Paying Vendors Under SDP: Invoices, Authorizations and Timelines

Most of what a Self-Determination Program (SDP) budget buys is not a caregiver's wages. It is a therapist's invoice, a day program's monthly bill, a piece of equipment, a class. Those are vendor payments, and the Financial Management Service (FMS) makes them. Here is how a vendor gets set up, what the invoice has to say, how it is checked, and when the money goes out.

Who counts as a vendor, and do they need to be vendored?

A vendor is any business or individual paid from the budget for a service or a purchase, other than an caregiver on payroll. A behavior therapy practice, a music teacher, a respite agency, a gym, a supplier of adaptive equipment: all vendors.

Families often ask whether a vendor has to be "vendored" by the regional center. In traditional services, yes. In SDP, no. The FMS is the only service that must be vendored by a regional center; your other providers do not need vendorization to be paid through your budget.

Providers do need to be qualified for the service the spending plan describes. The plan identifies the provider type and qualifications, the regional center reviews them, and the FMS verifies them before paying. What an SDP budget can and cannot pay for covers which services are eligible.

Getting a vendor set up

Before the first payment, a vendor gives the FMS two things:

• A W-9. The federal tax form with the vendor's legal name, address and taxpayer identification number. Needed for year-end 1099 reporting.
• A vendor agreement, including ACH details so the vendor can be paid by direct deposit.

This happens during onboarding, alongside the family's own paperwork. A vendor added later goes through the same two steps.

What an invoice must show

An invoice has to say enough that the FMS can check it. Every invoice must show:

• The participant. Whose budget is paying.
• The dates of service. When the service was delivered, not just the invoice date.
• The service type. What was provided, in terms that match the spending plan.

Add the amount, the rate or unit count and the vendor's name. "Services rendered" with one date is not enough.

How an invoice is checked

Once an invoice arrives, the FMS validates it before paying. At Sentinel Four the checks are:

• Service code. Does the service on the invoice map to a service in the spending plan?
• Rate. Does the rate match what the plan and authorization allow?
• Dates. Do the dates of service fall inside the authorization period and the plan year?
• Authorization. Is there a regional center authorization in place that covers this service, this provider type and this period?
• Duplicates. Has this invoice, or these dates, already been paid?

An invoice that fails any check stops, and the case manager contacts the family or the vendor.

From invoice to payment

The flow at Sentinel Four has five steps:

1. Submission. The vendor or the family submits the invoice, through the portal or by email.
2. Validation and coding. The five checks above, and coding to the budget category.
3. Approval and authorization check. Confirmation that the spending plan and the regional center authorization cover the payment.
4. Payment. By ACH or by check, on a predictable cycle. A remittance notice tells the vendor what was paid and for which invoice.
5. Records. The payment is recorded against the budget and visible in the portal.

For some purchases a virtual credit card tied to the participant's budget is available instead of an invoice, subject to approval and the spending plan.

Year end: 1099s

Vendors paid as businesses or individuals, not as caregivers, get a 1099-NEC at year end where required, by January 31, using the name and taxpayer number from the W-9. Caregivers on payroll get a W-2 instead. Year-end in Self-Determination covers January.

What delays a payment

Almost every late payment traces to one of these:

• No authorization on file. It has not arrived, has expired, or does not cover this service. Nothing can be paid without it. Authorizations should be in place the week before a service starts.
• The invoice is outside the spending plan. The service is not in the plan, the category is spent, or the rate is higher than the plan allows. The fix is a plan change through the service coordinator or independent facilitator, and it takes time. Individual budget vs spending plan explains why.
• No W-9. The vendor cannot be paid until it is on file. This one is the most common.
• An incomplete invoice. Missing dates of service or participant name, so it cannot be validated.
• A duplicate. The same dates were already paid, usually because the invoice was sent twice.

How Sentinel Four handles this

We have paid 7,000+ vendors and process 1,800+ invoices a month. Every family has a dedicated case manager who knows the spending plan and the authorizations.

Invoices come in through the portal or by email. We validate against service codes, rates, dates and authorizations, block duplicates, pay by ACH or check on a predictable cycle, send a remittance notice, and issue 1099s where required at year end. The family sees every invoice, its status and every payment in the portal. What we do not do is decide what the budget buys or approve services; the family decides, and the regional center approves. The vendor payment service page and the vendors page have details for families and for vendors.