Reflecting on Key Policy Developments from 2024 and Looking Forward to 2025  

This month’s consolidated article includes a recap of major topics covered in 2024 and looks forward, highlighting topics and health policy developments we will be monitoring in 2025. This past year, Health Policy News readers were interested in the innovations being done around Reentry Waivers (Mediciad coverage for justice-involved populations transitioning back into the community) and the various approaches states have included in demonstration waivers both approved and pending with the Centers for Medicare and Medicaid Services (CMS) for approval. Our top posts for 2024 included those articles that included insights and waiver tracking for Section 1115 Medicaid Reentry Waivers. HPN also produced a Section 1115 Reentry Demonstration Waiver Toolkit. We encourage states to use the toolkit, and email us at healthpolicynews@pcgus.com with any questions you may have.  

We share reflections on state re-entry related efforts and share what we will be watching in regards to reentry coverage, particularly looking forward to a new administration. We also share reflections and what to watch for related to two other key topics: Health Related Social Need and behavioral health coverage.  

In case you missed any of these articles when they were originally released, included below are links to our most-read posts from 2024:  

• • Revisiting Pending Medicaid 1115 Re-Entry Demonstration Waivers and Where They Stand  
  • CMS Finalizes Exchange Guidance for 2025  
  • Mandatory Coverage of Certain Pre-Release Services for Medicaid and CHIP Eligible Youth  
  • Insights into the Medicaid and CHIP Managed Care Access, Finance and Quality Rule  
  • Status Update: Medicaid 1115 Re-Entry Demonstration Waivers  

On our blog, you can access all our 2024 editions for information on all of the topics we covered in 2024.  

Reentry Services for Justice-Involved Populations 

As we look back on 2024, the momentum around increasing access to reentry services for justice-involved populations emerged as an important theme. CMS approved an additional nine Section 1115 Reentry Demonstration Waivers in 2024, bringing the total number to 11 states (CA, IL, KY, MA, MT, NH, NM, OR, UT, VT, WA). An additional 14 states (AZ, AR, CO, CT, HI, LA, MD, MI, NJ, NY, NC, PA, RI, WV) and the District of Columbia have applications pending with CMS, six of which were submitted in 2024. To support states seeking to expand access to justice-involved populations, the HPN Team developed a toolkit for states based on approved waivers and Federal guidance, including a State Medicaid Director Letter (SMDL).  

HPN also provided an overview of mandatory state coverage of certain pre- and post-release services for Medicaid and CHIP eligible youth, which will go into effect in January 2025. States are required to submit State Plan Amendments (SPAs) to CMS by March 31, 2025, with an effective date of January 1, 2025.  

Also this year, CMS also narrowed the definition of “custody” and amended the Medicare special enrollment period (SEP) for individuals who were formally incarcerated in the CY 2025 Medicare Hospital Outpatient Prospective Payment System. By amending “custody” to no longer include Individuals who are on bail, parole, probation, home detention, and who reside in halfway houses, CMS further destigmatized and improved access to Medicare services for justice-involved individuals.  

Finally, CMS has committed to helping states implement reentry services through state planning grants – the agency will support states in “addressing operational barriers and improving systems for continuity of care” as individuals transition back to their communities. States are eligible to receive between $1 and $5 million and will work with the agency over a four-year performance period.  

Top of mind looking forward is the SPA template CMS plans to release for states to follow when drafting their SPAs to cover pre- and post-release services for youth. Regarding these efforts more generally, all eyes will also be on pending waivers. CMS “has developed a standard demonstration application and special terms and conditions to expedite the approval of these requests” and continues to review pending applications efficiently, paving the way for many of these waivers to be approved. Longer term, given the number of states with approved and pending waivers, and the new requirement to provide Medicaid State Plan re-entry services for youth who are incarcerated pursuant to the 2023 Consolidated Appropriations Act, it will be logistically challenging for the new administration to reverse course. Although priorities will be shifting under the new administration, there is momentum across the country around providing access to services for justice-involved populations. The bulk of the services covered under these policy mechanisms are behavioral health-oriented and are intended to improve transitions in part by preventing costly ER visits and hospitalizations post-release, all of which generally have bipartisan support.   

As more states begin to implement their Section 1115 Reentry Demonstration Waivers, and as the reentry SPAs go into effect, it will be important to track service utilization and outcomes data across justice-involved populations.  

HPN will continue to closely monitor this developing policy area as we move into the new year. 

Health Related Social Needs 

Addressing Health Related Social Needs (HRSNs), including through state Medicaid programs, has been a top priority of the current administration. There has been a steady stream of HRSN guidance and activity. Early in 2024, we shared information about an Informational Bulletin CMS promulgated outlining opportunities for states to provide coverage of “clinically-appropriate and evidence-based” services and supports that address HRSN through Medicaid and the Children’s Health Insurance Program (CHIP). CMS outlined the ability to leverage authorities ranging from State Plan Amendments and a range of Medicaid waivers to managed care In Lieu of Services and Settings (ILOS) and CHIP Health Service Initiatives. States have taken action, submitting Section 1115 Medicaid Demonstration Waivers and other authority requests seeking to address HRSNs, with a number having been approved, including Section 11115 Waivers in Arizona, California, Hawaii, Florida, Massachusetts, New Mexico, New York, North Carolina, Oregon, and Washington State. These waivers include expanded Medicaid coverage aimed at addressing barriers to housing, nutrition, and employment.  

