DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop: S2-26-12
Baltimore, Maryland 21244-1850
SMD# 23-003
RE: Opportunities to Test
Transition-Related Strategies to
Support Community Reentry and
Improve Care Transitions for
Individuals Who Are Incarcerated
April 17, 2023
Dear State Medicaid Director:
The Centers for Medicare & Medicaid Services (CMS) is issuing the following guidance for
designing demonstration projects under section 1115 of the Social Security Act (the Act) (42
U.S.C. § 1315) to improve care transitions for certain individuals who are soon-to-be former
inmates of a public institution (hereinafter referred to as incarcerated individuals, except when
quoting from statute) and who are otherwise eligible for Medicaid. This letter also provides
guidance to interested states about development and submission of the associated section 1115
demonstration application.
This guidance continues to implement section 5032 of the Substance Use-Disorder Prevention
that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT
Act) (Pub. L. No. 115-271), Promoting State Innovations to Ease Transitions Integration to the
Community for Certain Individuals. As mandated in section 5032, the Department of Health and
Human Services (HHS) convened a stakeholder group to develop best practices for states to ease
health care-related transitions for incarcerated individuals to the community and to develop a
Report to Congress (RTC). On December 1, 2022, HHS transmitted the RTC to Congress.
1
Additionally, section 5032 directs the Secretary of HHS, through the Administrator of CMS, to
issue this State Medicaid Director Letter (SMDL) regarding opportunities to design
demonstration projects under section 1115 of the Act to improve care transitions for incarcerated
individuals exiting a public institution and who are otherwise eligible for Medicaid, and to base
this guidance on best practices identified in the RTC.
As provided in section 1115 of the Act, the Secretary of HHS may waive certain provisions of
section 1902 of the Act and/or provide authority for federal matching of expenditures that
otherwise would not be eligible for federal financial participation (FFP) under section 1903 of
the Act, where the Secretary determines that the demonstration project is likely to assist in
promoting the objectives of Medicaid. While CMS reviews every section 1115 demonstration
1
https://aspe.hhs.gov/sites/default/files/documents/d48e8a9fdd499029542f0a30aa78bfd1/health-care-reentry-
transitions.pdf.
Page 2 – State Medicaid Director
application individually and based on its merits, CMS anticipates that a demonstration that
increases access to coverage or covered services for low-income individuals and does not restrict
access to coverage or care, generally will be likely to assist in promoting the objectives of
Medicaid. Demonstrations consistent with the approach described in this guidance will test
innovative approaches to coverage and quality to improve care transitions, starting pre-release,
for individuals who are incarcerated, thereby facilitating improved continuity of care once the
individual is released. Further, improving care transitions will likely help these individuals
access high-quality, evidence-based, coordinated, and integrated care during reentry.
This guidance encourages states to implement an innovative service delivery system to facilitate
successful reentry transitions for Medicaid-eligible individuals leaving prisons and jails and
returning to the community. It is informed by best and promising practices described in the RTC
and offers states an opportunity to apply for demonstration authority to receive FFP for
expenditures for certain pre-release health care services furnished to individuals who are
incarcerated and otherwise eligible for Medicaid. Such expenditures otherwise would not
qualify for FFP, but will receive FFP under this demonstration opportunity to improve care
transitions and increase the likelihood that individuals participating in the demonstration will
access needed care upon release from incarceration. This continuity of care will likely result in
associated improvements in health outcomes. For simplicity, this demonstration opportunity will
be referred to as the “Reentry Section 1115 Demonstration Opportunity” throughout this letter.
Background
2
Incarceration in the United States
The United States has the highest incarceration rate of any country in the world.
3
On any given
day, using the most recently available data, generally from 2020 or 2021, 1.9 million individuals
were incarcerated nationwide in federal and state prisons (facilities for the confinement of
individuals convicted of a serious crime, usually for a sentence over one year in length, or a
felony), local jails (short-term confinement facilities that typically hold individuals awaiting trial
or other proceedings, as well as convicted offenders serving sentences of one year or less) and
other correctional settings.
4,5
Approximately 1.2 million individuals were held in federal or state
2
This document contains links to non-United States Government websites. We are providing these links because
they contain additional information relevant to the topic(s) discussed in this document or that otherwise may be
useful to the reader. We cannot attest to the accuracy of information provided on the cited third-party websites or
any other linked third-party site. We are providing these links for reference only; linking to a non-United States
Government website does not constitute an endorsement by CMS, HHS, or any of their employees of the sponsors
or the information and/or any products presented on the website. Also, please be aware that the privacy protections
generally provided by United States Government websites do not apply to third-party sites.
3
https://www.prisonstudies.org/sites/default/files/resources/downloads/world_prison_population_list_
13th_edition.pdf.
4
https://www.prisonpolicy.org/reports/pie2022.html.
5
Government data on incarcerated individuals has lagged in recent years, an issue made worse by the COVID-19
pandemic (https://www.prisonpolicy.org/reports/pie2022.html), and data are generally limited on the health care
services available in carceral settings, as well as how much prisons and jails spend on that health care. Throughout
Page 3 – State Medicaid Director
prisons as of the end of 2020, and 549,100 were held in local jails as of mid-year 2020.
6,7
In
2020, there was a notable reduction of 15 percent of individuals incarcerated in federal or state
prisons, and a reduction of 25 percent of individuals incarcerated in local jails, that is largely
attributable to COVID-19 delaying court trials and sentencing of individuals.
8,9
A 2020 analysis
of data from 2010 to 2017 showed an increase in the average length of stay in jails to a 26-day
national average, an increase of 22 percent.
10
Increases in length of stay may be attributable to
factors such as high bail costs and individuals who committed more serious crimes staying in
jails longer.
11
A 2021 county-level analysis identified a strong association between jail incarceration and
increases in premature death rates from infectious diseases, chronic lower respiratory disease,
drug use, and suicide.
12
In addition, pregnant women in a carceral system primarily designed for
men bring specific challenges for addressing these women’s health care needs.
13
It is also
noteworthy that from 2011 to 2012, approximately 37 percent of people in state and federal
prisons and 44 percent of people incarcerated in jails had a history of mental illness.
14
A
November 2020 issue brief based on 2017 data identified that individuals who are incarcerated
have higher rates of mental illness and chronic and other physical health care needs, including
hypertension, asthma, tuberculosis (TB), Human Immunodeficiency Virus (HIV), Hepatitis B
and C, arthritis, and sexually transmitted diseases, than the general population.
15
Further,
according to a 2020 report, although the exact rate of substance use disorders (SUD) in
individuals who are incarcerated is difficult to determine, it may be as high as 65 percent in
prisons nationally.
16
In some states, it is even higher. For example, Minnesota reported in 2019
that approximately 90 percent of the state’s incarcerated population had been diagnosed with an
SUD.
17
this SMDL, we have tried to cite the most recently available data on these topics, which, at times, has necessitated
reporting on research and data that were compiled a number of years ago.
6
https://bjs.ojp.gov/content/pub/pdf/p20st.pdf.
7
https://bjs.ojp.gov/library/publications/jail-inmates-2020-statistical-tables.
8
https://bjs.ojp.gov/content/pub/pdf/p20st.pdf.
9
https://bjs.ojp.gov/library/publications/jail-inmates-2020-statistical-tables.
10
https://www.pewtrusts.org/en/research-and-analysis/articles/2020/03/27/why-hasnt-the-number-of-people-in-us-
jails-dropped.
11
https://datacollaborativeforjustice.org/work/confinement/understanding-trends-in-jail-populations-2014-2019-a-
multi-site-analysis/.
12
https://www.publichealth.columbia.edu/public-health-now/news/incarceration-strongly-linked-premature-death-
us.
13
https://jaapl.org/content/early/2020/05/13/JAAPL.003924-
20#:~:text=Incarcerated%20women%20frequently%2[…]20risk,and%20low%20birth%2Dweight%20infants.
14
https://www.bjs.gov/content/pub/pdf/imhprpji1112.pdf.
15
https://www.commonwealthfund.org/publications/issue-briefs/2020/nov/medicaid-role-health-people-involved-
justice-system.
16
https://www.drugabuse.gov/download/23025/criminal-justice-
drugfacts.pdf?v=25dde14276b2fa252318f2c573407966.
17
https://mn.gov/doc/assets/Substance%20Use%20Disorder%20Treatment_tcm1089-413914.pdf.
Page 4 – State Medicaid Director
Health Needs and Outcomes for Justice Involved Individuals Re-Entering the Community
Formerly incarcerated individuals with physical and mental health conditions and SUDs
18
typically have difficulty succeeding upon reentry because of obstacles present immediately at
release, such as high rates of poverty and/or high risk of poor health outcomes.
19
They face
stigma and legal barriers when seeking to obtain housing, education, employment, government
benefits, and health care access, and can be confronted with negative community perceptions and
corresponding lack of support that hinder successful reentry.
20
Additionally, without access to
affordable health care services post-release, individuals who were formerly incarcerated often do
not seek outpatient medical care, including needed SUD or mental health treatment and are at
significantly increased risk for emergency department (ED) use and hospitalization.
21,22
Individuals reentering the community from correctional facilities are also at a greater risk of
overdose death as compared to the general population, especially in the first two weeks post-
release.
23,24
Studies have also concluded that individuals with SUD or substance-related criminal
charges who are reentering the community are at greater risk of criminal re-involvement and
recidivism, underscoring that addressing public health needs may help advance public safety
outcomes.
25,26
People from racial and ethnic minority groups are disproportionately represented among the
carceral population. Black people are incarcerated in state prisons at nearly five times the rate of
white people, and Latino people are incarcerated in state prisons at 1.3 times the rate of non-
Latino white people.
27
The rates of incarceration for Black people in jails from 2010-2019 was
more than three times that of white people.
28
Racial disparities in incarceration further
exacerbate health disparities for Black people, Indigenous people, and people of color upon
release.
29
Individuals who are part of the lesbian, gay, bisexual, transgender, queer, and other sexual
minority (LGBTQ+) community are disproportionately represented in the carceral system.
Individuals who are transgender are incarcerated at a rate of more than twice that of the
18
Throughout the SMDL, we use the term “behavioral health conditions” to encompass mental health conditions
and SUDs.
19
https://www.aafp.org/about/policies/all/incarceration.html.
20
https://www.apa.org/pi/ses/resources/indicator/2018/03/prisons-to-communities.
21
https://bmcemergmed.biomedcentral.com/articles/10.1186/1471-227X-13-16.
22
https://www.aafp.org/about/policies/all/incarceration.html.
23
https://www.kff.org/medicaid/issue-brief/how-connecting-justice-involved-individuals-to-medicaid-can-help-
address-the-opioid-epidemic/.
24
Binswanger I.A., Stern M.F., Deyo R.A., et al. Release from prison--a high risk of death for former inmates. New
England Journal of Medicine, 2007 Jan 11; 356(2):157-165.
25
https://ascpjournal.biomedcentral.com/articles/10.1186/s13722-019-0136-6.
26
https://www.kff.org/medicaid/issue-brief/how-connecting-justice-involved-individuals-to-medicaid-can-help-
address-the-opioid-epidemic/.
27
https://www.sentencingproject.org/publications/color-of-justice-racial-and-ethnic-disparity-in-state-prisons/.
28
https://bjs.ojp.gov/content/pub/pdf/ji19.pdf.
29
https://www.aafp.org/about/policies/all/incarceration.html.
Page 5 – State Medicaid Director
population as a whole, while sexual minorities are incarcerated at a rate of three times that of the
population as a whole.
30
Many people who are LGBTQ+ experience significant discrimination
in carceral settings, which can negatively impact their health and well-being.
31
Additionally, individuals who have communication disabilities, may, upon release, experience
barriers to services. Also, individuals with limited English proficiency face barriers related to
services that are not available in multiple languages.
32
For instance, the Federal Bureau of
Prisons notes that Spanish-speaking women who are incarcerated experienced a barrier to
participating in its trauma program that is currently only available in English.
33,34
Health Needs and Outcomes for Justice Involved Youth
Youth who are incarcerated have a very high incidence of adverse childhood experiences, with
as many as 90 percent of such youth having experienced trauma. They are also at higher risk for
having experienced sexual and physical abuse and for having behavioral health disorders.
35,36
Further, they are often multi-system involved, with a significant overlap between youth in foster
30
https://transequality.org/sites/default/files/docs/resources/TransgenderPeopleBehindBars.pdf.
31
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8430972/.
32
Providers have an obligation to comply with nondiscrimination requirements under various federal civil rights
laws, including Title VI of the Civil Rights Act, Section 504 of the Rehabilitation Act 1973, and Section 1557 of the
Affordable Care Act. Individuals with disabilities are entitled to communication that is as effective as
communication for people without disabilities, including through the provision of auxiliary aids and services. See
45 C.F.R. 84.52(d)(1); 45 C.F.R. 85.51(a); 28 C.F.R. 35.160; 45 C.F.R. 92.102; 28 C.F.R. 35.104. Additionally,
covered entities must take reasonable steps to provide meaningful access to individuals, with limited English
proficiency, including through the provision of interpreting services and translations. See 45 C.F.R. 80 as
interpreted by Lau v. Nichols, 414 U.S. 563 (1974); 45 C.F.R. 92.101; 45 C.F.R. 92.101(b)(2).
33
https://oig.justice.gov/reports/2018/e1805.pdf.
