Last week, many in the Medicaid and CHIP community were focused on CMS’s announcement of guidance to states on Medicaid EPSDT requirements (and for good reason). However, we also wanted to make sure folks saw the new notice of funding opportunity for planning grants to state Medicaid and CHIP agencies to develop operational capabilities to support the continuity of care for individuals eligible for Medicaid and CHIP who have been incarcerated. 

Background 

As highlighted in our issue brief explaining the mental health and substance use disorder provisions included in the Consolidated Appropriations Act (CAA) of 2024, passed in March, Congress provided the Secretary of Health and Human Services with over $100 million in funding to award and administer grants to states to support operational capabilities that promote continuity of care for individuals who are inmates of a public institution and are eligible for Medicaid or CHIP (including pregnancy related assistance under CHIP). 

Under the planning grant provision, states may use grant funds for activities and costs associated with complying with new requirements or adopting state plan options included in the bipartisan 2023 and 2024 Consolidated Appropriation Acts as well as other activities and expenses to promote continuity of care for these populations. 

Support for New Requirements and State Option 

Accordingly, grant funds may be employed to support implementation of the CCA 2023 provision requiring state Medicaid and CHIP programs, starting January 1, 2025, to provide certain screening, diagnostic, and targeted case management services to Medicaid and CHIP-eligible youth in juvenile settings during the time of release. Grants can also be used to support the new state option to provide Medicaid and CHIP coverage to youth in juvenile settings during the initial period pending disposition of charges. 

CMS guidance on these youth-focused provisions, including background and state implementation considerations and requirements, can be found here. As noted in the guidance, according to 2019 data, on any given day, over 36,000 youth in the United States are confined in juvenile justice detention centers and juvenile long-term secure facilities. This includes many youth of color, including black youth, who account for a significantly higher proportion of this population. 

Among other things, planning grant funding may also be employed to support activities and expenses related to complying with the CAA 2024 requirement that states suspend rather than terminate Medicaid or CHIP coverage for individuals who are inmates of public institutions starting January 1, 2026. 

As noted in our May issue brief, states are currently required to suspend rather than terminate Medicaid coverage for youth in juvenile settings (mandated by the bipartisan 2018 SUPPORT Act). However, under the CAA 2024, starting January 2025 for youth and 2026 for adults, states will also be required to do the same for youth covered by CHIP and all individuals covered by Medicaid and CHIP, including pregnant people. 

According to the Medicaid and CHIP Payment and Access Commission, suspending Medicaid coverage rather than terminating it allows individuals to more quickly gain coverage upon release. With an estimated 44% of individuals in jail and 37% of those in prison having a mental health condition and 63% of people in jail and 58% in prison having a substance user disorder and with higher rates of chronic illness, ensuring access to timely health coverage and care is of critical importance. In recognition of meeting health care needs during  this important transition period, 11 states have received CMS approval to provide pre-release services to certain Medicaid eligible incarcerated individuals, with over a dozen more states with waivers pending.

Next Steps

According to CMS, up to $106,500,000 in available funds will be awarded to up to 56 state recipients (including DC and the territories) for a 4-year period and estimated grant range of $1 million to $5 million per recipient. Applicants will also have two opportunities for submitting applications – Cohort 1 due by November 26, 2024 and Cohort 2 due by March 17, 2025. States may also submit an optional notice of intent by October 28, 2024 and February, 2025 respectively. 

Additional details on the state planning grant opportunity, including the full notice of funding opportunity and application portal, can be found on Grants.gov.