This week our In Focus section reviews guidance from the Centers for Medicare & Medicaid Services (CMS), released on April 17, 2023, encouraging states to apply for the new Medicaid Reentry Section 1115 Demonstration Opportunity. The demonstration is aimed at helping improve care for individuals in carceral settings prior to their release.

Background

The United States has approximately 1.9 million individuals incarcerated nationwide. Studies have shown higher rates of mental illness and physical health care needs in incarcerated populations compared to the general population, as well as associations between jail incarceration and increases in premature death rates from infectious diseases, chronic lower respiratory disease, drug use, and suicide.

CMS states that formerly incarcerated individuals with physical and mental health conditions and substance-use disorders (SUDs) typically have difficulty succeeding upon reentry due to obstacles present immediately at release, such as high rates of poverty and high risk of poor health outcomes. These individuals tend to face barriers in obtaining housing, education, employment, and health care access upon release. They often do not seek outpatient medical care and are at significantly increased risk for emergency department (ED) use and hospitalization.

Purpose and Goals

After collecting feedback from stakeholders, including managed care organizations, Medicaid beneficiaries, health care providers, the National Association of Medicaid Directors, and other representatives from local, state, and federal jail and prison systems, CMS designed the Reentry Section 1115 Demonstration Opportunity. The services covered under this demonstration opportunity should aim to improve access to community resources that address the health care and health-related social needs of the carceral population, with the aims of improving health outcomes, reducing emergency department visits, and inpatient hospital admissions for both physical and behavioral health issues once they are released and return to the community.

The purpose of this demonstration opportunity is to provide short-term Medicaid enrollment assistance and pre-release coverage for certain services to facilitate successful care transitions. The full goals, as quoted from CMS, are as follows:

• “Increase coverage, continuity of coverage, and appropriate service uptake through assessment of eligibility and availability of coverage for benefits in carceral settings just prior to release
• Improve access to services prior to release and improve transitions and continuity of care into the community upon release and during reentry
• Improve coordination and communication between correctional systems, Medicaid systems, managed care plans, and community-based providers
• Increase additional investments in health care and related services, aimed at improving the quality of care for beneficiaries in carceral settings and in the community to maximize successful reentry post-release
• Improve connections between carceral settings and community services upon release to address physical health, behavioral health, and health-related social needs
• Reduce all-cause deaths in the near-term post-release
• Reduce number of ED visits and inpatient hospitalizations among recently incarcerated Medicaid beneficiaries through increased receipt of preventive and routine physical and behavioral health care”

CMS encourages states to engage with individuals who were formerly incarcerated when contemplating the design and implementation of their proposal. CMS also encourages states to design a broadly defined demonstration population that includes otherwise eligible, soon-to-be former incarcerated individuals. States have the flexibility to target population, such as individuals with specific conditions, but are encouraged to be mindful of undiagnosed conditions. States should have a plan to ensure incarcerated individuals will be enrolled in Medicaid upon their release, applying for Medicaid no later than 45 days before the day of release.

Reentry Section 1115 Demonstration Opportunity

To receive approval for the demonstration, the state proposal must include in the pre-release benefit backage:

1. Case management to assess and address physical and behavioral health needs and health-related social needs;
2. Medication-assisted treatment (MAT) services for all types of SUD as clinically appropriate, with accompanying counseling; and
3. A 30-day supply of all prescription medications that have been prescribed for the beneficiary at the time of release, provided to the beneficiary immediately upon release from the correctional facility.

In addition to these three services states may include other important physical and behavioral health services to cover on a pre-release basis, such as family planning services and supplies, behavioral health or preventive services, including those provided by peer supporters/community health workers, or treatment for Hepatitis C. CMS is also open to states requesting Section 1115 expenditure authority to provide medical supplies, equipment, and appliances.

The Reentry Section 1115 Demonstration opportunity is not intended to shift current carceral health care costs to the Medicaid program. CMS will not approve state proposals to receive federal Medicaid matching funds for any existing carceral health care services funded with state or local dollars unless the state agrees to reinvest the total amount of new federal matching funds received into activities or initiatives that increase access to or improve the quality of health care services for individuals who are incarcerated.

CMS also expects states to refrain from including federal prisons as a setting in which demonstration-covered prerelease services are provided under the opportunity.

States with approved demonstrations will need to submit an implementation plan, a monitoring protocol, quarterly/annual monitoring reports, a mid-point assessment report, an evaluation design, and interim/summative evaluation reports.

California

California became the first state to receive approval for a Section 1115 waiver amendment earlier this year to provide limited Medicaid services to incarcerated individuals for up to 90 days immediately prior to release. The approval period runs through December 31, 2026, timed with the expiration of the CalAIM Medi-Cal waiver demonstration. California’s reentry demonstration initiative aims to provide health care interventions at earlier opportunities for incarcerated individuals to reduce acute services utilization and adverse health outcomes. The state anticipates it will increase coverage and continuity of coverage for eligible beneficiaries, improve care transitions for beneficiaries as they reenter the community, and reduce morbidity and mortality in the near-term post-release.

Pre-release services include comprehensive care management, physical and behavioral clinical consultation, lab and radiology, MAT, community health worker services, and medications and durable medical equipment. A care manager will be assigned to eligible individuals to establish a relationship, understand their health needs, coordinate vital services, and make a plan for community transition, including connecting the individual to a community-based care manager they can work with upon their release. Additionally, all counties implementing Medi-Cal application processes in jails and youth correctional facilities will “suspend” the Medicaid status while an individual is in jail or prison, so that it can be easily “turned on” when they enter the community.

On April 6, 2023, HMA held a webinar titled, “Medicaid authority and opportunity to build new programs for justice-involved individuals.” A replay can be watched here. HMA will announce additional webinars on the topic.

Link to Press Release and Letter