34
Additional resources for supporting language and disability access needs as part of an individual’s reentry to the
community can be found at the following: National Standards for Culturally and Linguistically Appropriate Services
(CLAS) in Health and Health Care: https://thinkculturalhealth.hhs.gov/clas; Guide to Developing a Language
Access Plan: https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Language-Access-Plan-
508.pdf; Providing Language Services to Diverse Populations: Lessons from the Field: https://www.cms.gov/About-
CMS/Agency-Information/OMH/Downloads/Lessons-from-the-Field.pdf; Modernizing Health Care to Improve
Communication Accessibility for Individuals who are Blind or Low-vision:
https://www.cms.gov/files/document/omh-vi sual -sensory-disabilities-brochure-508c.pdf; Modernizing Health Care
to Improve Communication Accessibility for Individuals Who Are Deaf or Hard of Hearing:
https://www.cms.gov/files/document/audio-sensory-disabilities-brochure-508c.pdf; Modernizing Health Care to
Improve Physical Accessibility Primer for Providers:
https://www.cms.gov/files/document/cmsmodernizinghealthcare.pdf; Resource Inventory:
https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH-Modernizing-Health-Care-
Physical-Accessibility.pdf; Plans, providers, and state/local governments may find the following resource to be
helpful:
https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Issue-Brief-Physical-
AccessibilityBrief.pdf.
35
Baglivio M, Epps N, Swartz K, Huq M, Sheer A, Hardt N. The prevalence of adverse childhood experiences
(ACE) in the lives of juvenile offenders. Journal of Juvenile Justice, 2014; 3(2):1-23.
36
Underwood L.A., Washington A. Mental Illness and Juvenile Offenders. International Journal of Environmental
Research and Public Health, 2016 Feb 18; 13(2):228.
Page 6 – State Medicaid Director
care and those involved in the juvenile justice system. Depending on how broadly multi-system
involvement is defined, it is possible that as high as 50 percent of youth referred to the juvenile
justice system are also involved with the child welfare system.
37
The length of stay in youth
correctional facilities is typically short, with a median period of 64 days in 2019.
38
Like adult
carceral facilities, youth correctional facilities are variable in terms of health care provided, from
very robust and comprehensive care to limited care.
39
As with adults in the carceral system,
there is a disproportionate rate of incarceration for youth of color.
40
Linkages to care for youth who move between the correctional and foster care systems are
extremely important to promote continuity of care and treatment, particularly for youth with
mental health needs and SUD. Providing screening for physical and behavioral health needs
while incarcerated and facilitating linkages to physical and behavioral health care in the
community will support youth who are incarcerated in transitioning more successfully back to
the community.
41
Emerging research shows that youth do better emotionally, physically, and
educationally when placed in home-based family settings and the use of more restrictive
congregate care placements are limited, when possible and appropriate.
42,43
Attachment
disruptions from primary caregivers may underlie some youths’ mental health issues; thus,
studies have shown that it is fundamental to incarcerated youths’ mental health and well-being to
build strong relationships with a caregiver.
44
Correctly diagnosing SUD in youth is critical and
may be complicated by youth self-medicating for emerging mental health symptoms/disorders,
such as anxiety and depression, in order to “fit in” with peers and avoid stigma associated with
having mental health needs.
45
Female youth who are incarcerated have higher rates of
unintended pregnancies than same-age peers, so providing family planning services is critical as
well.
46
37
Thomas D., Siegel G., Wachter A., Deal T., Rackow A., Vessels L., Halemba G., Hurst H. When Systems
Collaborate: How Three Jurisdictions Improved their Handling of Dual-Status Cases. Pittsburgh, PA. National
Center for Juvenile Justice; 2016. Available at:
http://www.ncjj.org/pdf/Juvenile%20Justice%20Geography,%20Policy,%20Practice%20and%20Statistics%202015/
WhenSystemsCollaborateJJGPSCaseStudyFinal042015.pdf.
38
https://www.ojjdp.gov/ojstatbb/corrections/qa08405.asp?qaDate=2019.
39
Gallagher C.A., Dobrin A. Can Juvenile Justice Detention Facilities Meet the Call of the American Academy of
Pediatrics and National Commission on Correctional Health Care? A National Analysis of Current Practices.
Pediatrics, 2007 Apr; 119(4):991-1001.
40
Developmental Services Group, Inc. Disproportionate Minority Contact. Washington, DC: Office of Juvenile
Justice and Delinquency Prevention, Office of Justice Programs, US Department of Justice; 2014. Available at:
https://www.ojjdp.gov/mpg/litreviews/Disproportionate_Minority_Contact.pdf.
41
American Academy of Pediatrics. Health Care for Youth in the Juvenile Justice System. Pediatrics, 2011;
128(6):1219–1235. Available at: https://publications.aap.org/pediatrics/article/128/6/1219/31060/Health-Care-for-
Youth-in-the-Juvenile-Justice.
42
https://theacademy.sdsu.edu/wp-content/uploads/2016/03/alternatives-congregate-care-feb-2016.pdf.
43
Children’s Bureau (2015). A National Look at the Use of Congregate Care in Child Welfare. Retrieved from:
https://www.acf.hhs.gov/sites/default/files/documents/cb/cbcongregatecare_brief.pdf.
44
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6703996/.
45
https://childmind.org/article/mental-health-disorders-and-substance-use/#full_article.
46
https://childsafety.losangelescriminallawyer.pro/juvenile-delinquency-and-teen-pregnancy.html.
Page 7 – State Medicaid Director
Health Care in Carceral Settings
All carceral authorities are constitutionally obligated to provide needed health care for inmates in
their custody, regardless of the carceral setting (i.e., local or state jail, state or federal prison).
However, the provision of health care within carceral systems is widely variable. The standard
of adequate care
47
may be defined at the state, county, or facility level. Even initial health care
screenings and provision of life-sustaining or life-prolonging services are implemented very
differently across states, counties, and facilities.
48
Despite the high rates of chronic physical and
mental illnesses and SUD among individuals who are incarcerated, access to health care services
in prisons and jails can be limited. In 2017, of the 5,100 prisons and jails in the United States,
fewer than 30 offered methadone or buprenorphine, two common, safe, and effective medication
assisted treatment (MAT) medications for SUD.
49
Health care in a carceral environment varies
in practice in almost every way, including the services provided (e.g., assessment; care
management; and delivery of preventive, acute, or palliative care), setting (e.g., availability of
onsite care, coordination of services while in custody), the providers who render services (e.g.,
contracted vendors or state agency staff), as well as the number and type of licensed and
unlicensed professionals per facility (e.g., enrollment status in the state Medicaid program,
registry in the National Plan and Provider Enumeration System), or state scope of practice and
provider prescribing authority. This variation leaves some carceral settings only providing the
most basic care for acute illnesses and injuries.
The costs of health care provided to individuals who are incarcerated also vary widely. In 2015,
the typical state spent $5,700 annually on health care services for an individual incarcerated in a
state prison, with California spending the most on health care at approximately $20,000 per
individual per year, and Louisiana spending the least at $2,100 per individual per year.
50
While data are available on the costs of health care provided in state prisons, data about health
care costs in jails are not readily accessible.
51
Local jail funding may be derived from a
patchwork of local governmental agencies and sources, and these revenue streams are not always
reflected in jails’ operating budgets and public disclosures. Further, disaggregating the portion
of the jail funding dedicated to health care is made more complicated by lack of clarity around
the full costs to operate jails. A 2015 survey of jails indicated that anywhere from 1 percent to
more than 53 percent of total jail costs were paid by another government agency, and a majority
of these costs, which were outside of jail budgets, tend to be for employee benefits and health
care for incarcerated individuals.
52
47
In Estelle v. Gamble, 429 U.S. 97 (1976), the Court stated that the government has an obligation to provide
medical care for those whom it is punishing by incarceration, and that deliberate indifference to serious medical
needs of prisoners is proscribed by the Eighth Amendment’s prohibition of cruel and unusual punishment.
48
https://www.ojp.gov/pdffiles1/nij/grants/189735.pdf.
49
https://store.samhsa.gov/sites/default/files/d7/priv/pep19-matusecjs.pdf.
50
https://www.pewtrusts.org/en/research-and-analysis/articles/2017/12/15/prison-health-care-spending-varies-
dramatically-by-state.
51
https://www.vera.org/downloads/publications/price-of-jails.pdf.
52
https://www.vera.org/downloads/publications/price-of-jails.pdf.
Page 8 – State Medicaid Director
The average overall annual cost of holding a person in jail in 2017 was about $34,000, according
to a 2021 report.
53
In comparison, the average annual cost of holding a person in a state prison
in 2020 was roughly $31,580
54
, and the average annual cost of holding a person in a federal
facility in 2020 was $39,158.
55
The portion of a jail’s budget spent on health care can vary
widely by county even within the same state, such as in Virginia, where local jails spend
anywhere from 2.5 to 33 percent of their budgets on health care.
56
Although health expenses for
incarcerated individuals are often paid through a jail budget, about half of the reporting jails in a
2015 survey indicated that another county agency paid at least a portion of an incarcerated
individual’s medical costs and that this practice is most prevalent in large counties.
57
The
aforementioned information points to the inadequacy and variability of available data on jail-
related health care expenditures. The data on health care spending in both jails and prisons also
highlights the disparities in health care investments, depending on the state and/or the local
jurisdiction in which an individual is incarcerated.
There is also limited information on the availability of health care services in carceral settings
and insufficient information on the quality of those services. Further, little beyond anecdotal or
isolated local data are available regarding the transition process for individuals, including youth,
exiting the carceral system and linkages with health care services in the community. Data on
necessary elements for a successful transition are not readily available, particularly related to
jails where people may cycle in and out relatively rapidly, with little time for transition planning.
Medicaid Eligibility in Carceral Settings
Incarceration status does not render an individual ineligible for Medicaid, as it is not a factor of
eligibility. Individuals who are held involuntarily in a public institution may be eligible for and
enrolled in Medicaid, but federal Medicaid funds may not be used to pay for services for such
individuals while they are incarcerated, except when they are inpatients in a medical institution
as provided in paragraph (A) following the last paragraph of section 1905(a) of the Act,
hereinafter referred to as the inmate payment exclusion. Qualifying inpatient stays would be in
facilities, such as hospitals, nursing homes, psychiatric residential treatment facilities or other
medical institutions for an expected duration of 24 hours or more
58
, in which there is an
admission of the individual to the facility as an inpatient. In 2016, CMS provided guidance to
states regarding facilitating access to covered Medicaid services during and after a stay in a
53
https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2021/01/local-spending-on-jails-tops-$25-billion-
in-latest-nationwide-
data#:~:text=The%20average%20annual%20cost%20of,capital%20challenges%20to%20local%20budgets.
54
https://nicic.gov/state-statistics/2020/2020-national-averages.
55
https://www.federalregister.gov/documents/2021/09/01/2021-18800/annual-determination-of-average-cost-of-
incarceration-fee-coif.
56
https://www.pewtrusts.org/en/research-and-analysis/reports/2018/01/jails-inadvertent-health-care-providers.
57
https://www.vera.org/downloads/publications/price-of-jails.pdf.
58
42 CFR 435.1010 Definitions relating to institutional status and
https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/sho16007.pdf.
Page 9 – State Medicaid Director
correctional institution, including states’ authority to suspend, rather than terminate Medicaid
eligibility for individuals who are incarcerated. Suspending rather than terminating eligibility
maintains enrollment for Medicaid-eligible individuals who become incarcerated, while
complying with the inmate payment exclusion.
59
Since then, section 1001 of the SUPPORT Act
prohibited states from terminating Medicaid eligibility for eligible juveniles.
60
Suspending
rather than terminating an individual’s Medicaid coverage during incarceration facilitates timely
reinstatement of coverage upon release from a public institution. Timely reinstatement of
coverage upon release from incarceration directly impacts when care is received and is a
contributing factor for early identification of treatable medical conditions, continuity of care,
reduction of medical crises, and mortality, and ensuring individuals who were incarcerated have
the resources required for successful reentry into the community.
61,62
For states that adopted the Affordable Care Act’s Medicaid expansion for the adult group, most
incarcerated individuals are eligible for Medicaid. Many states are seeking to put in place
policies and processes to ensure that Medicaid-eligible individuals are enrolled prior to release
and able to receive Medicaid-covered benefits and services as quickly as possible after release.
63
States that maintain enrollment during incarceration with suspended coverage also use this
strategy to facilitate claiming of FFP in expenditures for services provided to incarcerated
beneficiaries while they are inpatients in a medical institution.
64
Summary of Section 5032 Stakeholder Group Meeting and Report to Congress on Best
Practices
On August 20, 2021, HHS convened a meeting of a federal advisory committee established
under section 5032 of the SUPPORT Act. This group included representatives from 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, as required by the statute. The group did not produce consensus recommendations.
Rather, stakeholders identified promising practices, as well as areas for consideration, to promote
seamless transitions to the community and inform CMS’ development of the required SMDL and
Reentry Section 1115 Demonstration Opportunity. The stakeholder input also provided insight
on reentry planning for individuals in the carceral system.
59
See April 28, 2016, State Health Official Letter # 16-007 “RE: To Facilitate successful reentry for individuals
transitioning from incarceration to their communities” found at https://www.medicaid.gov/federal-policy-
guidance/downloads/sho16007.pdf and January 19, 2021, State Medicaid Director Letter # 21-002 “RE:
Implementation of At-Risk Youth Medicaid Protections for Inmates of Public Institutions (Section 1001 of the
SUPPORT Act) found at https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21002.pdf.
60
https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21002.pdf.
61
https://counciloncj.org/issue-brief-1/.
62
https://counciloncj.org/harp-issue-brief-2/.
63
https://www.commonwealthfund.org/publications/issue-briefs/2019/jan/state-strategies-health-care-justice-
in vol ved-role-
medicaid#:~:text=Medicaid%20expansion%20makes%20most%20individuals,is%20effective%20prior%20to%20re
lease.
64
https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/08/how-and-when-medicaid-covers-people-
under-correctional-supervision.
