In July, the Centers for Medicare and Medicaid Services (CMS) approved seven new Reentry Section 1115 Demonstrations in Illinois, Kentucky, New Hampshire, New Mexico, Oregon, Utah, and Vermont. These states join California, Massachusetts, Montana, and Washington in obtaining federal approval to implement innovative coverage and care delivery models to provide targeted Medicaid-covered services to Medicaid-enrollees before they are released from carceral settings. By providing these services to incarcerated individuals prior to their release, states aim to increase continuity of care and improve access to community resources that address health and health-related social needs, with the overarching goal of improving physical and behavioral health outcomes for this vulnerable population.
Reentry Section 1115 Demonstrations continue to be a high priority for both CMS and states. Approving seven demonstrations in short order signals that CMS is focused on rapidly expanding the reach of these initiatives. There are currently an additional 13 states (including Washington D.C.) that have pending Reentry Section 1115 Demonstration requests before CMS. With nearly half the states in the country pursuing this type of Demonstration authority, and many more expected to follow, both CMS and states are addressing the health care of this high-needs population front and center through Medicaid. States with pending requests, or those that are considering submitting a request to CMS, should review the recent batch of approvals and adjust or build their demonstration features to align with the new Reentry Section 1115 Demonstration standard demonstration application and special terms and conditions to streamline CMS reviews and expedite approvals.
Background on Reentry Section 1115 Demonstrations
Individuals leaving incarceration have disproportionately higher rates of physical and behavioral health conditions, are at a higher risk for poor health outcomes such as death and suicide, and often lack a connection to community-based providers and health care coverage compared to those who have never been incarcerated.1,2 Current federal law (referred to as the inmate exclusion) generally prohibits states from drawing down Medicaid funding for an individual who is an inmate.3 As a result, at release from a correctional facility, eligible individuals may not be enrolled in Medicaid, making it difficult for them to connect with care in the community.
Recognizing the need for intervention, CMS released a State Medicaid Director Letter (SMDL) in early 2023 that provided guidance to states that wanted to pursue the Reentry Section 1115 Demonstration opportunity. This demonstration opportunity allows states to receive federal financial participation for certain Medicaid-covered services provided in the timeframe immediately before release. These pre-release services must be designed to support the proactive identification of physical and behavioral health needs, improve care transitions as individuals reenter the community, and reduce morbidity and mortality post-release. The SMDL also provides details on minimum requirements all states must meet in order to obtain a Reentry Section 1115 Demonstration approval, as well as areas of flexibility each state will have in how they operationalize the program. To assist states in developing their 1115 reentry programs, CMS will consider a state’s requests for time-limited financing for capacity building activities (e.g., development of new business and operational practices related to health IT systems; the hiring and training of staff to assist with implementing the initiative; outreach, education, and stakeholder convening). For more information on Reentry Section 1115 Demonstration guidance laid out in the SMDL, see Manatt’s previous summary available here.
Summary of Approvals to Date
Since the release of the SMDL, 24 states (including Washington, D.C.) have submitted Reentry Section 1115 Demonstration requests.4
To date, CMS has approved 11 states’ Reentry Section 1115 Demonstrations.5 (See Figure 1.) While the demonstration approvals vary somewhat in eligible populations, covered services, and duration of time services are provided, all of the states with approved Reentry Section 1115 Demonstrations are required to meet the minimum requirements outlined in the SMDL and will develop reentry programs focused on improving the health outcomes of the reentry population. States that have additional covered services beyond the minimum requirements are also largely aligned in the services they seek to cover during the pre-release period.
The following table summarizes state specific features of their approved Reentry Section 1115 Demonstrations.
| Feature |
State Summary |
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Eligible Populations: States have flexibility to broadly define their Demonstration population that includes otherwise eligible, soon-to-be former incarcerated individuals.
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All Medicaid/CHIP-Enrolled Individuals: IL, KY, MA, NM, OR, UT, VT, WA
States with Targeted Eligibility Criteria:
- CA (mental illness; substance use disorder (SUD); a chronic condition; intellectual/developmental disability (I/DD); traumatic brain injury (TBI); HIV/AIDS; or are pregnant or postpartum.)
