Opportunity for States to Address Continuity of Care for People Who Have Been Incarcerated

In the United States, there are about 1.9 million people in prisons and jails nationwide, approximately 35,500 of whom are youth. However, these figures do not represent the turnover in and out of correctional facilities. For example, in 2022, people went to jail more than seven million times. At least one in four people who go to jail will be arrested again, underscoring the need for comprehensive support and services to help reduce recidivism.  Justice-involved individuals have many pressing needs when leaving incarceration such as finding employment, securing stable housing, reconnecting with their community, and receiving essential mental health support. Thirty-seven percent of people held in state and federal prisons, and 44% of people held in local jails have a history of mental illness. In addition, many people who are justice-involved have experienced trauma during their incarceration and many will experience chronic stress due to the challenges they face when reintegrating back into the community.   

Opportunities Through Medicaid and CHIP Funding  

Historically, federal law has prohibited the use of federal Medicaid dollars for inmates of public institutions with limited exceptions. However, Section 1001 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (SUPPORT Act) includes provisions that support state use of federal Medicaid dollars to address continuity of care and successful transition to the community following incarceration for justice-involved youth. 

In September 2024, the Centers for Medicare & Medicaid Services (CMS) announced a Notice of Funding Opportunity (NOFO) for State Planning Grants to address continuity of care for justice-involved Medicaid and CHIP beneficiaries. This includes beneficiaries incarcerated in state-operated prisons, local, county jails and tribal jails, and youth correctional or detention facilities. For Medicaid-eligible individuals, this opportunity can help states develop and strengthen transition services to help individuals access necessary treatment and services to support smoother re-entry to their communities. 

The Importance of Trauma-Responsive Approaches 

Aurrera Health Group has worked closely with several state and county agencies to leverage the science of trauma and toxic stress, as well as best practices and strategies to address the effects of adversity for justice-involved youth, their families, and the organizations serving them. This funding opportunity presents an opportunity for states to consider where to incorporate more comprehensive supports that include trauma-responsive approaches to address the needs of individuals who have been incarcerated. For example, in the NOFO requirements outlined below, states must provide certain screening, diagnostic, and case management services. These services could incorporate trauma-responsive approaches in how they are provided, such as including trauma screenings, as well as referrals to community-based resources and supports to help individuals who have experienced trauma most effectively and promote healing and resilience.  

CMS Requirements for State Planning Grants to Promote Continuity of Care for Medicaid and CHIP Beneficiaries Following Incarceration 

The NOFO references Section 205 of the Consolidated Appropriations Act (CAA), 2024, as well as the CAA, 2023 requirements for providing services to justice-involved youth prior to release, which states must comply with effective January 1, 2025. The CAA, 2024 also allows for optional implementation of the same measures for adults who are incarcerated. 

Table 1. Requirements for Provided Services Prior to Release

Optional / Mandatory	Service / Description	Timeline	Population
Mandatory	Targeted Case Management • Comprehensive assessments • Development of person-centered care plans • Referrals and related activities • Monitoring and follow-up activities	30 days pre-release and 30 days post-release	Individuals who are under 21 (and former foster youth who are under 26) who were determined Medicaid-eligible prior to or while incarcerated in a public institution
Mandatory	Screening and Diagnostic Services: • Medically necessary screenings and diagnostic services that meet reasonable standards of medical and dental practice consistent with EPSDT requirements • Includes mental health and substance use disorder screening and diagnostic services	30 days pre-release, or not later than one week, or as soon as practicable, post-release	Individuals who are under 21 (and former foster youth who are under 26) who were determined Medicaid-eligible prior to or while incarcerated in a public institution
Mandatory	Screening, Diagnostic, and Case Management Services: • Screening, diagnostic, and case management services otherwise available under the State Plan or waiver	30 days pre-release	CHIP-eligible individuals who are incarcerated and within 30 days of release
Optional	Full range of Medicaid or CHIP services	Entire period pending disposition	Eligible youth pre-adjudication

Key Considerations for States Ahead of Implementation 

As states look toward the January 1, 2025, implementation of the federal requirements, many activities must be considered. States will need to coordinate with state and local corrections facilities and, in states with managed care, the Managed Care Organizations to ensure the delivery of mandatory services. This coordination will require proper operational support and clearly defined processes.  

In addition, information and technology system changes will be needed to manage the added enrollment and claims processing. These implementation considerations are a large administrative lift for states and not addressing them could lead to barriers in providing services. However, the NOFO provides funding that can help states address these barriers through activities including identifying and addressing operational gaps, IT systems and processes, as well as oversight and monitoring.  

Moving Toward Improved Outcomes for Justice-Involved Populations 

We look forward to seeing how states will leverage this funding to broaden their capacity and readiness to better coordinate necessary care to support justice-involved individuals transitioning from incarcerated settings.  

Aurrera Health Group Can Help You 

If you are interested in learning about how Aurrera Health and our Pathways to Resilience Initiative can help you implement healing-centered and trauma-responsive programs, policies, and training, please contact us to learn more about how we can support you.  

Vimbai Madzura [Deputy Director]

Catherine Gekas Steeby [Deputy Director] (Copy)