Page 10 – State Medicaid Director
The RTC, which was informed by the section 5032 stakeholder group feedback, identified
challenges related to the transition of individuals reentering the community. These challenges
include individuals receiving needed health care when there are competing needs for other social
supports, continuity of care, access to care including access to post-release MAT, stigma, and
understanding the scope of covered benefits and costs, among others. The RTC noted that
prisons, jails, and health care providers face challenges in data sharing and cross-systems
communication and coordination for transitioning individuals. Additionally, the RTC describes
how sharing information on the health care provided during incarceration with community-based
clinics, physicians, and other providers can be an important part of treating chronic illnesses and
behavioral health conditions, because it allows for treatment continuity, reduces duplicative care,
and facilitates communication about the individual’s health needs. The report also describes data
sharing challenges between correctional systems and state Medicaid agencies, as well as
managed care organizations, that include additional non-health data such as anticipated or
updated release dates and reentry information, and Medicaid enrollment. The RTC further
describes best and promising practices for health care, eligibility, enrollment, and coverage-
related practices, and key considerations for a section 1115 demonstration opportunity.
CMS considered the feedback and insight provided by stakeholders in the design of this Reentry
Section 1115 Demonstration Opportunity.
Reentry Section 1115 Demonstration Opportunity
As noted above, section 1115(a) of the Act authorizes the Secretary of HHS to waive certain
statutory provisions and to match expenditures that otherwise would not qualify for federal
matching in order to permit states to conduct experimental, pilot, or demonstration projects that,
in the judgment of the Secretary, are likely to assist in promoting the objectives of title XIX of
the Act. While CMS will consider each section 1115 demonstration application on its own
merits, the Reentry Section 1115 Demonstration Opportunity discussed in this SMDL is intended
to help states submit proposals that would advance the goals of the Medicaid statute to provide
medical assistance to vulnerable and low-income populations and ensure high quality care for
communities and populations served. States are encouraged to submit applications for
demonstrations that would test innovative practices that are likely to assist in promoting the
objectives of Medicaid. In this demonstration opportunity, states may provide coverage for
certain Medicaid services to incarcerated individuals who are soon to be released from
incarceration, consistent with the statutory directive in section 5032 of the SUPPORT Act.
While states’ applications may propose to make certain carceral health care services that are
currently paid exclusively with state and/or local dollars eligible for FFP, the Reentry Section
1115 Demonstration opportunity is not intended to shift current carceral health care costs to the
Medicaid program. Section 5032(b) of the SUPPORT Act makes clear that the purpose of this
demonstration opportunity is “to improve care transitions for certain individuals who are soon-
to-be former inmates of a public institution and who are otherwise eligible to receive medical
assistance under title XIX.” This demonstration opportunity does not absolve carceral
authorities of their constitutional obligation to ensure needed health care is furnished to inmates
in their custody and is not intended as a means to transfer the financial burden of that obligation
from a federal, state, or local carceral authority to the Medicaid program. Accordingly, CMS
Page 11 – State Medicaid Director
does not expect to approve state proposals to receive federal Medicaid matching funds through
the Reentry Section 1115 Demonstration Opportunity for any existing carceral health care
services that are currently funded with state and/or local dollars unless states agree to reinvest the
total amount of new federal matching funds received for such services under the demonstration
into activities and/or initiatives that increase access to or improve the quality of health care
services for individuals who are incarcerated (including individuals who are soon-to-be released)
or were recently released from incarceration, or for health-related social services that may help
divert individuals from criminal justice involvement. Consistent with this expectation, states will
need to commit at the time of the demonstration approval to a reinvestment plan, and will
develop and submit the plan for CMS approval during the post-approval period. The plan will
outline how the federal matching funds under the demonstration will be reinvested throughout
the demonstration period.
Additional information regarding the reinvestment plan requirements
are provided on pages 32-33.
In general, to meet the statutory purpose of improving care transitions for soon-to-be released
incarcerated individuals who are otherwise eligible for coverage, 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 this population, with the aims of improving
health outcomes and reducing ED visits and inpatient hospital admissions for both physical and
behavioral health (mental health and SUD) issues once they are released and return to the
community. A brief summary of the Reentry Section 1115 Demonstration Opportunity expected
features, described in detail below, is provided in Appendix 1.
Overarching Demonstration Goals
CMS expects that demonstration applications for the Reentry Section 1115 Demonstration
Opportunity will address the following goals:
• 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 (HRSN);
65
• Reduce all-cause deaths in the near-term post-release; and
65
As discussed in a letter to State Health Officials issued on January 7, 2021, https://www.medicaid.gov/federal-
policy-guidance/downloads/sho21001.pdf, addressing Social Determinants of Health can more effectively improve
population health, reduce disability, and lower overall health care costs in the Medicaid program. While “social
determinants of health” is a broad term that relates to the health of all people, HRSN relates more specifically to an
individual’s adverse conditions reflecting needs that are unmet and contribute poor health.
Page 12 – State Medicaid Director
• 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.
Quality and Health Equity
Health equity means the attainment of the highest level of health for all individuals, where
everyone has a fair and just opportunity to attain their optimal health regardless of race,
ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography,
preferred language, or other factors that affect access to care and health outcomes.
66
The Reentry Section 1115 Demonstration Opportunity supports CMS’ vision to serve the public
as a trusted partner and steward, dedicated to expanding coverage, advancing quality and health
equity, and improving health outcomes. By design, this Reentry Section 1115 Demonstration
Opportunity focuses on providing coverage for high-quality services furnished to certain
incarcerated individuals, a group of individuals who have been historically underserved,
marginalized, and adversely affected by persistent poverty and inequality. States’ demonstration
designs should be cognizant of and include proposed approaches for improving quality of
coverage and care for all Medicaid demonstration beneficiaries, thereby reducing disparities and
improving health equity for eligible Medicaid beneficiaries.
Based on the recommendations in the RTC, CMS strongly encourages states contemplating
submitting a demonstration application to engage individuals with lived experience who were
formerly incarcerated in both the design and implementation of a state’s Section 1115 Reentry
Demonstration proposal. Inclusion of people with lived experience has been identified as an
important feature by the section 5032 stakeholder group, gathering practical insight and
perspective that recognizes the voices of those who could be served by the demonstration. Such
engagement increases the potential for this section 1115 demonstration opportunity to improve
care transitions and quality of care to best meet individuals’ needs, regardless of their
backgrounds or circumstances.
Breadth of Carceral Settings
Section 5032 of the SUPPORT Act makes no distinction between incarcerated individuals
exiting federal, state, and local prisons and jails. The Reentry Section 1115 Demonstration
Opportunity offers flexibility to states to provide coverage for certain pre-release services
furnished to individuals in state and/or local jails, prisons, and/or youth correctional facilities.
The types of carceral settings included, e.g. state prisons, local jails, etc., as well as limitations
relating to the ability of individual carceral facilities in the state to participate, are at the state’s
discretion to propose. States may outline a phased approach to adding additional carceral
facilities throughout the life of the proposed demonstration.
When an individual is incarcerated in a federal prison, the federal Bureau of Prisons (BOP) is
responsible for providing and paying for all physical and behavioral health care. Federal
66
https://www.cms.gov/pillar/health-equity.
Page 13 – State Medicaid Director
prisoner health care costs are the responsibility of a federal agency and not the state in which the
federal prison is located. Additionally, since many federal prisoners are incarcerated outside of
their home state, they often will need to apply for and enroll in Medicaid in a different state than
where they are incarcerated in order to ensure coverage upon release. States may process
applications from incarcerated individuals, prior to release, who apply for Medicaid coverage in
the state in which they will reside, with the effective date of eligibility the date the individual
arrives in their state of residence. CMS encourages state Medicaid agencies to assist individuals
who are incarcerated in federal prisons in their states by directing them to Medicaid application
information for the state in which they intend to reside upon release so that federal prison social
workers can help federal prisoners submit a Medicaid application prior to release. CMS expects
states to refrain from including federal prisons as a setting in which demonstration-covered pre-
release services are provided under the demonstration, given the existing role of BOP, as another
federal agency, in providing and paying for all health care for federal prisoners during
incarceration.
Eligible Individuals
The SUPPORT Act indicates that this demonstration opportunity includes “certain individuals
who are soon to-be former inmates of a public institution and who are otherwise eligible to
receive medical assistance under title XIX[.]”
The section 5032 stakeholder group recommended that the individuals eligible for demonstration
coverage should include individuals who are incarcerated with a broad array of chronic health
conditions that may be related to physical and/or behavioral health. Available data indicate that
individuals incarcerated in jails and prisons have a higher likelihood of having a wide variety of
chronic conditions, including but not limited to behavioral health conditions such as SUD and/or
mental illness.
67
Further, lack of treatment for these chronic conditions often leads to poor
health outcomes and more frequent ED and inpatient hospital use post-release.
CMS encourages states interested in the Reentry Section 1115 Demonstration Opportunity to
propose a broadly defined demonstration population that includes otherwise eligible, soon-to-be
former incarcerated individuals. States have the flexibility to target the population(s) covered by
the demonstration, for example, to individuals with specific conditions, and should establish
identification criteria. As states develop criteria and processes for identification of individuals
who may be included in the Reentry Section 1115 Demonstration Opportunity, including those
with specific conditions, states should be mindful of establishing identification criteria for
individuals who may have a condition that is currently undiagnosed.
Medicaid Eligibility and Enrollment
Section 5032(b)(1) requires that the demonstration opportunity provide “assistance and education
for enrollment under a State plan under the Medicaid program[.]” Consistent with this provision,
in order to ensure individuals are able to access services in the period in which pre-release
demonstration services are available, demonstration states should work with their correctional
67
https://bjs.ojp.gov/content/pub/pdf/mpsfpji1112.pdf.
Page 14 – State Medicaid Director
facility partners to start the application process and assist incarcerated individuals who are not
already enrolled in Medicaid to apply for Medicaid upon the individual’s incarceration,
throughout the period of incarceration and no later than 45 days before the individual’s expected
date of release. In addition, section 5032(c) clarifies that nothing under title XIX of the Act or
any other provision of law precludes a state from reclassifying or suspending (rather than
terminating) the eligibility of an individual for medical assistance under title XIX of the Act
while such individual is an inmate of a public institution.
CMS expects that demonstration states will make pre-release outreach well in advance of the 30-
day pre-release period, along with eligibility and enrollment support, available to all individuals
incarcerated in the facilities in which the demonstration is functioning. Without outreach and
support to assist all interested individuals to apply for Medicaid coverage or renewal, it is
generally not possible to assess who “may be eligible” for Medicaid and limit outreach and
enrollment support to a subset of individuals who are incarcerated.
Consistent with CMS’ priority to expand access to “quality, affordable health coverage and
care”
68
and the recommendation of the section 5032 stakeholder group, CMS does not expect to
approve a Reentry Section 1115 demonstration unless the state suspends, rather than terminates,
an individual’s Medicaid eligibility, when an individual becomes incarcerated for the duration of
their incarceration. Ensuring enrollment in health coverage is an essential component of
improving care transitions between carceral settings and the community. A straightforward
strategy to better ensure enrollment for newly released, Medicaid-eligible individuals is to adopt
a suspension approach, instead of termination, so the individual does not have to submit a new
application upon release. The state’s priority in implementing a suspension strategy is to support
maintenance of enrollment for Medicaid beneficiaries. Consistent with that goal, CMS
encourages states to submit applications that describe alternative policies and procedures to
ensure that only allowable benefits are covered and paid for during incarceration while also
providing coverage and payment for full benefits as quickly as possible upon release. While
recognizing the importance of suspension (rather than termination), we understand that some
states that are not currently using a suspension approach will need time and resources to modify
systems to make changes to their eligibility and enrollment systems. Therefore, depending on a
state’s readiness and its demonstration proposal, we will offer a glide path of up to two years
from demonstration approval for the state to make system changes to effectuate eligibility/benefit
suspension. A state may request CMS approval for a 90/10 enhanced federal matching rate for
the design, development, and implementation of certain Medicaid systems (or improvements to
such systems) to support eligibility determinations and enrollment (including suspension
strategies).
CMS previously released sub-regulatory guidance that outlines permissible suspension strategies,
including benefits and eligibility suspension approaches, and how a state may effectuate these
68
https://www.cms.gov/cms-strategic-plan.
Page 15 – State Medicaid Director
suspension approaches.
69,70
Under a benefits suspension, an eligible individual continues to be
enrolled in Medicaid, but Medicaid coverage is limited to services furnished to the individual
while admitted to a medical institution for at least a 24-hour inpatient stay,
71
in accordance with
the inmate payment exclusion. One way to effectuate a benefits suspension is for the state to
make edits in their Medicaid Management Information System (MMIS) to limit payable benefits
to only services furnished while the beneficiary is an inpatient, for the duration of the
incarceration.
The eligibility suspension strategy involves the state suspending the individual’s eligibility so
that they are no longer eligible to receive Medicaid benefits for the duration of the incarceration;
the state must lift an eligibility suspension when an eligible incarcerated person becomes an
inpatient in a medical institution so that Medicaid may pay for services furnished to the
beneficiary as an inpatient, which are not subject to the inmate payment exclusion.
72
There are
several ways a state can effectuate an eligibility suspension. States may make eligibility systems
edits to place the individual in a “suspended” eligibility status or the state may make MMIS edits
to place the individual in a “no pay” or other status that ensures claims are not paid for the
eligible individual. If an individual is determined eligible for Medicaid while incarcerated and
the individual otherwise satisfies the definition of an eligible individual, the state must treat this
individual as it would an eligible individual who was enrolled in Medicaid at the time of
incarceration and place the individual in a suspended eligibility or benefits status, except during
periods when the individual is an inpatient in a medical institution, as discussed above.
Recognizing the brief timeframe that some individuals will remain in jail and the potential
uncertainty about when they will leave, presumptive eligibility (PE) can be a useful tool for
quickly connecting individuals with coverage for a temporary period of time. CMS encourages
states to consider utilizing PE for individuals who are anticipated to have short-term stays and
enroll individuals who are likely eligible under a state’s Medicaid eligibility guidelines for a
temporary period of time. Permitting local jails and prisons to serve as qualified entities would
allow them to make determinations of PE prior to a person’s release, providing immediate access
to health coverage upon reentry while the individual applies for Medicaid or waits to learn if they
qualify for Medicaid. While states may not require an individual to fill out a full Medicaid
application to receive a PE determination or before a PE period begins, individuals should be
informed that filing a full Medicaid application is necessary for coverage to continue, and states
may require that local jails or prisons serving as qualified entities assist individuals determined
presumptively eligible in completing a full Medicaid application during the PE period prior to
release. For individuals with longer-term stays, it is preferable for states to work with their
correctional facility partners to assist individuals who are not already enrolled in Medicaid to
apply for Medicaid no later than 45 days prior to the individual’s expected date of release.