- MT (mental health or SUD diagnosis)
- NH (Diagnosis of SUD, serious mental illness, or severe emotional disturbance)
|
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Eligible Facilities: States have flexibility to provide coverage in state and/or local correctional facilities
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All State Prisons and Local/County Jails: CA, IL, MA, NH, NM, OR, UT, VT,6 WA
States with Targeted Facilities:
- KY (state prisons and youth facilities)
- MT (state prisons)
|
|
Covered Services Beyond Minimum Requirement: CMS requires states provide a minimum benefit package of case management, medication-assisted treatment (MAT), and medications upon release; states have flexibility to cover other important physical and behavioral health services that support reentry into the community.
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Pre-Release Case Management, MAT and Prescription Drugs In Hand Upon Release: All states (required)
Additional Approved Services:
- Clinical Consultation:7 CA, MA, MT, NM, OR, UT, WA
- Screening for Common Health Conditions: VT
- Laboratory and Radiology: CA, IL, MA, NH, NM, OR, UT, WA
- Community Health Worker Services: CA, IL, NM, OR, UT, WA
- Prescribed Drugs During the Pre-Release Period: CA, IL, MA, NM, OR, UT, VT, WA
- Family Planning Services and Supplies: NM, OR, UT
- Peer Support Services: MA, NH, NM, OR, UT, VT
- Durable Medical Equipment Upon Release: CA, IL, MA, NM, UT
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Duration of Covered Services: States have the flexibility to provide coverage of pre-release services for up to 90 days before the incarcerated individual’s expected date of release.
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- 30 Days: MT
- 45 Days: NH
- 60 Days: KY
- 90 Days: CA, IL, MA, NM, OR, UT, VT, WA
|
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Capacity Grant Funds: States may request one-time, start-up funding to support certain new expenditures related to implementation of their Reentry Section 1115 Demonstration
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- CA: $561 million
- IL: $77.5 million
- KY: $776,250
- NH: $12,540,690
- NM: $200,070,323
- MA: $70 million
- MT: $2.3 million
- OR: $115.5 million
- UT: $11.4 million
- VT: $3 million
- WA: $303 million
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Looking Ahead
In the coming months, stakeholders will be closely watching as California is the first state slated to implement its Reentry Section 1115 Demonstration on October 1, 2024. Other states will be seeking to understand lessons learned in California to inform successful implementation of their own reentry programs. For all states, because of the high degree of complexity in delivering Medicaid services in correctional facilities that are largely unfamiliar with the Medicaid program, success will be dependent on intensive planning and close working relationships within Medicaid agencies and across correctional facilities, health care providers, managed care plans, community health providers, formerly incarcerated individuals, and community-based organizations.
In addition to the Reentry Section 1115 Demonstration opportunity, Congress continues to focus on improving outcomes for the reentry population and has included specific requirements in the 2023 and 2024 federal Consolidated Appropriation Acts (CAA) targeted toward leveraging Medicaid to improve coverage and care for incarcerated individuals, including requiring states to provide a limited set of Medicaid and CHIP benefits to eligible youth in carceral settings.8 CMS released guidance on how to operationalize the youth-specific requirements on July 23.
1 https://www.publichealth.columbia.edu/public-health-now/news/incarceration-strongly-linked-premature-deathus.
2 https://www.apa.org/pi/ses/resources/indicator/2018/03/prisons-to-communities.
3 Social Security Act 1905(a)(30); 42 C.F.R. 435.1009; 42 C.F.R. 435.1010. States cannot claim Medicaid match for individuals who are inmates, except if they are hospitalized in an inpatient facility for 24 hours or more.
4 Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State | KFF
5 Links to states’ approved Section 1115 Demonstrations: CA, IL, KY, MA, MT, NH, NM, OR, UT, VT, and WA
6 Vermont has a unified correctional system, meaning its state correctional facilities act as both state prisons and jails.
7 Scope of clinical consultation varies by state and will be further defined in implementation plans.
8 Medicaid and CHIP programs must cover targeted case management in the 30 days prior to release and for at least 30 days post release as well as certain screenings and diagnostic services in accordance with the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) requirements (e.g., behavioral health screenings or developmental, vision, hearing and dental screening and diagnostic services) to eligible youth. Eligible youth are defined as post-disposition (i.e., were found guilty and are serving a defined sentence) and are either under the age of 21 or former foster youth up to the age of 26.