Dear Colleague,
Yesterday, the Centers for Medicare and Medicaid Services (CMS) published a Dear State Health Official letter that clarifies its 1997 letter describing the conditions under which a justice-involved individual is deemed an “inmate of a public institution” and thus ineligible for federal financial participation (FFP) for Medicaid-covered services. Prior to the Affordable Care Act (ACA) few individuals in the justice system were eligible for Medicaid, and the conditions under which a justice-involved individual could enroll in Medicaid or receive Medicaid-covered services was not a particularly important public policy question. Since the enactment of the ACA, however, understanding the extent to which states can use Medicaid to address the underlying behavioral health needs of justice-involved individuals has become an important component of efforts to stem the tide of mass incarceration.
Yesterday’s letter clarifies several important questions and leave others open for interpretation:
  • Individuals on probation, parole, or community release pending trial (including those under pre-trial supervision) retain eligibility for Medicaid and Medicaid services. In clearly establishing this, CMS defined an “inmate” as someone who has lost their “legal ability to exercise personal freedom.”
  • Individuals residing in corrections-related, supervised community residential facilities are eligible for Medicaid services. An individual in these facilities should be allowed to receive health care services and choose providers according to their own decisions unless the individual does not have “freedom of movement and association” while residing at the facility. Restrictions on “freedom of movement and association,” however, are not simply the standard “house rules” for a residential facility, but indicate a higher level of supervisory control. Just sleeping in a locked facility, for example, is not enough to remove access to FFP for services.
  • In keeping with the instructions from 1997, an individual on home confinement remains eligible for Medicaid services.
  • An individual who is sent to an out-of-state institution remains eligible for Medicaid services in his home state. Further, individuals who are incarcerated in another state for committing a crime in that state would be eligible for Medicaid under the Medicaid rules of the state in which they are incarcerated.
  • States have new responsibility to work out plan details with Medicaid managed care plans. The letter encourages states to establish agreements with Medicaid managed care plans to ensure that capitation is not received by the managed care plan while an individual is incarcerated. These decisions may limit a managed care plan’s willingness to reach into a public institution in order to engage with individuals who are ready to be released. The limits on a managed care plan that were clearly defined by this letter could be overcome in states that receive approval of an 1115 Medicaid waiver for targeted interventions behind the walls of a public institution. Last year, COCHS General Counsel Dan Mistak published an article describing four interventions that are essential for ensuring that incarcerated individuals are not left behind in the attempt to stem the opioid epidemic. States should consider this 1115 waiver as an option when trying to encourage the essential work of health plans and providers behind the walls of public institutions.
  • Jurisdictions must be careful about how they contract with jail health providers. In jurisdictions where the correctional provider has contracted to pay for inpatient stays, Medicaid reimbursement will not be allowed, but will remain the responsibility of the correctional provider. Jurisdictions and providers must examine their legal arrangements to fully understand who is the payer when an individual must receive an inpatient stay in a hospital.
  • The letter reaffirms that justice-involved individuals are members of our communities, not individuals that ought to be given second-tier services. The letter states that jurisdictions cannot expect FFP for creating facilities that will only serve justice-involved populations. This means that individuals cannot be sequestered in nursing home facilities that are not open to other members of the public. This, in particular, reaffirms what we know: individuals in the justice system are our neighbors, friends, and families, and for too long we have relegated them to the shadows of society.
  • “Being on the count” of a correctional institution does not disqualify an individual from FFP. Previously, jurisdictions had interpreted that if an individual were on the role count of a correctional facility, then they remained inmates and ineligible for FFP. This letter does not mention such a gross estimation of what it means to be an inmate. This leaves states with greater flexibility in managing and identifying how justice-involved individual’s records are maintained./li>
Although there is new clarity around many of these issues, the letter does not explicitly clarify whether or not an individual on work release or in non-residential day reporting centers in which they receive treatment for mental health or substance use disorder retain eligibility for Medicaid services while on probation or parole. Jurisdictions have many different legal definitions under which individuals are on work release and day reporting; the letter requires a nuanced and localized examinations of the “house rules” for such programs. Ensuring that an individual on work release or day reporting is able to “exercise personal freedom” will be a key, and local, task for ensuring FFP for Medicaid services.
COCHS appreciates this long-awaited clarification of the 1997 letter, particularly its understanding of the importance of eligibility and enrollment, maximizing access of Medicaid services for justice-involved individuals, and reaffirming that justice-involved individuals should be fully integrated into the Medicaid provider systems that exist. However, jurisdictions are tasked with now interpreting and updating their systems to ensure conformity with yesterday’s letter
COCHS wants to thank all of you for your continuous work to ensure that individuals in the criminal justice system are treated with the full dignity and respect that everyone deserves, and we are happy to join with you in continuing the battle.
Steven Rosenberg
Founder and President