69
https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/sho16007.pdf.
70
https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21002.pdf.
71
42 C.F.R. § 435.1010.
72
When a state effectuates an eligibility suspension, a state is not required to conduct regular annual renewals or
redetermine eligibility based on changes in circumstances. If a state is not conducting regular annual renewals or
determining eligibility based on changes in circumstances while eligibility is suspended, the state may need to
complete a renewal or redetermination at the time an inmate becomes an inpatient.
Page 16 – State Medicaid Director
Scope of Health Care Services
Section 5032 does not define the scope of health care services to be provided to demonstration-
eligible individuals prior to release through the section 1115 demonstration opportunity. The
section 5032 stakeholder group recommended including sufficient services in the demonstration
opportunity to promote successful health care transitions. Stakeholders had differing
perspectives on how broad the pre-release package of covered services should be, particularly
given that incarcerated individuals often lack access to needed health care services in carceral
settings. Some section 5032 stakeholder group members thought that broad Medicaid coverage
(e.g., coverage for full state plan benefits) was necessary to provide needed health care that may
not be provided adequately or at all by the carceral system. Other members thought the coverage
should focus on the services necessary to transition people to care in the community once out of
prisons and jails and should not supplant the obligations of prisons and jails to provide needed
health care. Still other members highlighted the importance of providing supports to address
HRSN, such as bridge housing assistance and employment supports, noting that without support
to obtain housing and a job, it is difficult for individuals returning to the community to address
their underlying health issues.
With the wide variation in section 5032 stakeholder group members’ perspectives about an
appropriate pre-release benefit package and the respective roles and responsibilities of the
Medicaid program and carceral system regarding health care, CMS anticipates that interested
states may propose a range of benefit designs in their applications for the Reentry Section 1115
Demonstration Opportunity. However, CMS expects that state proposals for benefit designs will
be sufficiently robust to be likely to improve care transitions as contemplated in section 5032 of
the SUPPORT Act and as discussed in this letter, including by covering at least the minimum set
of pre-release services discussed below.
The goal of the pre-release benefit package design is to support the proactive identification of
both physical and behavioral health needs and develop a plan to address health and HRSN for
soon-to-be released incarcerated individuals who otherwise meet Medicaid eligibility criteria and
Reentry Section 1115 Demonstration Opportunity eligibility criteria. The benefit package,
therefore, should promote coverage and quality of care to improve transitions for individuals
being released from jails or prisons and returning to their communities. It should also address
the overarching demonstration goals described above, which were informed by available
research and the section 5032 stakeholder group and are discussed in greater detail in the RTC.
While states may propose to exceed the minimum benefit package described below, states should
collaborate with their participating carceral facilities to ensure the feasibility of providing all
proposed benefits in the state’s benefit package to incarcerated beneficiaries, which provide
stabilizing services that will enhance public health outcomes and support reentry.
CMS recognizes that many individuals exiting prison and jail systems, including youths, may not
have received sufficient health care to address all of their physical and/or behavioral health care
needs while incarcerated; however, 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. Therefore, the demonstration benefit package should be
designed to improve identification of health and HRSN and connection to providers with the
Page 17 – State Medicaid Director
capacity to meet those needs in the community, during the period immediately before the
individual’s expected release. Demonstration-covered services also may help improve the health
of demonstration beneficiaries prior to reentry, support improved health outcomes upon release,
and increase the likelihood of a successful transition to the community. Once beneficiaries are
released, the coverage for which the individual is otherwise eligible must be provided consistent
with all requirements applicable to such coverage.
Minimum Benefits for the Reentry Section 1115 Demonstration Opportunity
As part of the Reentry Section 1115 Demonstration Opportunity, CMS does not expect to
approve a state’s proposal unless the pre-release benefit package includes at least: 1) case
management to assess and address physical and behavioral health needs and HRSN; 2) 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
73
, provided to the beneficiary immediately upon release from the correctional
facility. States may propose to cover these benefits under the demonstration or describe to CMS
in the demonstration application how the state otherwise ensures that they will be provided to
eligible beneficiaries, such as, through the state plan immediately upon release (e.g., 30-day
supply of prescription medications), through another state-only program or by the carceral
system directly (e.g., MAT).
It is important to note that, to the extent the state chooses to provide prescribed drug coverage
under demonstration authority in a manner that would provide less coverage for prescribed drugs
than under the optional Medicaid benefit described at section 1905(a)(12), consistent with
sections 1902(a)(54) and 1927 (the Medicaid Drug Rebate Program), the state may not seek
federal nor supplemental state specific rebates under section 1927 of the Act for any of the pre-
release drugs provided under the demonstration. This would apply to MAT drugs and the 30-day
supply of medications upon release (as clinically appropriate based on the medication dispensed
and the indication), if those drugs are covered through section 1115 expenditure authority prior
to the individual formally being released from incarceration, as well any additional pre-release
covered outpatient drugs, such as hepatitis C drugs. Therefore, in order for states to be permitted
under this demonstration opportunity to seek rebates, they must include all covered outpatient
drugs pre-release and meet the Medicaid Drug Rebate program section 1927 requirements.
States may include utilization management tools consistent with their approved Medicaid state
plan.
As noted in the background section of this letter, compared to the general population, individuals
who are incarcerated have a higher incidence of chronic physical and behavioral health
conditions and disease burden, including high blood pressure, asthma, cancer, arthritis, and
73
The 30-day supply of prescription medications should be dispensed as clinically appropriate based on the
medication and the indication.
Page 18 – State Medicaid Director
infectious diseases, such as tuberculosis, hepatitis C, and HIV, to name a few.
74
Youth
incarceration is independently associated with worse adult physical and mental health.
75
CMS
strongly encourages states to cover pre-release services, such as family planning services and
supplies for both men and women, and screening for common health conditions within the
incarcerated population, such as blood pressure, diabetes, Hepatitis C, and HIV.
Benefit #1: Case Management to Assess and Address Physical and Behavioral Health Needs,
and HRSN
Case management is expected to be a major component in the Reentry Section 1115
Demonstration Opportunity and should be provided to all beneficiaries in the demonstration. As
stakeholders emphasized in the RTC, case management is a lynchpin for the successful transition
of reentering individuals. Medicaid case management facilitates services that assess and meet an
individual’s health needs, including behavioral health needs and HRSN.
76
Case management services include the following activities: 1) comprehensive assessment and
periodic reassessment of individual needs, to determine the need for any medical, educational,
social, or other services; 2) development (and periodic revision) of a specific care plan based on
the information collected through the assessment; 3) referral and related activities (such as
scheduling appointments for the individual) to help the eligible individual obtain needed
supportive and stabilizing services, including activities that help link the individual with medical,
social, and educational providers or other programs and services that are capable of providing
needed services to address identified needs and achieve goals specified in the care plan; and 4)
monitoring and follow-up activities, including activities and contacts that are necessary to ensure
that the care plan is effectively implemented and adequately addresses the needs of the eligible
individual and which may be with the individual, family members, service providers, or other
entities or individuals and conducted as frequently as necessary.
77
Case management assists
individuals in getting connected to services and providers, not only for physical and behavioral
health needs, but also for HRSN. For instance, if the state includes youth and/or youth
correctional facilities in the demonstration, a case manager might also work with state children
and youth agencies for children who are involved with the foster care system.
Pre-release case management is expected to actively build a bridge to post-release Medicaid
services, addressing needs beyond merely identifying and listing out potential services and
resources. The pre-release case manager is expected to connect individuals to needed services
by setting up appointments with post-release community providers and ensuring a warm hand-off
to the post-release case manager, if different, for follow up on receipt of services once the
individual is released from incarceration.
74
https://health.gov/healthypeople/priority-areas/social-determinants-health/literature-
summaries/incarceration#:~:text=Studies%20have%20shown%20that%20when,%2C%20hepatitis%20C%2C%20an
d%20HIV.
75
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5260153/.
76
https://www.cms.gov/Regulations-and-
Guidance/Legislation/DeficitReductionAct/downloads/moratoriumsummary.pdf.
77
https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-440/subpart-A/section-440.169.
Page 19 – State Medicaid Director
Case managers are not expected to provide services to a particular individual on a daily basis
throughout the entire pre-release period during which a beneficiary is receiving demonstration
coverage. Instead, case managers should use that period of time to develop a connection with the
individual, assess their needs, plan effectively for any Medicaid or demonstration-covered
services and supports that the reentering individual may receive on a pre-release basis, and
arrange for any covered services that the beneficiary may need post-release (including
scheduling initial post-release appointments with providers, as appropriate). Building trust
between case managers and their clients occurs over time and through learning about the
incarcerated individual’s lived experience prior to and during incarceration, as well as aspirations
for and obstacles to their clients’ future success upon release back into the community.
A key function of the case manager is to perform a comprehensive assessment by gathering and
assimilating information from an array of sources, likely documented in multiple systems and
across different formats, to ascertain the health needs of an individual who is incarcerated. The
assessment may include any past medical history, medical records, assessments, screenings,
diagnostic services, information available from the corrections system, interviews with the
individual, and information from health plans, state Medicaid agencies and providers, or other
sources that may be available to the case manager.
78
Another key function of the case manager is the incorporation of the information from the
comprehensive assessment into an actionable person-centered care plan that engages the
individual at the center of decision making. States may need to work with their correctional
agency partners to establish agreements to share data and information to facilitate the ability of
the case manager to effectively create a person-centered care plan and to successfully make
connections to enable the beneficiary to obtain needed services both pre- and post-release. The
person-centered care plan should encompass all needs related to physical and behavioral health,
and primary and specialty treatment to be provided either pre-release, or post-release in the
community. This includes addressing in the person-centered care plan, as appropriate, family
planning services and supplies for both men and women, and screening and lab work for
common health conditions (blood pressure, diabetes, mental health conditions, Hepatitis C and
HIV).
The role of case managers and the person-centered care plan are to examine past needs and
services, and to document and facilitate current and future needs and services. In this Reentry
Section 1115 Demonstration Opportunity, case management is provided pre-release, and will
consider the delivery of services pre and post-release by:
• Ensuring needs identified in the care plan include services which will be received during the
post-release period, and facilitating those future services by
o Helping individuals to identify providers of services post-release;
o Making referrals for and scheduling appointments for services post-release; and
78
This list is a sampling of potential sources and is neither an exhaustive nor a list of sources that necessarily must
be consulted. Case managers and information custodians should take care to observe all applicable legal
requirements concerning the protection of personally identifiable information and protected health information,
including obtaining consent or an authorization from the individual, where appropriate.
Page 20 – State Medicaid Director
o Transitioning between pre- and post-release case managers, when another case
manager will assume case management longer-term through post-release coverage
(Medicaid or other) via a warm handoff process;
• Ensuring the state’s approved Reentry Section 1115 Demonstration benefit package of
services is provided to individuals who are eligible during the pre-release period (e.g., MAT)
as appropriate, and attempting to coordinate receipt of these services with the individual’s
receipt of other services provided directly by the carceral authority or otherwise that are not
part of the approved Section 1115 Reentry Demonstration project; and
• Communicating with correctional health care providers about health care conditions that
have been identified and that may require treatment prior to release, whether such treatment
is covered under the demonstration or by the carceral health care delivery system or
otherwise.
Additionally, the person-centered care plan should address social, educational and other
underlying needs, such as vocational services or employment. Many Medicaid beneficiaries face
challenges related to HRSN,
79
which can be particularly challenging for individuals who were
formerly incarcerated as they rebuild their lives in the community. HRSN can have an impact on
health, including but not limited to access to nutritious food, affordable and accessible housing,
convenient and efficient transportation, safe neighborhoods, strong social and familial
connections, quality education, and opportunities for meaningful employment. There is a
growing body of evidence that indicates that these challenges can lead to poorer health outcomes
for beneficiaries and higher health care costs, and can exacerbate health disparities.
80
To help
ensure that beneficiaries’ HRSN are met, states are strongly encouraged to establish partnerships
and communication lines with state and local social service agencies to promote access to
affordable housing and nutrition opportunities for beneficiaries returning to the community.
To illustrate how a case manager may address HRSN in the carceral setting, an individual may
be having difficulty securing safe and stable housing. A case manager can assist in identifying a
community-based provider whose area of expertise involves helping individuals connect to safe
and stable housing. The case manager will make the connection to the providers to enable the
individual to understand housing options, or other supportive services essential to success during
reentry, as well as follow-up with the individual to ensure the connections are effective.
While the person-centered care plan is created in the pre-release period and is part of the case
management pre-release service to assess and address physical and behavioral health needs and
HRSN, the scope of the plan extends beyond release and should include the full array of
Medicaid-covered services and other needed supports. As previously indicated, some of the
services identified in the person-centered care plan may be provided pre-release, while others
will be provided post-release. The case manager creates linkages by arranging for and
scheduling appointments for services pre-release and post-release in the community. Because
the scope of the person-centered care plan includes both pre- and post-release periods, it may
include a vast array of services and items for comprehensive physical and behavioral health care
as appropriate, such as: physical exams, consultation, lab work, screening for suicide risk,
79
https://health.gov/healthypeople/priority-areas/social-determinants-health/literature-summaries/incarceration.
80
https://www.medicaid.gov/federal-policy-guidance/downloads/sho21001.pdf.
