither good nor bad. It’s how we use them—at all levels of a system—that matters.

Perhaps the most powerful managed care tool is capitation. Capitation is the set amount of money that a Managed Care Organization (MCO) gets. It is based on the numbers and characteristics of the people to be served by providers in the MCO’s provider network. In managed care, an MCO gets a set, or capitated, amount of money up front. This is different from the traditional, fee-for-service system, where the organization gets reimbursed after a service is delivered and the bill is sent in. If managed care is implemented well—with a fair rate for providers; equitable access to needed services and supports; and system performance measured against outcomes that matter to each person served—capitation can be a powerful tool for DSPs.

In managed care, an MCO gets a set, or capitated, amount of money up front. This is different from the traditional, fee-for-service system, where the organization gets reimbursed after a service is delivered.

Think about a familiar service: supported employment. Look at how that service plays out in many fee-for-service systems. It is typical for job coaches to bill for time spent face-to-face with the individual. The provider gets paid for the hours spent on job development—but only when the job development is complete. This creates a financial incentive to continue to "job develop." But the presence of the job coach at a work site when it is no longer necessary may reduce the person’s chances of developing relationships with co-workers. Over time, the result may be to limit the size and quality of the individual’s personal network. In this example, the fee-for-service system also does not reward the best DSPs. In fact, the practice of billing hourly for job development may mean that the job coaches who are the most efficient at developing jobs draw down less of a reimbursement for their employer. Provider reimbursements based on the number of hours spent in job development may mean that you move on too slowly to the next person. This unintended result of the fee-for-service system pulls against the direction in which the system is trying to move: getting people jobs.

By contrast, managed care’s capitation, paired with data collection, can create a more effective approach to employment. Paying up front can facilitate positive outcomes for the person supported. It can also make a job coaches’ successes more prominent. Up-front payment to the provider for an outcome like competitive integrated employment creates a financial incentive for job coaches to be efficient and effective. In this environment, the DSPs set sight on the outcome. You seek out a job that matches the person’s skills and interests; identify natural supports in the workplace; and access needed services. You fade supports when the outcome is met. MCOs collect a lot of data. If the data shows that the job meets the mark for the desired outcome, the MCO will be more likely to continue to contract with your employer. In the best of managed care systems, DSPs who deliver on individual outcomes will change lives and be valued for doing so. Moreover, MCO data about providers’ outcomes, when shared with the public, can assist people and families in choosing an organization, or even a DSP, with whom they want to work.

Managed care can promote innovation

Take the job coach example again. A tech-savvy provider may encourage DSPs to use technology—such as smart phones, tablets, and apps—to support employment outcomes. Using technology may help you become more efficient. Or it may assist a person with a disability to become more independent at work. Efficiency is a key goal of managed care. Better use of a job coach’s time means more people get jobs. Sufficiently funded and with a clear eye to outcomes, managed care has potential to hone best practice. It can empower DSPs to excel; help people achieve their life goals; and promote innovation in the delivery of services and supports.

Managed care can advance DSPs’ mastery of competencies and raise their stature as professionals

The Americans with Disabilities Act (ADA), the Olmstead decision, and Medicaid’s HCBS Settings Rule are integrating services more seamlessly into daily life. Services and supports are increasingly tailored to a person’s unique needs. They take place in an individual’s home, school, worksite and community. In traditional, large group settings, supervisors and managers are on the premises. They provide DSPs with hands-on supervision. However, in inclusive, community settings, you often work solo. Out in the community, there are more opportunities where the DSP’s independent judgment and training are put to the test.

Your performance matters more than ever in a managed care environment. The MCO has its sights set on getting what it has paid for in advance. With data-driven accountability front and center, MCOs need providers that can deliver. For providers to thrive, the DSPs they hire must have the knowledge and skills to work independently, efficiently, and successfully. Never has a DSP’s demonstrated competency on the job mattered so much. It’s no accident that, in 2014, CMS published a set of core competencies for the frontline workforce in human services. This development is accelerating the adoption of competency-based training for DSPs. The need to hire highly competent DSPs who can work independently will likely strengthen the push, already underway, towards credentialing DSPs. Managed care’s emphasis on outcomes and accountability is creating a gravitational pull. This pull is moving DSPs from paraprofessional to professional status. With that comes a new aim for MCOs and providers: to develop and adopt policies to recruit, retain, and reward this important workforce.

With data-driven accountability front and center, MCOs need providers that can deliver. For providers to thrive, the DSPs they hire must have the knowledge and skills to work independently, efficiently, and successfully. Never has a DSP’s demonstrated competency on the job mattered so much.