Also, this year, we shared insights regarding HRSN approaches highlighted at recent conferences – including insights from the Academy Health Conference about how states are leveraging partnerships with community-based organizations to address HRSNs, and lessons learned from early HRSN waiver state innovators, including related to evaluation, from the National Association of Medicaid Directors Conference. 

As we look forward to 2025 and a new administration at the Federal level, the first thing we will be keeping an eye on is, similar to the Reentry Waivers, how many of the pending HRSN waivers – including those submitted by Colorado, Rhode Island, and Utah – will be approved under the current administration. Of course, longer term, the question is the prospects for future HRSN proposals. While the priorities at the Federal level will inevitably shift, certain HRSN strategies have broader appeal, such as efforts to address barriers to housing and the impact of the housing security epidemic, particularly in urban areas. Similarly, tools aimed at increasing employment rates, supporting employment and employment readiness, may emerge as a component of or alternative to likely re-emerging of work requirement/community engagement waivers. It is worthy of note that HRSN waivers have been submitted from states across the political spectrum.  

We will also be watching any guidance shared by the new administration expressing their policy on HRSN coverage under Medicaid. Just this month, CMS issued an informational bulletin that provides clarifications and updates based on more recent experience, along with sharing prior guidance, requirements related to HRSN coverage, and available authorities for HRSN coverage, and underscoring how HRSN coverage advances Medicaid goals. PCG Health will be releasing our end-to-end health related social needs tool in early 2025, that allows states to ensure successful implementation of the fiscal, billing, reporting, data validation, and operationalization of HRSN policy infinitives.  

Behavioral Health and Substance Use Disorder (SUD) Services 

While there were many initiatives aimed at strengthening services in the behavioral health and substance use disorder (SUD) space this past year, we highlight two during this look at the top developments in 2024. In February Health Policy News covered a final rule issued on January 31, 2024, by the Substance Abuse and Mental Health Services Administration (SAMHSA) that updated regulations for opioid treatment programs (OTPs).  These changes originated through proposed rules issued by the Drug Enforcement Agency (DEA) and SAMHSA that were intended to roll-back Public Health Emergency flexibilities related to pre-pandemic restrictions on several prescribing practices, including prescribing treatment via telehealth in certain circumstances.  Notable changes made in the final rule included extending telehealth flexibilities, expanding prescribing providers, and broadening services and access. SAMHSA’s goal with this final rule is to ensure treatment in OTPs is used to its full potential and focuses on evidence-based, patient-centered care that can be delivered quickly. 

In March, we highlighted the release of a long-awaited update to the types of behavioral health providers allowed to enroll in the Medicare program. This change was included in the CY 2024 Medicare Physician Fee Schedule Final Rule and CY 2024 Medicare Hospital Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Payment System Final Rule, released at the end of 2023 and authorized by the Consolidated Appropriations Act, 2023. Medicare beneficiaries now have access to marriage and family therapists (MFT) and mental health counselors (MHC), increasing access to behavioral health services through a more available provider type. This change also had implications for State Medicaid Agencies processing claims for dual eligibles. CMS provided guidance in an informational bulletin that describes various approaches states can use to ease this change into their coordination of benefits processes.  

As we look forward, we will be keeping an eye on the impact the administration change could have on recent activity for states seeking to expand access to inpatient behavioral health and SUD treatment in Institutions for Mental Diseases (IMD).  Authority to provide treatment in an IMD is permitted through Section 1115 Waivers, managed care In-Lieu of Services (ILOS) authority, and Disproportionate Share Hospital (DSH) payments.  Nearly 40 states (with another 14 pending) have taken advantage of the Section 1115 Waiver path for IMD coverage. Over the remainder of the current administration, it is likely that we will see approvals of some of those pending waivers.  

We will also be watching the outcome of efforts under other authorities. The current administration recently released guidance highlighting an update to a lesser-used authority that offers states another path to provide SUD services in an IMD. Originally authorized under 2018’s “Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities” (SUPPORT) Act, CMS has permanently extended a previously temporary authority via Section 1915(l) of the Social Security Act to include a state plan option to provide services to Medicaid beneficiaries age 21 through 64 who have at least one SUD diagnosis and reside in an eligible IMD. Look for Health Policy News to provide additional coverage of this topic in 2025, where we will delve into changes included in the guidance related to: 

• • Maintenance of effort requirements 

• • Placement criteria and utilization management 

• • Review process for eligible IMDs 

• • SUD provider assessments 

States with existing 1915(l) State Plan Amendments must also comply with the new criteria introduced in this guidance.   

As states look forward to 2025, they should also note a new recommendation from SAMHSA and the Center for Disease Control and Prevention (CDC) urging SUD treatment programs to incorporate point-of-care (POC) Human Immunodeficiency Virus (HIV) testing within their facilities. The CDC notes that linking people with HIV to treatment is essential to prolonging their lives and preventing HIV transmission, and those who test negative may benefit further from being connected with HIV pre-exposure prophylaxis (PrEP) and syringe service programs. While not a Medicaid recommendation, it is one that states may want to work with Medicaid providers to implement.