Page 21 – State Medicaid Director
screening for overdose risk, MAT, peer support services, medications; linkages with housing,
employment, and/or other HRSN providers; connection to integrated care models such as
Medicaid health homes for individuals with chronic conditions; linkages to long-term services
and supports needed to remain in the community upon release; and other health care services,
supplies, and appliances beneficiaries may need upon release (e.g., wheelchair, walker, glucose
meter and diabetic test strips, etc.).
Case managers will need to:
• develop a relationship characterized by respect, dignity, and trust with each individual who is
incarcerated and assigned to the case manager;
• assess the individual comprehensively by acquiring and synthesizing information regarding
their needs;
• offer information in an easy to understand and actionable person-centered care plan;
• make linkages to services pre-release, with other linkages to post-release services; and
• provide a warm hand-off to post-release case managers who will provide services under the
Medicaid state plan or other waiver or demonstration authority.
States and managed care plans, if applicable, should consider training requirements and
competencies for case managers to address the medical and social complexities and challenges
individuals who are currently or were recently incarcerated may experience and lay the
foundation for a trust relationship such as:
• trauma-informed approaches, which recognize individuals’ life experiences within and
outside of incarceration, as individuals who are incarcerated have significantly higher rates of
trauma and adverse childhood experiences than the general population;
81
• person-centered care planning, which puts the individual at the center of the conversation and
includes them in decision-making;
• intrapersonal and person-centered approach to acknowledging cultural experiences and
environments, recognizing how individuals’ past, current, and future cultural experiences and
environments inform individuals’ needs;
• support for individuals’ communication needs related to language or disability,
82
which is
essential for building understanding, safety, and trust, as well as ensuring quality in person-
centered care planning and coordination;
• knowledge, experience, and understanding of complex physical and behavioral health needs
and health-related social needs, and individuals with undiagnosed conditions or needs that
may not have been treated or met;
• understanding of the unique needs of the incarcerated population they will be serving, as well
as the additional hurdles these individuals are likely to face upon reentry, based on chronic
81
Wolff N, Shi J. Childhood and adult trauma experiences of incarcerated persons and their relationship to adult
behavioral health problems and treatment. Int J Environ Res Public Health, 2012 May; 9(5):1908-26. Available at:
https://www.mdpi.com/1660-4601/9/5/1908.
82
Web-based training resources that may be useful for cultural competency/cultural humility skills as case managers
work with individuals with limited English proficiency, individuals with disabilities, and individuals from LGBTQ+
communities are available at: https://www.cms.gov/outreach-and-education/medicare-learning-network-
mln/mlnproducts/webbasedtraining. States can also consider staff with similar needs who may be able to better
engage individuals and build a strong rapport.
Page 22 – State Medicaid Director
health conditions, complex health-related circumstances, interaction with the foster care
system, the stigma associated with incarceration, and the supportive services necessary to
address underlying employment, housing, and other underlying needs; and
• skills related to making a trust connection and building a strong rapport with reentering
individuals, based on respect.
Individuals who are incarcerated may be moving or returning to communities far from where
they have been incarcerated. As such, case managers will need to be knowledgeable or inform
themselves about community resources in the areas to which individuals are returning in order to
arrange for needed services. Case managers who provided pre-release services, depending on
the state’s proposal, may continue to provide post-release case management under the Medicaid
state plan authority or other waiver or demonstration authority. They may also need to
coordinate with other case managers in the communities where incarcerated individuals will be
moving to facilitate a smooth transition and warm hand off if there will be more than one case
manager involved with an incarcerated individual’s transition to the community. States will need
to ensure appropriate case management coverage is available to work with formerly incarcerated
individuals post-release. CMS is available for state technical assistance to add state plan
coverage for targeted case management or to provide case management under other Medicaid
authorities, as may be needed.
Planning for post-release services begins with case management through this demonstration, but
reassessment, monitoring and follow-up will likely continue after the individual is released from
incarceration, through the post-demonstration Medicaid benefits to which the beneficiary is
entitled. Whether case management is provided in fee-for-service or through a managed care
plan, CMS expects case managers to work with the individual on an ongoing basis post-release
to help ensure access to care, continuity of care, and receipt of needed services post-release.
Case managers working with reentering individuals who will be enrolled in a managed care plan
should also ensure that they educate the individuals on how to access covered services, including
how to determine whether a provider is in the plan’s network.
Since many incarcerated individuals, upon reentry, will be required to meet conditions of parole
or probation, case managers may need to facilitate effective communication with parole or
probation officers to coordinate health care services, as well as address HRSN in the community.
Benefit #2: Medication Assisted Treatment (MAT)
For purposes of this demonstration opportunity, MAT includes medication in combination with
counseling/behavioral therapies, as appropriate and individually determined, and should be
available for all types of SUD as clinically appropriate, not just OUD. CMS also recognizes that
in many instances, prisons and jails are not providing MAT or are only providing limited forms
of MAT. Despite these limitations, CMS expects that MAT coverage will be accessible to
demonstration beneficiaries with SUD. MAT may be covered as a demonstration benefit under
the Reentry Section 1115 Demonstration Opportunity, or it may be provided under existing state-
only programs or by the carceral system. In cases where MAT benefits may be limited or not
easily accessible, such as when provided by a state-only program or by the carceral system
Page 23 – State Medicaid Director
directly, demonstration coverage may be used to enhance the benefit to help ensure robust
coverage and access to MAT services for beneficiaries for whom they are appropriate.
As noted earlier in the background section of this letter, rates of SUD among individuals who are
incarcerated are extremely high. Additionally, many individuals are incarcerated for crimes
involving drugs or drug use.
83
Data also show that MAT is underutilized in the carceral system
for a variety of reasons, including pressure from other incarcerated individuals while in a
carceral setting; stigma; and perceptions that using MAT to treat an SUD is just trading one drug
for another drug, that individuals who are incarcerated may not be able to continue treatment
post-release or will be likely to resume drug use to cope with environmental stress after release,
and that correctional facilities may not have capacity to provide or cannot afford to provide
MAT.
84
In addition to greater access to illegal drugs once released, individuals may be returning to
settings and communities in which they were using drugs prior to incarceration, as well as
encountering new or aggravated life stressors due to the obstacles to securing services and
supports to address underlying needs. High rates of death from opioid overdose shortly after
release from incarceration are well documented, with a 2018 study of individuals released from
North Carolina prisons from 2000 to 2015 experiencing overdose deaths during the period two
weeks post-release at a rate that was 40 times higher than overdose deaths in the general North
Carolina population.
85
In two Washington state studies, drug overdose was the most common
cause of death and was responsible for over a quarter of deaths after release from prisons, with
the greatest risk of death immediately after release from prison.
86
Given these alarming statistics, the importance of providing MAT coverage for the carceral
population with SUD is critical to ensuring the quality of care for reentering individuals and the
likelihood of successful transitions to the community. Medicaid coverage is available for all
U.S. Food and Drug Administration (FDA) approved medications for opioid use disorder
(MOUD), including buprenorphine, methadone, and naltrexone as well as acamprosate and
naltrexone for alcohol use disorder. All of these approved MOUD and alcohol use disorder
medications have been shown to be safe and effective when used in accordance with their FDA-
approved labeling. Patients on naltrexone who discontinue its use or relapse after a period of
abstinence may have a reduced tolerance to opioids. Therefore, taking the same, or even lower
doses of opioids than used in the past can cause life-threatening consequences. CMS encourages
states to cover the full array of FDA-approved medications, including buprenorphine and
methadone. States should encourage providers, including those practicing in correctional
83
https://nida.nih.gov/publications/drugfacts/criminal-justice.
84
https://store.samhsa.gov/sites/default/files/d7/priv/pep19-matbriefcjs_0.pdf.
85
Ranapurwala, S. et al., Opioid overdose mortality among former North Carolina inmates: 2000-2015. American
Journal of Public Health, 2018 Sept; 108(9):1207–1213. Available at:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6085027/.
86
http://www.hca.wa.gov/assets/program/SOR-workgroup-meetingmaterials-202009.pdf
Page 24 – State Medicaid Director
facilities, to utilize the medication that is most appropriate for each individual, with a focus on
MAT induction, stabilization, and maintenance of treatment, including post-release.
87
The Reentry Section 1115 Demonstration Opportunity may present an opportunity to increase
provision of MAT within the carceral system. In line with research demonstrating the
effectiveness of MAT,
88,89
CMS expects state Medicaid agencies participating in this
demonstration opportunity, along with their correctional agency partners, to use all available
levers in their states to increase the availability of MAT as clinically appropriate within prisons
and jails to appropriate individuals.
Benefit #3: 30-day supply of all prescription medications provided to the beneficiary
immediately upon release from the correctional facility
States and stakeholders have shared that a prison or jail providing a prescription for medication
that an individual is taking is often inadequate to ensure near real-time receipt of the medication
in the community when a person is released from incarceration, and therefore is often inadequate
to ensure adherence to a prescribed course of medical treatment. Providing a 30-day supply of
prescription medication that has been prescribed for a beneficiary immediately upon release (as
clinically appropriate based on the medication dispensed and the indication) can reduce one
barrier to meeting ongoing medical needs upon reentry and may prevent unnecessary use of an
ED and/or inpatient hospitalization.
Provision of medication upon release may be as either a pre-release demonstration service or as a
post-release Medicaid service furnished outside the scope of this demonstration. Some states
may choose to cover the medications through section 1115 expenditure authority prior to the
individual formally being released from incarceration. In other states, the individual may receive
the medications under their state plan Medicaid benefit package as they are leaving the carceral
facility. Regardless of the approach selected by the state, CMS expects the Reentry Section 1115
Demonstration Opportunity to facilitate the provision of a 30-day supply of any prescription
medication(s) (as clinically appropriate based on the medication dispensed and the indication) for
physical and behavioral health conditions, including MAT prescription(s), at the point of release.
Flexibility for Additional Physical and Behavioral Health Services
Due to the variability in health care services currently provided in jails and prisons, the Reentry
Section 1115 Demonstration Opportunity allows state Medicaid agencies to scope a proposed
common benefit package across carceral facilities to best accomplish the demonstration goals by
improving care transitions for incarcerated individuals. In addition to the services of case
management, MAT coverage for all types of SUD, and 30 days of prescription medication upon
release
90
, we recognize that there may be other important physical and behavioral health services
87
https://www.samhsa.gov/medication-assisted-treatment/medications-counseling-related-conditions/naltrexone.
88
https://pubmed.ncbi.nlm.nih.gov/30797392/.
89
https://www.ncbi.nlm.nih.gov/books/NBK538936/.
90
The 30-day supply of prescription medications should be dispensed as clinically appropriate based on the
medication and the indication.
Page 25 – State Medicaid Director
that states may request 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 with lived experience, or treatment for Hepatitis C. CMS is also open
to states requesting section 1115 expenditure authority to provide medical supplies, equipment,
and appliances prior to the individual formally being released from incarceration, so that
individuals transition to the community with needed items, such as walkers, diabetic supplies,
etc. Because of operational variations between states, some individuals may be able to receive
these items immediately upon release as part of their state plan or other waiver or demonstration
project benefit package as they are leaving the carceral facility.
States may also wish to leverage existing and new initiatives to improve health outcomes for
individuals who are incarcerated returning to the community, similar to the Strategies to Address
the Opioid Epidemic (SUD)
91
and/or Opportunities to Design Innovative Service Delivery
Systems for Adults with a Serious Mental Illness or Children with a Serious Emotional
Disturbance (SMI/SED)
92
section 1115 demonstration opportunities. There are also many
models and best and promising practices to draw upon that are in place in public and private
health systems. One best practice for reentry supports includes relying on trained peers or
community navigators who have similar lived experiences as recently released beneficiaries who
can act as mentors to help navigate health and reentry challenges. Having a trained peer
supporter can provide another long-lasting, trusting relationship post-release. Individuals may
feel more comfortable relaying a personal challenge, health concern, or environmental issue or
conflict, including a relapse, to a peer rather than a medical professional or parole or probation
officer.
93
Models like the Transitions Clinic Network leverage community health workers who are part of
the integrated care team to further promote high quality, equitable health care and cultural
responsiveness in clinics that serve reentering individuals in the neighborhoods most impacted
by incarceration.
94
Additionally, “hub-and-spoke”
95
and OTPs are two examples of evidence-
based model options for prison and jails. Prisons and jails can contract with providers in the
community or become certified OTPs. Hub and spoke models rely on “hub” providers to act as
responsible providers who facilitate and/or provide treatment with shared resources and
91
https://www.medicaid.gov/federal-policy-guidance/downloads/smd17003.pdf.
92
https://www.medicaid.gov/federal-policy-guidance/downloads/smd18011.pdf.
93
https://nationalreentryresourcecenter.org/resources/formerly-incarcerated-peer-mentoring-can-offer-chance-give-
back.
94
https://transitionsclinic.org/.
95
Department of Justice (DOJ), Bureau of Prisons (BOP) is working with the Substance Abuse and Mental Health
Services Administration (SAMHSA) and the Drug Enforcement Administration to implement Opioid Treatment
Programs (OTP) in federal institutions and is also working to implement a “hub and spoke” model that will allow all
BOP-managed institutions to directly provide all three U.S. Food and Drug Administration approved MOUD
medications. Hubs will provide direct oversight of the program, ensuring that individuals have access to
medications, while some medications are provided by community providers. For more information, see:
https://www.ojp.gov/first-step-act-annual-report-april-2022.
Page 26 – State Medicaid Director
responsibilities extending to “spoke” interdisciplinary community team members such as
physical and behavioral health providers and care coordinators.
96
Reentering individuals may also benefit from integrated provider delivery models, such as health
homes,
97,98
to provide whole person primary, acute, and behavioral health care, and long-term
services and supports to members with chronic conditions in the community under one umbrella.
Health homes can be especially helpful for returning community members who
disproportionately experience physical and behavioral health problems including SUD.
