This is an excerpt from a recent Manatt article published on State Health & Value Strategies. Click here to download insight.

On July 23, 2024, the Centers for Medicare & Medicaid Services (CMS) released a State Health Official (SHO) letter, “Provisions of Medicaid and CHIP Services to Incarcerated Youth.” The SHO letter provides implementation guidance on sections 5121 and 5122 of the Consolidated Appropriations Act, 2023 (CAA), which: (1) require states to provide targeted case management (TCM) and screening and diagnostic services for Medicaid and Children’s Health Insurance Program (CHIP) enrolled children and youth who are incarcerated and post-disposition (e.g., children and youth who are incarcerated after conviction); and (2) offer states the option to provide full scope Medicaid and CHIP services to eligible children and youth who are incarcerated and pre-disposition (e.g., children and youth who are incarcerated prior to conviction). Eligible children and youth are defined as under 21 years of age, or between the ages of 18 and 26 and eligible for Medicaid under the mandatory former foster care eligibility group. The SHO letter lays out the expectations and timelines for states to operationalize the required and optional provisions of the law and provides important clarifications on CHIP eligibility policy. All provisions related to Medicaid and CHIP services for incarcerated children and youth are effective January 1, 2025.

All states now face a significant amount of policy and operational planning work to implement these new requirements. Over the next six months, states will need to, at a minimum: develop state policies and operational plans; coordinate with and provide technical assistance to correctional facilities so that they can enroll as providers and establish billing and claiming processes; ensure smooth information sharing processes between facilities and state Medicaid agencies for Medicaid/CHIP enrollment, suspension, and delivery of services; and submit and obtain approval for state plan amendments (SPAs). The 24 states with either approved or pending section 1115 reentry initiative demonstrations may be better positioned to implement these requirements, but many will need to expedite their current planning and prioritize correctional facilities which serve children and youth to meet the compliance effective date of January 1, 2025.[8] Based on the experience of other states already planning to provide targeted services to inmates, delivering Medicaid and CHIP services within correctional facilities is a complex endeavor that requires considerable time and state resources to support correctional facilities that do not have previous experience with Medicaid or CHIP.

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