Veteran-Directed Care transportation: getting paid when a veteran manages their own VA budget

Veteran-Directed Care (VDC) is a VA program that gives an enrolled veteran a monthly budget and lets the veteran decide what to buy with it, rides included. For a ride company, that makes the veteran your customer, the veteran’s approved spending plan your authorization, and the veteran’s aging agency your payer. You do not bill VA. It is a different channel from VA special mode contracts, where a medical center buys the trip itself, and from the travel pay covered in rides to VA appointments.

What is Veteran-Directed Care, and who handles the money?

VDC is a VA program run through local aging agencies, and four parties touch every veteran’s money. The Administration for Community Living (ACL) says VA’s Veterans Health Administration and ACL developed it in 2008 and that it is offered nationally. ACL says any veteran enrolled in VA health care who meets the clinical need can take part. VA adds two conditions: the veteran must be eligible for community care, and the service must be available where the veteran lives.

A VA medical center refers the veteran to a local aging and disability agency, which can be an area agency on aging, an aging and disability resource center, a center for independent living, or a state unit on aging. From there:

• The veteran decides what services and goods to buy, when, and who provides them. A veteran who does not want to manage the budget can name a representative to do it.
• The person-centered counselor works for the agency and helps the veteran write the spending plan and work out where and how it can be carried out. That makes the counselor the person to know.
• The financial management services (FMS) agency keeps the veteran’s budget and balances, contracts with service providers and pays for approved services and goods, as Washington’s DSHS describes the job. In ACL’s template the FMS is usually a subcontractor of the aging agency, and sometimes the agency itself.
• The VA medical center approves each plan and budget and pays the agency every month.

Can a veteran’s budget pay for rides?

Yes, when the veteran’s spending plan lists transportation and VA approves it. Bay Aging, which delivers the program with the Richmond VA Medical Center, lists rides that support a veteran’s health-related appointments and community activities among its allowable services. Washington’s DSHS names transportation that a personal assistant does not provide among the goods and services a veteran may direct. ACL’s sample handbook describes it as specialized transportation to socialization or medical support activities, and says it may include an escort so the veteran can use regular rather than specialized transport.

Seven tests apply to every purchase. Two of them matter most for rides:

• Least costly. The purchase has to be the least costly alternative that reasonably meets the veteran’s identified need.
• Not paid elsewhere. It cannot be something VA, Medicare, Medicaid, TRICARE or another program or insurance provides or pays for.

Bay Aging’s own list of purchases the program will not allow includes services already provided to the veteran by or through VA, and anything that benefits a person other than the veteran, so a ride for someone else is out. Expect the counselor to ask whether VA travel pay, a VA van or a Medicaid ride already covers the trip. A ride to a VA appointment that beneficiary travel pays for is a hard sell. A ride to a community activity or an appointment that no other program pays for is the stronger case. The VA beneficiary travel entry explains what VA itself already pays.

The veteran’s own workers are the other choice. The handbook’s transportation entry says a caregiver who goes along may be reimbursed as the veteran agrees, and its errands entry allows mileage when a caregiver uses a private car. A ride company’s case is strongest where a private car will not do, such as a wheelchair user who needs a lift.

How does a ride company get chosen?

The veteran chooses, and the approval steps run through the veteran’s counselor. ACL’s operations manual has each aging agency write its own procedure for what a selected vendor sends to the FMS, so the details differ by agency. The ACL handbook walks a veteran through buying from a business, which gives you the order of events:

1. Give a written quote. The handbook tells veterans to get a quote showing the full cost, so state your price per trip or per mile and what it includes, such as waiting time and no-show charges.
2. The counselor adds it to the spending plan, and VA approves it. Anything bought with the budget has to be in the approved plan first. Bay Aging says all purchases must be approved by the medical center before the veteran buys. Do not run the first paid ride until the veteran or counselor confirms approval.
3. Agree to be paid by the agency. The handbook has the veteran find out whether the business will accept a check from the FMS agency. Tell the veteran how you can be paid.
4. Invoice the way the agency asks. In Bay Aging’s handbook the veteran sends the vendor’s invoice to the counselor to request payment, so expect the veteran to be the one who passes it on.

To meet veterans who use the program, get to know the counselors at the agency that runs VDC for your local medical center. ACL’s page has a lookup for medical centers that offer it.

How are the rate and the budget set?

The veteran agrees your rate, but the budget behind it is fixed by VA. Each veteran gets a case-mix level, and the level sets a bundled monthly rate. ACL’s billing guide says the rate covers the veteran’s spending plan plus the agency’s administrative costs, including the counselor and the FMS fee. The guide’s own worked example is a veteran in King County, Washington, at level E: a $3,555 monthly rate, of which $2,846 is the spending plan and $709 is administration. Multiply by the length of the authorization to get the total budget, which is $42,660 for twelve months in that example. Those figures show how the math works and are not a current rate. VA publishes each year’s rates by state, county and level in a case-mix calculator, and the fiscal year 2026 version replaced the 2025 rates on October 1, 2025.

Three consequences for your pricing:

• You share the budget. The same money pays for personal care workers, respite, equipment and everything else in the plan. A rate that crowds those out is likely to be questioned at the next plan review.
• Monthly spending can run over. The guide allows a month above the average, as long as it is in the approved plan and the total stays within the authorized budget. VA medical centers are not required to reimburse spending beyond that total.
• The plan lists your price. ACL’s sample spending plan lists each routine purchase from a non-employee vendor with the vendor’s name, the unit cost, the number of units and the monthly total. Give the veteran a price per trip or per mile and an estimate for the regular schedule, so the plan can show a monthly figure.

How does the money reach you?

The agency pays you from the veteran’s account, and VA pays the agency afterward. A typical month looks like this:

1. The invoice reaches the agency, usually through the veteran or the counselor. Bay Aging’s handbook has the veteran send the invoice and a completed vendor purchase checklist to the counselor by the 15th of the month after the purchase. Ask your agency for its checklist and cutoff.
2. The FMS agency pays the vendor from the veteran’s budget, usually by check.
3. The agency lists the month’s purchases by worker, good and service on a Monthly Service Report and sends it to the VA medical center with its invoice.
4. The medical center checks that every purchase appears in the approved spending plan and that total payments stay within the authorized budget. The billing guide says medical centers will not reimburse services that are missing from the plan.

That last step is why an unapproved ride is risky. The agency can only be paid back for what is in the plan, so it has little reason to pay for a ride that is not. If a trip is not in the plan yet, ask the counselor to add it before you drive it.

How does it differ from other ways VA and Medicaid riders get paid?

In Veteran-Directed Care the veteran picks you and an agency pays you. Two neighboring programs work differently, and a ride company can be in all three at once.

Beneficiary travel is a fourth channel and pays the veteran back, not the ride company. The Medicaid version has its own rate rules and codes, covered in self-directed Medicaid transportation.

Handling these rides in HealthRide

A counselor needs to see what each ride was and what it cost. HealthRide builds an invoice from your completed trips, priced from your rates, with each date, pickup, drop-off and charge on it. A veteran’s weekly rides can be scheduled once as recurring trips, and each completed trip keeps its pickup and drop-off times, GPS-recorded miles and the rider’s on-screen signature. See invoicing and recurring trips.