99
Under the optional Medicaid “Health Homes” benefit at section 1945 of the Act, states can cover
certain services for Medicaid beneficiaries with at least two chronic conditions (including
SUDs), with at least one chronic condition and who are at risk of having another, or with at least
one serious and persistent mental health condition. The services that states can cover under this
benefit are comprehensive care management, care coordination and health promotion,
comprehensive transitional care from inpatient to other settings, patient and family support, and
referral to community and social support services (if relevant). States can opt to add this Health
Home benefit to their state Medicaid plan.
States that want to add pre-release services beyond the minimum benefit package should base
these additional services on the needs of the carceral populations they are proposing to serve and
the carceral settings included in their demonstration. Such services would be otherwise
coverable state plan services, if not for the inmate payment exclusion. These states should
provide justification in their section 1115 demonstration applications for how such services
would be likely to promote the objectives of the Medicaid program and facilitate meeting the
demonstration goals, consistent with section 5032 of the SUPPORT Act.
Pre-Release Services Providers
During the pre-release period, states may choose to cover in-person health care services, services
delivered to individuals who are incarcerated via telehealth, or use some combination of both
modalities. CMS expects Medicaid agencies to work with the respective correctional systems
and facilities to ensure access to demonstration-covered health care services and to facilitate
access into correctional facilities for community health care providers, including case managers,
in person and/or via telehealth. State Medicaid agencies should also collaborate with
correctional entities to ensure the availability of appropriate technology that may be needed for
health care services that are delivered via telehealth, as well as procedures to ensure appropriate
privacy during telehealth visits, consistent with any applicable federal and state confidentiality,
privacy, and security requirements. This privacy is critical in facilitating a trusting relationship
between individuals who are incarcerated and their health care providers during the pre-release
service delivery period and is expected to help ensure better health outcomes upon release.
96
https://store.samhsa.gov/sites/default/files/d7/priv/pep19-matusecjs.pdf.
97
https://www.medicaid.gov/federal-policy-guidance/downloads/cib112719.pdf.
98
https://www.medicaid.gov/resources-for-states/medicaid-state-technical-assistance/health-home-information-
resource-center/guide-medicaid-health-home-design-implementation/index.html.
99
https://aspe.hhs.gov/sites/default/files/documents/d48e8a9fdd499029542f0a30aa78bfd1/health-care-reentry-
transitions.pdf.
Page 27 – State Medicaid Director
While provision of “in reach” pre-release services by community-based providers is the preferred
approach to build trust with individuals who are incarcerated and strengthen the connection to
the community upon release, CMS recognizes the operational complexities inherent in providing
services to an incarcerated population, and that many states have provider shortages, which are
particularly acute in rural areas. States may choose to rely on carceral health care providers for
delivery of some or all of the pre-release services.
Generally, states that rely on carceral health care providers to furnish pre-release services
authorized through the demonstration must ensure that they comply with Medicaid provider
participation policies set by the state Medicaid agency.
The demonstration’s evaluation efforts will be expected to include an examination of pre-release
carceral and community providers, including challenges encountered, as they develop
relationships and coordinate to facilitate transition of individuals into the community.
Pre-release Timeframe
Section 5032(b) of the SUPPORT Act states that, “the Secretary of Health and Human Services,
through the Administrator of the Centers for Medicare & Medicaid Services, shall issue a State
Medicaid Director letter, based on best practices developed under subsection (a)(1), regarding
opportunities to design demonstration projects under section 1115 of the Social Security Act (42
U.S.C. 1315) to improve care transitions for certain individuals who are soon-to-be former
inmates of a public institution and who are otherwise eligible to receive medical assistance under
title XIX of such Act, including systems for, with respect to a period (not to exceed 30 days)
immediately prior to the day on which such individuals are expected to be released from such
institution - (1) providing assistance and education for enrollment under a State plan under the
Medicaid program under title XIX of such Act for such individuals during such period; and (2)
providing health care services for such individuals during such period.” For the reasons outlined
below, the Reentry Section 1115 Demonstration Opportunity can include flexibility for states to
offer coverage for certain pre-release services for up to 90 days before the incarcerated
individual’s expected date of release.
The section 5032 stakeholder group and a number of states have suggested that 30 days prior to
release is not a sufficient period of time to begin supporting incarcerated individuals to best
enable their successful transition back to their communities. They point out that 30 days may be
insufficient for coordinating and transitioning care, particularly for individuals with SUD.
However, Congress has expressed its judgment in section 5032(b) of the SUPPORT Act that this
demonstration opportunity should provide coverage for health care services furnished to
demonstration beneficiaries for a period that specifically does not exceed 30 days prior to the
expected date of release. Although that time limitation does not apply to the Secretary’s general
authority to approve demonstration projects and associated expenditure authorities under section
1115 of the Act, we must abide by Congress’ determination that demonstration projects under
the opportunity described in section 5032(b) of the SUPPORT Act to improve care transitions for
certain soon-to-be released individuals must not begin to cover services subject to the inmate
payment exclusion before the date that is 30 days immediately prior to the individual’s expected
release date.
Page 28 – State Medicaid Director
CMS welcomes state proposals to provide demonstration coverage for certain pre-release
services for a period up to 90 days immediately prior to the individual’s expected release date,
but such demonstrations must have a demonstration purpose and related experimental hypotheses
that go beyond improving care transitions for soon-to-be released individuals. That is, the
demonstration must not be limited in its test to the matter that Congress directed should be
evaluated during a period not to exceed 30 days immediately prior to the expected release date,
but should include one or more additional tests that the Secretary has discretion to approve under
section 1115 of the Act with respect to the period over 30 days and up to 90 days immediately
prior to the expected released date.
Under Secretarial authority at section 1115 of the Act, and in keeping with the objective of the
Medicaid program to furnish medical assistance, CMS will consider state requests that exceed
the 30-day period for pre-release services, for up to a 90-day pre-release period.
Administrative Information Technology (IT)
State Medicaid agency IT system expenditures
100
incurred in the implementation of the Reentry
Section 1115 Demonstration Opportunity may be eligible for enhanced FFP. For states
interested in receiving such funding, CMS reminds states of the following:
• Approval for enhanced match requires the submission and approval of an Advanced Planning
Document (APD). A state may submit an APD requesting approval for a 90/10 enhanced
federal match for the design, development, and implementation of their Medicaid Enterprise
Systems (MES) initiatives that contribute to the economic and efficient operation of the
program. This can include technology that supports data sharing between state Medicaid
agencies, state correctional agencies and participating correctional facilities, such as systems
to support eligibility determinations and enrollment (including suspension strategies).
• Interested states should refer to 45 CFR Part 95, Subpart F – Automatic Data Processing
Equipment and Services-Conditions for FFP for the specific provisions contained therein
related to APD submission.
• As a condition of receiving enhanced federal funding for technology, 42 CFR §
433.112(b)(12) requires alignment with, and incorporation of, industry standards adopted by
the Office of the National Coordinator for Health IT in 45 CFR part 170, subpart B. Subpart
B contains potentially helpful standards for coordination care between carceral settings and
community providers (e.g., direct messaging, the Fast Healthcare Interoperability Resource
application programming interface, public health standards including electronic case
reporting for more granular overdose reporting and/or COVID reporting, and syndromic
surveillance standards to potentially coordinate Hepatitis C or HIV care coordination, etc.).
• States may also request a 75/25 enhanced federal match for ongoing operations of CMS-
approved systems. Interested states should refer to 42 CFR Part 433, Subpart C –
Mechanized Claims Processing and Information Retrieval Systems for the specific provisions
contained therein related to systems approval.
100
https://www.medicaid.gov/medicaid/data-systems/health-information-exchange/federal-financial-participation-
for-hit-and-hie/index.html.
Page 29 – State Medicaid Director
State Medicaid agency expenditures that may be eligible for this enhanced administrative match
include, but are not limited to, the following examples:
• Establishing State Medicaid Agency systems and/or improving data integration with other
electronic data sources and/or systems to support eligibility determination, enrollment
(including suspension), and case management of Medicaid beneficiaries, as well as
connections between carceral settings, state Medicaid agencies, state correctional agencies,
Medicaid providers, and other systems (e.g., housing or other HRSN data systems/sources);
• Developing and implementing software applications that facilitate communication among
Medicaid providers and correctional staff involved with care furnished to incarcerated
beneficiaries;
• Adding additional data fields and data matching logic for Medicaid program components
such as eligibility and enrollment, services, prior authorization or claims processing in
additional to new fields that may be added through this demonstration such as length of
incarceration, expected dates of discharge from incarceration, and other data elements
specific to the carceral environment;
• Adding new or existing system processes or enhancements for routine file exchanges and
updates, and processes for matching, notification, and delivery of files to facilitate the
necessary data exchanges to identify individuals and deliver services as well as tracking of
participation in the demonstration and delivery of services; and
• Implementing or improving MES accessibility technologies for users with disabilities.
If there are questions related to IT topics and IT system expenditures, CMS encourages states to
contact their MES State Officer.
States are also asked to consider the technical requirements for coordinating care between
carceral settings and community providers and public health entities. The electronic health
records (EHR) used by correctional health providers may not necessarily be certified to criteria
in the Office of the National Coordinator for Health Information Technology’s (ONC) Health IT
Certification Program (Certification Program),
101
which is a voluntary certification program
established to provide for the certification of health IT. Requirements for certification are
established by standards, implementation specifications and certification criteria adopted by the
Secretary of Health and Human Services. Given the variance in capabilities of EHRs in carceral
settings, and the need to coordinate care with community providers post-release, states may wish
to consider multiple approaches:
1. States may consider requiring or recommending that participating correctional health
providers use EHRs that have been certified to criteria within the ONC Certification
Program, such as EHRs that meet the definition in 45 C.F.R. § 170.102 for “2015 Edition
Base EHR.”
101
https://www.healthit.gov/topic/certification-ehrs/about-onc-health-it-certification-program.
Page 30 – State Medicaid Director
2. States may consider requiring or recommending that participating correctional health
providers are able to perform certain activities related to coordinating care irrespective of the
certification status of any carceral EHR system, such as:
a. Ability to electronically share a core set of clinical and demographic information
about each patient with community providers, as defined by the most appropriate
edition of the
United States Core Data for Interoperability (USCDI).
102
b. Ability to bi-directionally share data with public health entities and community
providers for purposes of activities related to coordinating care for HIV (including
Pre-Exposure Prophylaxis or PreP testing) and Hepatitis C.
c. Ability to share necessary clinical information with community providers for
establishing or continuing MAT post-release.
d. Ability to share necessary clinical information with Medicaid SUD treatment
providers post-release.
e. Ability to share necessary clinical information with Medicaid behavioral health
providers post-release.
f. Ability to share results of screening for HRSN with appropriate community providers
and public assistance agencies.
3. States may consider requiring or recommending that correctional health providers and
community providers connect to some national networks to facilitate activities related to
coordinating care, such as:
a. Connecting to the eHealth Exchange
103
to facilitate the exchange of data across
disparate systems, including pharmacy and lab data;
b. Connecting to the Centers for Disease Control and Prevention Immunization
Gateway
104
to facilitate the exchange of immunization data across jurisdictions; or
in the future, when available under the Trusted Exchange Framework and Common
Agreement (TEFCA), by participating as a signatory to a Framework Agreement (as
that term is defined by the Common Agreement for Nationwide Health Information
Interoperability as published in the Federal Register and on ONC’s website
105
) in
good standing (that is, not suspended) and enabling secure, bi-directional exchange of
information to occur, in production, for every patient encounter, transition or referral,
and record stored or maintained, in accordance with applicable law and policy.
Transitional, Non-Service Expenditures
CMS will consider requests for time-limited support in the form of FFP for certain new
expenditures through section 1115 demonstration authority to support necessary changes
required by states, correctional facilities, and health care providers to implement and expand
102
https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
103
https://ehealthexchange.org/.
104
https://www.cdc.gov/vaccines/programs/iis/iz-
gateway/overview.html#:~:text=The%20Immunization%20Gateway%20(IZ%20Gateway,provider%20organization
s%2C%20and%20consumer%20applications.
105
https://www.healthit.gov/topic/interoperability/policy/trusted-exchange-framework-and-common-agreement-
tefca.
Page 31 – State Medicaid Director
service provision and coordination with community providers, to support the implementation of
the Reentry Section 1115 Demonstration Opportunity. Examples include the following:
• Development of new business and operational practices and related health IT to support
the coordination of pre- and post-release services that would improve alignment in
documentation and billing between Medicaid and the carceral setting;
• Hiring and training of staff to assist with working effectively and appropriately with
justice-involved individuals receiving services authorized under the demonstration; and
• Outreach, education, and stakeholder convening to advance collaboration between
correctional facilities, Medicaid agencies, and other organizations involved in supporting
and planning for the Reentry Demonstration.
CMS recognizes there are significant upfront and/or one-time non-service costs required to bring
necessary linkages to Medicaid operations and IT capabilities into the carceral settings. FFP for
such expenditures authorized through a Reentry Section 1115 Demonstration must be new
spending. In their applications, states should clearly describe the specific transitional, non-
service activities necessary to support the successful implementation of the Reentry Section 1115
Demonstration, and should justify the projected expenditures associated with each activity. In
order to justify approval, states should document how these expenditures are new as a result of
implementation activities necessary for the Reentry Section 1115 Demonstration and not an
offset of existing or otherwise planned expenditures. When incurred expenditures support both
Reentry Section 1115 Demonstration and non-Demonstration activities, states must apply cost
allocation principles consistent with federal regulations at 45 CFR Part 75 in order to properly
identify the amounts that may be claimed for FFP. As with other components of a state
demonstration application, CMS will review each request for expenditure authority individually
and on its merits. If authorized, such expenditures will be subject to any limitations, as well as
regular reporting, monitoring, and evaluation requirements, to be described in the relevant
expenditure authorities and demonstration STCs.