Managed care can improve retention of DSPs and promote valued outcomes

Competency-based training for DSPs is a sign of the times. It is used in both Medicaid fee-for-service and managed care systems. It is a particularly important addition, however, to the managed care toolkit. Research on the use of a competency-based curriculum for DSPs shows that such training reduces turnover. Reduced turnover means longer retention of staff. When DSPs stay longer in a job, provider costs are dramatically lowered. Managed care strives for cost efficiencies.

Managed care systems that value those DSPs who can demonstrate core competencies are an even bigger win for people with disabilities. Studies show that competency-based training for DSPs results in improved outcomes for the people they serve. The implications of this finding are earth shaking. MCOs that embrace competency-based training for DSPs can build a more qualified workforce. MCOs can also lower turnover and achieve savings. Finally, MCOs can use those savings to serve more people. This not-so-distant rumbling of change promises new career paths for the professionals who are indispensable to successful managed care systems: DSPs.

Managed Care will increasingly rely on DSPs to improve the quality of services

As managed care adjusts itself to the values of person- and family-centered thinking, Olmstead’s mandate, and the requirements of the Medicaid Settings Rule, the meaning of "quality" will be transformed. Your skill as a DSP will ultimately "make or break" an organizations and a systems quality improvement efforts. The strength of the system, at its foundation, will be determined by DSPs. It is your abilities to respond to the "unique culture, social network, circumstances, personality, preferences, needs and gifts of each person" that are the touchstone of exceptional service delivery.

Managed Care systems

Not all DSPs move mountains. Neither is all managed care good. Sometimes managed care merely pays providers to do the same thing faster, at less cost, cutting corners and underserving people along the way. Other managed care systems are skillfully set on a course to achieve quality. The best managed care systems invest in DSPs and that investment acts as a renewable energy that fuels quality. At the core of these systems, there is a "big idea" about quality. This elemental principle is simple, but of seismic magnitude in its capacity to bring about positive and pervasive change in any managed care environment. That principle is this: quality is "defined at the point of interaction between the staff member and the individual with a disability." It is from this point that the profoundly good energies of ethical community spring into being. It is from this place that DSPs can and do move mountains, changing lives for the better.


  • The views expressed in this article are solely those of the author in her private capacity and do not represent the policy or position of the North Carolina Department of Health and Human Services.


  1. 527 US 581 (1999).
  2. HCBS Advocacy. Retrieved from https://hcbsadvocacy.org/learn-about-the-new-rules/ .
  3. Managed care may be defined as coordinating, organizing, and rationalizing the delivery of services to improve access and quality and avoid unnecessary expenditures. Gettings, R., Moseley, C. & Thaler, N. (2013). Medicaid managed care for people with disabilities: Policy and implementation considerations for state and federal policymakers. Washington, DC: National Council on Disability.
  4. Mills, Lisa A. (2015). Can supported employment flourish in a Medicaid fee for service system? Retrieved from http://www.rudermanfoundation.org./wp-content/uploads/2015/02/CPSD-Can-Supported-Employment-Flourish-in-a-Medicaid-Fee-for-Service-System.pdf PDF .
  5. National Direct Service Workforce Resource Center. Final Competency Set (2014, December). Retrieved from https://www.medicaid.gov/medicaid/ltss/downloads/workforce/dsw-core-competencies-final-set-2014.pdf PDF
  6. Impact. The Importance of Competency-Based Training for Direct Support Professionals. Retrieved from https://ici.umn.edu/products/impact/202/over7.html.
  7. NADSP. About DSP Certification. Retrieved from https://nadsp.org/about-dsp-credentialing/ .
  8. Research shows benefits of training include decreased turnover among DSPs (2014, January). Retrieved from http://directcourseonline.com/research-shows-benefits-of-training-include-decreased-turnover-among-dsps/ . For the study, see Bogenshutz, M., Hewitt, A., Nord, D., & Hepperlen, R. (2014). Direct support workforce supporting individuals with IDD: Current wages, benefits, and stability. Intellectual and Developmental Disabilities, 52(5), pp. 317-329.
  9. Nord, D. & Hewitt, A. (2015). Making the link: Direct support and individual outcomes. Presented at the Association on Intellectual and Developmental Disabilities national conference, Louisville, Kentucky.
  10. The NADSP code of ethics (2010). Retrieved from https://www.nadsp.org/library/code-of-ethics/10-library/72-code-of-ethics-full-text.html .
  11. In 1996, John F. Kennedy, Jr. made this statement: "Quality is defined at the point of interaction between the staff member and the individual with a disability." Kennedy is widely considered the ideological founder of the National Alliance of Direct Support Professionals.