Health Policy News January : Special Edition

Special Edition

Re-Entry Updates: CMS Releases SPA Templates for Mandatory Reentry Services for Youth and New Funding Opportunity

This month the Centers for Medicare and Medicaid Services (CMS) released long-awaited guidance to assist states to come into compliance with the requirement to cover certain “pre-release and post-release” services for young people who are or were recently incarcerated under the SUPPORT for Patients and Communities Act (SUPPORT Act) and the Consolidated Appropriations Act of 2023 (CAA, 2023). That requirement goes into effect this month, and, in order to comply, most states will need to develop State Plan Amendments (SPA) by March 31, 2025. CMS released a State Health Official (SHO) letter in July 2024, which reviewed the mandatory services states must provide post-sentencing and the optional services states may provide pre-sentencing. For an overview of those services, see HPN’s article summarizing the SHO. CMS published a second SHO in December 2024, providing answers to frequently asked questions from states regarding provision of Medicaid and CHIP services to incarcerated youth. In this SHO, CMS provides guidance around the definition of “public institution” and how to productively partner with carceral facilities while navigating the differences between Medicaid agency and carceral facility systems.

In follow-up, CMS recently published three SPA templates that states must use to request authority to provide coverage of pre-release and post-release services for eligible youth.

SPA Template Title	Contents & Purpose
Mandatory Coverage for Eligible Juveniles who are Inmates of a Public Institution Post Adjudication of Charges	States must use this SPA template to indicate compliance with the following coverage requirements: The state has an internal operational plan in place under which it will provide the services detailed below to eligible juveniles within 30 days pre-release from a public institution post-sentencing: Screening and diagnostic services which meet reasonable standards of medical and dental practice. Includes behavioral health screening or diagnostic service Services should be provided in the 30 days before release, but no later than one week or as soon as practicable post-release. Targeted case management services includes referrals to appropriate care and services near the individual’s home or residence Services should be provided in the 30 days pre-release and for at least 30 days post-release. The state acknowledges that a correctional institution is considered a public institution (may include prisons, jails, detention facilities, or other penal settings).
Targeted Case Management Services for Eligible Juveniles	States must use this SPA template to indicate compliance with the service requirements for targeted case management (TCM) and indicate the scope and duration of TCM services. States may provide TCM beyond the 30-day post-release date TCM must be provided statewide Services are not comparable in amount duration and scope, as they are targeted This SPA template also provides a comprehensive definition of TCM, including the following federal coverage requirements: Comprehensive assessment and periodic reassessment; states must indicate the frequency with which they will conduct periodic reassessments Development of a specific plan of care based on assessment Referral and related activities Monitoring and follow-up activities; states must indicate the type and frequency of additional monitoring The SPA template indicates that states should facilitate a warm handoff between case managers to transition case management services and support continuity of care for eligible individuals. The template also includes a section in which states must indicate the qualifications of providers that are reasonably related to the population being served and the case management services furnished. The SPA template includes Freedom of Choice, Access to Services, Payment, Case Records, and Limitations sections.
Optional Coverage for Eligible Individuals Who are Inmates of a Public Institution Pending Disposition of Charges	States may use this SPA template to elect to cover all medically necessary section 1905(a) services provided consistent with the EPSDT requirements and any additional services as covered in the State Plan, waiver of state plan, and/or 1115 demonstration project for eligible individuals pre-sentencing.

Several states with approved Re-Entry 1115 Demonstration Waivers have been given the green light by CMS to cover mandatory State Plan service for eligible youth under their Re-Entry 1115 Demonstration Waiver, rather than under a SPA, for purposes of administrative ease and smoother implementation. States with approved and pending Re-Entry 1115 Demonstration Waivers should compare eligibility, services, and settings under their waivers with what is required under State Plan authority to ensure comprehensive coverage for all eligible youth.  For states considering submitting or amending broader re-entry demonstration waivers, click here for PCG’s toolkit.

Planning Grant Opportunity

CMS has initiated a Notice of Funding Opportunity (NOFO) to provide grant funding that supports the implementation of coverage for individuals who are inmates of public institutions for the following initiatives:

The statutory requirement to provide certain Medicaid and CHIP services to eligible juveniles in the 30 days prior to release from incarceration, and targeted case managed for at least 30 days post release for eligible Medicaid juveniles post adjudication from their release from a public institution; and to not terminate eligibility for medical assistance for individuals who are inmates of a public institution, effective January 1, 2026.

For a state electing to implement State Plan options related to providing Medicaid services, CHIP services, and/or both for eligible juveniles pending disposition of charges.

To promote continuity of care for individuals who are inmates of a public institution and are eligible for medical assistance under the state Medicaid program, for child health assistance, or pregnancy-related assistance under CHIP.

Use of Funds

Funds may be used for implementation expenses associated with:

Addressing operational barriers

Establishing and improving standardized processes and automated systems that aid in maintaining continuity of care following incarceration

Creating oversight and monitoring processes that ensure contracted entities are compliant with any applicable Medicaid and CHIP requirements.

Funds may not be used to provide medical assistance or to build or improve prisons, jails, or other carceral facilities other than those improvements that are for the direct and primary purpose of meeting the health care needs of individuals who are incarcerated and eligible for medical assistance.

Funding Amount and Period

This cooperative funding agreement with CMS is anticipated to provide between $1 and $5 million per awardee for the full four-year period of performance and budgeted in period increments of 12 months each.

Application

The first cohort of planning grant awardees was announced on January 13, 2024, and included 12 states. A second cohort of applications is being accepted January 16, 2025, through March 17, 2025. Any state that applied during the first cohort application period and was not awarded funding may apply again in the second cohort.