Data-Sharing, Confidentiality, Privacy, and Security Considerations
CMS understands data related to carceral status, release and reentry details, Medicaid eligibility,
and the health care needs of individuals who are incarcerated and returning to the community
may reside in fragmented systems, including non-electronic systems. This may present some
challenges in data sharing for purposes of case management and collection of data for this
Reentry Section 1115 Demonstration Opportunity. States are reminded, and should be
cognizant, of the laws and regulations regarding confidentiality, access, storage, and handling of
certain information, including but not limited to: Section 1902(a)(7) of the Act;
106
42 CFR Part
431, Subpart F; 42 CFR Part 2;
107
and the Health Insurance Portability and Accountability Act of
1996 (HIPAA) Privacy, Security, Breach Notification, and Enforcement Rules (the HIPAA
106
https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-431/subpart-F.
107
For more information about the requirements in 42 CFR Part 2 regarding confidentiality of SUD patient records,
see: https://www.samhsa.gov/about-us/who-we-are/laws-regulations/confidentiality-regulations-faqs.
Page 32 – State Medicaid Director
Rules).
108,109
These laws and regulations should not be barriers for health care personnel to
coordinate patient care among organizations or for audit, monitoring, and/or evaluation activities,
but they may require the data to be used and safeguarded in accordance with the applicable rules,
and may require patient consent or authorization under certain circumstances. To operationalize
data sharing for this demonstration opportunity, CMS recommends that state Medicaid agencies
engage their partner corrections agencies early on to establish vehicles, such as appropriate and
comprehensive consent/authorization forms, if required, for information sharing and Memoranda
of Understanding to facilitate information sharing with appropriate information protections and
compliance with, as applicable, 42 CFR Part 2; the HIPAA Rules; 42 CFR Part 431, Subpart
F;
110
and any other applicable requirements under federal and state law for data sharing,
confidentiality, privacy, and security.
Reinvestment Plan
As noted above, CMS does not expect to approve state proposals to receive federal Medicaid
matching funds through the Reentry Section 1115 Demonstration Opportunity for any existing
carceral health care services that are currently funded with state and/or local dollars unless the
state agrees to reinvest the total amount of federal matching funds received for such services
under the demonstration into activities and/or initiatives that increase access to or improve the
quality of health care services for individuals who are incarcerated (including individuals who
are soon-to-be released) or were recently released from incarceration, or for health-related social
services that may help divert individuals from criminal justice involvement. Any investment in
carceral health care must add to and/or improve the quality of health care services and resources
for individuals who are incarcerated and those who are soon to be released from carceral settings,
and not supplant existing state or local spending on such services and resources.
Interested states should develop and submit as part of their implementation plan a reinvestment
plan for CMS review and approval outlining how the funds will be reinvested.
The reinvestment plan should align with the goals of the Reentry Section 1115 Demonstration
Opportunity. It should detail the state’s plans to increase access to or improve the quality of
health care services, as well as address HRSN of individuals who are incarcerated (including
those who are soon-to-be released), those who have recently been released, and those who may
be at higher risk of criminal justice involvement, particularly due to untreated behavioral health
conditions. States have flexibility to identify particular activities and/or initiatives in their
reinvestment plan, based on the focus of the state’s proposal and the needs of individuals in their
state. Reinvestment funds should be used to support the successful transition of beneficiaries to
the community, e.g. investments to facilitate the provision of pre-release services, such as case
108
45 CFR Parts 160 and 164. For more information on the HIPAA Rules, see: https://www.hhs.gov/hipaa/for-
professionals/index.html.
109
42 CFR Part 2 currently imposes different requirements for SUD treatment patient records protected by Part 2
than the HIPAA Rules impose for protected health information (PHI). These statutory and regulatory schemes apply
to different types of entities and create dual obligations and compliance challenges for HIPAA covered entities and
business associates that maintain PHI and Part 2 records, and thus are subject to both sets of rules.
110
https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-431/subpart-F.
Page 33 – State Medicaid Director
management, or expansion of community-based capacity, e.g. increasing or improving mental
health and SUD services. The reinvestment plan should describe the activities and/or initiatives
the state has selected to invest in and a timeline for implementation. For example, the
reinvestment plan could include investments aimed at achieving the following:
• Improved access to behavioral and physical health care services in the community. This
may result in expansion of Medicaid services such as adding or expanding mobile crisis
services, trained peer supports, Medicaid health homes, and long-term services and
supports to beneficiaries with chronic conditions and complex health-related
circumstances.
• Improved access to and/or quality of carceral health care services, including by covering
new, enhanced, or expanded pre-release services authorized via the Reentry Section 1115
Demonstration Opportunity.
• Improved health information technology and data sharing.
• Increased community-based provider capacity that is particularly attuned to the specific
needs of and able to serve justice-involved or individuals at risk of justice involvement.
• Expanded or enhanced community-based reentry services and supports, including
services and supports to meet the HRSN of the justice-involved population.
The state’s share of expenditures for new, enhanced or expanded pre-release services approved
under the demonstration can be considered an allowable reinvestment. CMS would not approve
a reinvestment plan under which funds would be used to build prisons, jails, or other carceral
facilities or pay for prison or jail-related improvements other than those for direct and primary
use in meeting the health care needs of individuals who are incarcerated. States seeking to
reinvest funds in activities in jails or prisons should describe in their reinvestment plan, which is
subject to CMS review and approval, whether privately-owned or -operated carceral facilities
would receive any of the reinvested funds and, if so, the safeguards the state proposes to ensure
that such funds are used for the intended purpose and do not have the effect of increasing profit
or operating margins for privately-owned or -operated carceral facilities.
Demonstration Milestones
The Reentry Section 1115 Demonstration Opportunity offers states flexibility to design
demonstrations that are aimed at making significant improvements on a number of milestones
with associated actions. When submitting proposals for the Reentry Section 1115 Demonstration
Opportunity, states will be expected to commit to a number of actions to improve care transitions
for reentering individuals, including by helping eligible individuals gain or maintain Medicaid
enrollment and access high quality covered services. These commitments should be linked to
state actions that build on the demonstration goals described earlier in this letter. They should
include actions to ensure continuity of coverage and care, to cover and ensure access to the
minimum set of pre-release services for individuals who are incarcerated, to facilitate better
transitions and address physical and behavioral health conditions, to ensure access to services
post-release to meet the needs of the reentering population, and to ensure cross-system
collaboration. The milestones and associated actions are:
1. Increasing coverage and ensuring continuity of coverage for individuals who are
incarcerated
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• Implement a state policy for a suspension strategy during incarceration (or implement an
alternative proposal to ensure that only allowable benefits are covered and paid for during
incarceration, while ensuring coverage and payment of full benefits as soon as possible
upon release), with up to a two-year glide path to fully effectuate.
• Ensure that any Medicaid-eligible person who is incarcerated at a participating facility
but not yet enrolled is afforded the opportunity to apply for Medicaid in the most feasible
and efficient manner and is offered assistance with the Medicaid application process in
accordance with 42 CFR § 435.906 and § 435.908. This could include applications
online, by telephone, in person, via mail or common electronic means in accordance with
42 CFR § 435.907. All individuals enrolled in Medicaid during their incarceration must
be provided notice of any Medicaid eligibility determinations and actions pursuant to 42
CFR § 435.917 and § 431.211.
• Ensure that all individuals at a participating facility who were enrolled in Medicaid prior
to their incarceration are offered assistance with the Medicaid renewal or redetermination
process requirements in accordance with 42 CFR § 435.908 and § 435.916. All
individuals enrolled in Medicaid during their incarceration must be provided notice of
any Medicaid eligibility determinations and actions pursuant to 42 CFR § 435.917 and §
431.211.
• Implement a state requirement to ensure that all Medicaid-enrolled individuals who are
incarcerated at a participating facility have Medicaid and/or managed care plan cards or
some other Medicaid and/or managed care enrollment documentation (e.g., identification
number, digital documentation, instructions on how to print a card, etc.) provided to the
individual upon release, along with information on how to use their coverage
(coordinated with the requirements under milestone #3 below).
• Establish processes to allow and assist all individuals who are incarcerated at a
participating facility to access and complete a Medicaid application, including providing
information about where to complete the Medicaid application for another state, e.g.,
relevant state Medicaid agency website, if the individual will be moving to a different
state upon release.
2. Covering and ensuring access to the minimum set of pre-release services for individuals who
are incarcerated to improve care transitions upon return to the community
• Implement state processes to identify individuals who are incarcerated who qualify for
pre-release services under the state’s proposed demonstration design (e.g., by chronic
condition, incarceration in a participating facility, etc.).
• Cover and ensure access to the minimum short-term, pre-release benefit package,
including case management to assess and address physical and behavioral health needs
and HRSN, MAT services for all types of SUD as clinically appropriate with
accompanying counseling, and a 30-day supply of medication (as clinically appropriate
based on the medication dispensed and the indication) provided to the beneficiary
immediately upon release, to Medicaid-eligible individuals identified as participating in
the Reentry Section 1115 Demonstration Opportunity. In addition, the state should
specify any additional services that the state proposes to cover for beneficiaries pre-
release. The state should describe the Medicaid benefit category or authority for each
proposed service.
Page 35 – State Medicaid Director
• Develop state process to ensure case managers have knowledge of community-based
providers in communities where individuals will be returning upon release or have the
skills and resources to inform themselves about such providers for communities with
which they are unfamiliar.
3. Promoting continuity of care
• Implement a state requirement that individuals who are incarcerated receive a person-
centered care plan prior to release to address any physical and behavioral health needs, as
well as HRSN and consideration for long term services and supports (LTSS) needs that
should be coordinated post-release, that were identified as part of pre-release case
management activities and the development of the person-centered care plan.
• Implement state policies to provide or facilitate timely access to any post-release health
care items and services, including fills or refills of prescribed medications and medical
supplies, equipment, appliances or additional exams, laboratory tests, diagnostic, family
planning, or other services needed to address the physical and behavioral health care
needs, as identified in the course of case management and the development of the person-
centered care plan.
• Implement state processes to ensure, if applicable, that managed care plan contracts
reflect clear requirements and processes for transfer of the member’s relevant health
information for purposes of continuity of care (e.g., active prior authorizations, care
management information or other information) to another managed care plan or, if
applicable, state Medicaid agency (e.g., if the beneficiary is moving to a region of the
state served by a different managed care plan or to another state after release) to ensure
continuity of coverage and care upon release (coordinated with the requirements under
milestone #1 above).
• Implement state processes to ensure case managers coordinate with providers of pre-
release services and community-based providers, if they are different providers.
Implement a state policy to require case managers to facilitate connections to community-
based providers pre-release for timely access to services upon reentry in order to provide
continuity of care and seamless transitions without administratively burdening the
beneficiary, e.g., identifying providers of post-release services, making appointments,
having discussions with the post-release case manager, if different, to facilitate a warm
handoff and continuity of services. A simple referral is not sufficient. Warm hand-offs
to a post-release case manager and follow-up are expected, consistent with guidance
language in the case management section.
4. Connecting to services available post-release to meet the needs of the reentering population
• Develop state systems to monitor individuals who are incarcerated and their person-
centered care plans to ensure that post-release services are delivered within an
appropriate timeframe. We expect this generally will include a scheduled contact
between the reentering individual and the case managers that occurs within one to two
days post-release and a second appointment that occurs within one week of release to
ensure continuity of care and seamless transition to monitor progress and care plan
implementation. These short-term follow-ups should include the pre-release and post-
release (if different) case managers, as possible, to ensure longer term post-release case
management is as seamless as possible. In keeping with the person-centered care plan
Page 36 – State Medicaid Director
and individual needs, CMS is providing these general timeframes as suggestions, but
recognizes that depending on the beneficiary’s individualized needs and risk factors, a
case manager may determine that the first scheduled contact with the beneficiary should
occur, for example, within the first 24 hours after release and on a more frequent cadence
in order to advance the goals of this demonstration.
• Develop state processes to monitor and ensure ongoing case management to ensure
successful transitions to the community and continuity of care post-release, to provide an
assessment, monitor the person-centered care plan implementation and to adjust it, as
needed, and to ensure scheduling and receipt of needed covered services.
• Develop state processes to ensure that individuals who are receiving services through the
Reentry Section 1115 Demonstration Opportunity are connected to other services needed
to address LTSS and HRSN, such as housing, employment support, and other social
supports as identified in the development of the person-centered care plan.
• Implement state policies to monitor and ensure that case managers have the necessary
time needed to respond effectively to individuals who are incarcerated who will likely
have a high need for assistance with navigating the transition into the community.
5. Ensuring cross-system collaboration
• Establish an assessment outlining how the state’s Medicaid agency and participating
correctional system/s will confirm they are ready to ensure the provision of pre-release
services to eligible beneficiaries, including but not limited to, how facilities participating
in the Reentry Section 1115 Demonstration Opportunity will facilitate access into the
correctional facilities for community health care providers, including case managers, in
person and/or via telehealth, as appropriate. A state could phase in implementation of
pre-release services based on the readiness of various participating facilities and/or
systems.
• Develop a plan for organizational level engagement, coordination, and communication
between the corrections systems, community supervision entities, health care providers
and provider organizations, state Medicaid agencies, and supported employment and
supported housing agencies or organizations.
• Develop strategies to improve awareness and education about Medicaid coverage and
health care access among various stakeholders, including individuals who are
incarcerated, community supervision agencies, corrections institutions, health care
providers, and relevant community organizations (including community organizations
serving the reentering population).
• Develop systems or establish processes to monitor the health care needs and HRSN of
individuals who are exiting carceral settings, as well as the services they received pre-
release and the care received post-release. This includes identifying any anticipated data
challenges and potential solutions, articulating the details of the data exchanges, and
executing related data-sharing agreements to facilitate monitoring of the demonstration,
as described below.
