New CMS Guidance on the Provision of Medicaid and CHIP Services to Incarcerated Minors: Requirements

New CMS Guidance on the provision of Medicaid and CHIP Services to Incarcerated Minors: Requirements and Considerations for States

Compliance Deadline January 1, 2025

On July 23, 2024, the Centers for Medicare and Medicaid Services (CMS) released a State Health Official (SHO) letter, Provisions of Medicaid and CHIP Services to Incarcerated Youth. The SHO letter provides implementation guidance on Sections 5121 and 5122 of the Consolidated Appropriations Act, 2023, which: (1) require states to provide targeted case management (TCM) and screening and diagnostic services for Medicaid and Children’s Health Insurance Program (CHIP) enrolled children and youth who are incarcerated and post-disposition (e.g., children and youth who are incarcerated after conviction); and (2) offer states the option to provide full scope Medicaid and CHIP services to eligible children and youth who are incarcerated and pre-disposition (e.g., children and youth who are incarcerated prior to conviction). Eligible children and youth are defined as under 21 years of age, or between the ages of 18 and 26 and eligible for Medicaid under the mandatory former foster care eligibility group. The SHO letter lays out the expectations and timelines for states to operationalize the required and optional provisions of the law and provides important clarifications on CHIP eligibility policy. All provisions related to Medicaid and CHIP services for incarcerated children and youth are effective January 1, 2025.

Until now, due to a provision of federal Medicaid law known as the “inmate exclusion,” inpatient hospital care was the only service that could be covered by Medicaid for individuals considered “inmates of a public institution.” With the new CAA requirements and flexibilities, states can draw down federal financial participation to improve health outcomes by providing services to children and youth who are leaving incarceration and have disproportionately higher rates of physical and behavioral health needs than those who have not been incarcerated.

All states now face a significant amount of policy and operational planning work to implement these new requirements. The 24 states, which number does not include Louisiana, with either approved or pending section 1115 reentry initiative demonstrations may be better positioned to implement these requirements, but many will need to expedite their current planning and prioritize correctional facilities which serve children and youth to meet the compliance effective date of January 1, 2025. The local sheriff must implement these guideline; CMS is supposed to reach out to each state.