Implementation, Monitoring, and Evaluation
CMS expects a state with an approved Reentry Section 1115 Demonstration to submit an
implementation plan, a monitoring protocol, quarterly/annual monitoring reports, a mid-point
Page 37 – State Medicaid Director
assessment report, an evaluation design, and interim/summative evaluation reports, consistent
with typical expectations and requirements for a section 1115 demonstration project. States with
an approved Reentry Section 1115 Demonstration will be expected to complete all
implementation activities necessary to achieve the milestones discussed in this letter and
included in the approved Special Terms and Conditions (STC) governing the state’s
demonstration project. The monitoring and evaluation expectations will align with the goals and
milestones of the approved demonstration project, including state-specific policy nuances that
the state requests and CMS approves. CMS will provide individual state technical assistance on
the monitoring and evaluation expectations.
Implementation Plan
A state with an approved Reentry Section 1115 Demonstration will develop an implementation
plan per CMS guidance that describes the activities and associated timelines for achieving the
demonstration milestones. Among other things, a state will be expected to identify for each
milestone what it anticipates to be the key implementation challenges and the state’s specific
plans to address these challenges. Similarly, a state should note in its implementation plan how
it will drive positive changes in health care quality for all demonstration beneficiaries, thereby
reducing disparities and improving health equity. The state must also describe in the
implementation plan its approach to ensure that coverage and payment for full benefits is in
place as soon as possible upon release. A state may submit this plan as part of its application,
during the approval process with CMS, or as a post-approval protocol. As a state develops its
implementation plan, and as mentioned in the RTC, the state may wish to engage individuals
who were incarcerated with lived experience in the planning, design, and implementation of the
Reentry Section 1115 Demonstration Opportunity. If a state plans to phase in implementation of
its demonstration, it should describe its approach in the implementation plan, including how it
will leverage the phased approach to support creating comparison groups in the evaluation.
Regardless of whether the implementation plan is submitted as part of a state’s application or as
a post-approval protocol, FFP for services provided during individuals’ stays in carceral settings
will be contingent upon CMS approval of the state’s implementation plan.
As a state’s implementation of an approved Reentry Section 1115 Demonstration progresses, the
state will be expected to include information in its section 1115(a) demonstration monitoring
reports that details the state’s progress toward meeting the milestones, specifically in the context
of the timeframes specified in the state’s implementation plan.
The implementation plan must also include a reinvestment plan. The reinvestment plan should
align with the goals of the Reentry Section 1115 Demonstration Opportunity specified in section
5032(b) of the SUPPORT Act, as discussed earlier in this document.
Monitoring Protocol and Quarterly and Annual Monitoring Reports
Consistent with 42 CFR § 431.428, states must undertake monitoring of their section 1115
demonstrations. The goal of monitoring is to identify risks associated with demonstration
implementation, and proactively identify any needed mid-course corrections. To support
monitoring activities, a state with an approved Reentry Section 1115 Demonstration will be
Page 38 – State Medicaid Director
expected to include information in its demonstration quarterly and annual monitoring reports
that, among other things, details performance measures representing key indicators of progress
toward meeting the milestones for the demonstration. CMS expects such metrics to include, but
not be limited to: administration of screenings to identify individuals eligible for pre-release
services, participating pre-release services providers, utilization of applicable pre-release and
post-release services (e.g., primary, behavioral, MOUD, case management), provision of health
or social service referral pre-release, participants with established care plans at release, and take-
up of data system enhancements among participating carceral settings. Additionally, the state
will be expected to report quality of care and health outcomes metrics known to be important for
closing key quality and health equity gaps in Medicaid/CHIP (e.g., the National Quality Forum
(NQF) “disparities-sensitive” measures) and prioritizing key outcome measures and their clinical
and non-clinical (i.e., social) drivers of health. In coordination with CMS, the state is expected
to select such measures for reporting in alignment with a critical set of health equity-focused
measures that CMS is finalizing as part of its upcoming guidance on the Health Equity Measure
Slate. Not all measures on the list will be applicable based on a state’s demonstration design.
The state and CMS will collaborate to determine the appropriate measures the state will report.
The monitoring reports will also be expected to include qualitative information that will align
with the milestones outlined above, including but not limited to the state’s progress on data
development and exchange.
CMS will provide guidance to each participating state to develop a monitoring protocol that will
describe the plan for how and what the state will report in quarterly and annual monitoring
reports. The information will include, but not be limited to, agreed upon performance measures,
measure concepts, and qualitative narrative summaries. The state will also describe its plans for
collecting and reporting stratified data throughout the life-cycle of the demonstration. States that
utilize managed care plans for this demonstration must ensure that all managed care plan
contracts include sufficient requirements for plans to provide all required information and data.
Any deviations from CMS’ guidance the state wishes to make will be documented in the
monitoring protocol. A timeframe for submitting the monitoring protocol and quarterly and
annual monitoring reports will be included in the STCs of each demonstration.
Mid-point Assessment
Between years two and three of the demonstration implementation, we will expect an
independent assessor to use data reported by the state to inform a mid-point assessment
describing the state’s progress in meeting the milestones and performance measure targets. A
state at risk of not meeting the milestones will be expected to describe the mid-course corrections
it will undertake, including any modifications to its demonstration implementation. For
example, the mid-point assessment should include an examination of how the state is progressing
on data development and exchange, as a critical component to successfully monitoring and
evaluating the demonstration. The mid-point assessment should indicate if the state is on track
as per its implementation plan, any challenges the state is encountering, and how the state is
planning to overcome those challenge and apply lessons learned. Furthermore, FFP for
demonstration expenditures may be withheld if a state is not making adequate progress on
meeting the milestones as evidenced by the approved performance measures. Additionally,
Page 39 – State Medicaid Director
achievement of the milestones will be taken into consideration by CMS if a state is to request an
extension of its demonstration.
Evaluation Design and Interim and Summative Evaluation Reports
A state will also be expected to conduct independent and robust interim and summative
evaluations. To guide the evaluation efforts, the state will develop an evaluation design, with
technical assistance from CMS, to be submitted within 180 days of the demonstration approval.
The evaluation design will include detailed analytic plans and data collection and reporting
details, and will be subject to CMS approval. The evaluation design should be mixed-methods
and might include how the state will test whether the demonstration improved care transitions for
individuals who are released from incarceration, including but not limited to, whether and how
the demonstration improves coverage and quality of care. Outcomes of interest could include,
but are not limited to, measurement of cross-system communication and collaboration,
connections between carceral settings and community services, provision of preventive and
routine physical and behavioral health care, and avoidable ED visits and inpatient
hospitalizations, as well as all-cause deaths. Furthermore, the state should conduct a
comprehensive cost analysis to support developing estimates of implementing the demonstration,
including covering associated services. In instances where the state is testing services beyond
the minimum benefit package identified above and/or providing coverage for a period over 30
days and up to 90 days immediately prior to a beneficiary’s expected release date, the state
should incorporate additional hypotheses to describe those tests.
CMS underscores the importance of the state undertaking well-designed provider, carceral
facility, and/or beneficiary surveys and/or interviews to assess, for instance, key implementation
challenges for case managers, providers and carceral facilities and their understanding of
beneficiary experience, as well as to directly explore beneficiary understanding of and
experience with transitioning out of the carceral setting. To the extent feasible, the state will be
expected to collect data to support analyses stratified by key subpopulations of interest (e.g., by
sex, age, race/ethnicity, primary language, disability status, geography, and sexual orientation
and gender identity). Such stratified data analyses will provide an understanding of existing
disparities in access to and quality of care and health outcomes, and help inform how the
demonstration’s various policies might support reducing such disparities. Additionally, if a state
plans to phase in implementation across different carceral facilities, the state and its evaluator
should leverage that approach in evaluation to create comparison groups.
The state will be required to submit the interim evaluation report one year before expiration of
the demonstration or when the state submits a proposal to extend the demonstration in
accordance with transparency requirements at 42 CFR § 431.412(c). The state will be required
to submit the summative evaluation report within eighteen months after the demonstration period
ends.
Budget Neutrality
CMS will continue to require, as a condition of section 1115 demonstration approval, that
demonstrations be “budget neutral,” meaning the federal costs of the state’s Medicaid program
Page 40 – State Medicaid Director
with the demonstration cannot exceed what the federal government’s Medicaid costs in that state
likely would have been without the demonstration. In requiring demonstrations to be budget
neutral, CMS is constantly striving to achieve a balance between its interest in preserving the
fiscal integrity of the Medicaid program and its interest in facilitating state innovation through
section 1115 demonstration approvals. In practice, budget neutrality generally means that the
total computable (i.e., both state and federal) costs for approved demonstration expenditures are
limited to a certain amount for the demonstration approval period. This limit is called the budget
neutrality expenditure limit and is based on a projection of the Medicaid expenditures that could
have occurred absent the demonstration (the “without waiver” (WOW) costs).
CMS is available to provide technical assistance to states to facilitate understanding and
application of the budget neutrality approach.
111
Submission Process for Section 1115 Demonstration Projects
States may submit a new section 1115 demonstration application or amend an existing section
1115 demonstration in order to seek section 1115 expenditure authority under the Reentry
Section 1115 Demonstration Opportunity.
To facilitate CMS’ review of applications for Reentry Section 1115 Demonstrations, state
proposals should address the key elements discussed in the greater detail above, including a
description of the carceral settings, individuals who are eligible for the demonstration, pre-
release services to be included in the demonstration, and the timeframe for delivery of pre-
release services. States should also identify for each milestone what they expect to be the key
implementation challenges and at a high level how they intend to address these challenges, with
the expectation that they will be further described in the implementation plan.
States should follow the usual process for submitting a section 1115 demonstration proposal in
accordance with the transparency requirements outlined in 42 CFR § 431.412 for new
demonstrations or in accordance with the state’s STCs for proposals to amend an existing
demonstration to add authorities for the Reentry Section 1115 Demonstration Opportunity. This
includes completing public notice and tribal consultation, as applicable, prior to submission to
CMS in accordance with the applicable notice requirements for section 1115 proposals. For
more information about the section 1115 demonstration application process, states may contact
their CMS Section 1115 Project Officer or refer to the “1115 Application Process” webpage on
Medicaid.gov at https://www.medicaid.gov/medicaid/section-1115-demonstrations/1115-
application-process/index.html.
111
States may wish to review recent demonstration approvals for an explanation of specific budget neutrality
considerations. While CMS reviews each demonstration application individually, these approvals may be helpful
reference documents. See: https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/az-hccc-
ca-10142022.pdf; https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/ma-masshealth-
ca1.pdf.
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Conclusion
CMS encourages states to apply for the Reentry Section 1115 Demonstration Opportunity to
improve care transitions for Medicaid beneficiaries exiting carceral facilities, including by
providing demonstration coverage for time-limited pre-release services, and acknowledges that
several states currently have proposals pending with CMS that include requests for authority to
provide coverage for pre-release services. CMS believes that provision of pre-release services to
eligible individuals who are incarcerated may not only improve the health and reentry outcomes
of individuals who are leaving carceral facilities, but may also benefit the Medicaid program and
society at large through potential reduced drug-related deaths, decreased use of EDs and
hospitalizations, and reductions in health disparities experienced by people of color. States with
proposals already pending should review those proposals against the guidance in this letter, and
should continue to engage with CMS about the state’s proposed approach and any changes the
state may wish to make to its proposal. Questions regarding this guidance may be directed to
Alissa DeBoy, Director, Disabled and Elderly Health Programs Group, at
Alissa.Deboy1@cms.hhs.gov. We look forward to continuing our work together on these
important issues.
Sincerely,
/s/
Daniel Tsai
Deputy Administrator and Director
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Appendix 1 - Summary of Elements in Reentry Section 1115 Demonstration Opportunity
• Quality – states should consider how the demonstration design could advance quality
(including but not limited to health equity) through its approaches to promoting access to
coverage, care, transitions to the community, and quality of services, and addressing
HRSN.
• Carceral Settings – states may include state and/or local jails, prisons, and/or youth
correctional facilities for pre-release services. States may include individuals in federal
prisons in the Reentry Section 1115 Demonstration Opportunity to help federal prisoners
submit Medicaid application(s). However, CMS expects states to refrain from including
federal prisons as a setting in which pre-release services are provided under the
demonstration.
• Eligible Individuals – states may include individuals currently incarcerated who are
otherwise Medicaid eligible, soon-to-be former incarcerated individuals. States have the
flexibility to target the population.
• Medicaid eligibility and enrollment – states will be expected to suspend and not terminate
eligibility, but will have a glide path of up to two years to implement this fully.
• Scope of “Health Care” Services – states will be expected to include case management to
assess and address physical and behavioral health needs and HRSN, MAT services for all
types of SUD as clinically appropriate, and a 30-day supply of all prescription
medications (as clinically appropriate based on the medication dispensed and the
indication) provided to the beneficiary immediately upon release from the correctional
facility, as a minimum scope of services and may propose to cover additional services.
• Pre-release Timeframe – states generally will be expected to cover demonstration
services beginning 30 days immediately prior to the individual’s expected date of release;
however, CMS will consider approving demonstration authority to begin coverage as
early as 90 days prior to the expected release date, depending on the state’s
demonstration purpose and design. In the event the state requests a pre-release service
coverage timeframe longer than 30 days, the state should incorporate into its statement of
the demonstration purpose one or more elements to be tested in addition to improving
care transitions. If CMS approves a coverage timeframe longer than 30 days, relevant
hypotheses that the longer timeframe is needed to test will be required to be incorporated
into the state’s evaluation design.
• Administrative Information Technology (IT) System Costs – state Medicaid agency IT
System costs may be eligible for enhanced FFP through an APD, including IT systems
that support data sharing between state Medicaid agencies and participating correctional
facilities.
• Transitional, Non-Service Expenditures – states may request time-limited support in the
form of FFP for certain new expenditures through section 1115 demonstration authority
for necessary changes required by states, correctional facilities, and health care providers
to implement and expand service provision and coordination with community providers,
such as development of new business or operational practices, workforce development
and outreach, education, and stakeholder convening.
• Reinvestment Plan – states are expected to include in the implementation plan, a
reinvestment plan that outlines the aggregate amount of federal matching funds
that is
being requested and where reinvestments will be made, as discussed in this letter.
