Recent Centers for Medicare & Medicaid Services (CMS) guidance on an opportunity to support community reentry and improve care transitions for incarcerated individuals spotlights the unique challenges this patient population faces and how increased access to care can improve health outcomes.

In an April 2023 letter, CMS encouraged state Medicaid directors to leverage a new Medicaid Section 1115 waiver opportunity. The demonstration aims to increase coverage of and access to services for individuals preparing to leave incarceration while improving coordination and communication among correctional systems and community-based providers.

Returning to the community after incarceration comes with unique challenges, from alienation to figuring out housing and employment and avoiding reentry. Approximately 80 percent of returning community members have chronic medical, psychiatric, or substance use disorders.

Preexisting medical conditions, coupled with a range of unmet social needs, often result in adverse health outcomes and death for justice-involved individuals. Additionally, Black and low-income individuals make up a disproportionate percentage of incarcerated individuals, exacerbating existing disparities present among minority populations.

Historical Barriers to Care and Medicaid Innovation

Medicaid’s federal inmate exclusion policy prohibits coverage of most health care services provided to incarcerated individuals.

Clemens Hong, MD, director of community programs at association member Los Angeles County Department of Health Services, in Los Angeles, highlights the detrimental effect of a lack of health care insurance coverage in our country’s jails and prisons.

“This contributes to underresourced health care services in carceral settings and poor coordination of care at release, with big impacts on health disparities,” Hong says.

Untreated health conditions and poor health status are associated with increased recidivism rates and higher associated costs to the health care and criminal justice systems.

To combat this, states recently have adapted to coordinate care for incarcerated Medicaid enrollees, such as by suspending rather than terminating eligibility for enrollees who became incarcerated and by developing managed care requirements and fee-for-service initiatives related to pre-release care coordination.

California Waiver and Public Hospital System Involvement

CMS in January 2023 approved California’s Medicaid Section 1115 waiver request to cover a package of reentry services for eligible incarcerated individuals 90 days prior to release, charting the path for states to shift their attention to this issue even before CMS released guidance.

Incarcerated individuals must be eligible for Medicaid and meet a certain health criterion to qualify. All inmates of youth correctional facilities will be eligible for services 90 days pre-release without meeting any clinical criteria. California estimates that approximately 200,000 people each year will be eligible for pre-release services under the demonstration waiver.

The implementation of the waiver will create a more coordinated community reentry process, promoting health equity throughout California and creating a more sustainable system for providers and community-based organizations to deliver this kind of care.

Jackie Bender, chief of finance strategy at the Los Angeles County Department of Health Services, praises the waiver’s approval.

“We’re excited in California to be the first to launch it, and I think a lot of other states will follow,” she says. “[These] structural changes are building a system that works for people instead of making people navigate the system.”

Those reentering their communities will have a foundation for care continuity established before they leave jail or prison, creating a smoother transition for both patient and provider and “taking the onus off the individual” as they reenter their community.

Essential hospitals play a large role in providing and overseeing care to individuals in carceral settings and supporting re-entry into the community. The waiver will allow health systems already involved in correctional health to leverage Medicaid funding to cover a subset of these services. The California Association of Public Hospitals and Health Systems and the California Health Care Safety Net Institute, along with several other association members, are participating in the state’s justice-involved advisory groups.

California has created an open door for discussion through the advisory groups and gathered input from stakeholder input, including essential hospitals, to design the policy. This approach aligns with California Advancing and​ Innovating Medi-Cal (CalAIM), a long-term commitment to strengthen Medi-Cal, offering Californians a more equitable, coordinated​, and person-centered approach to maximizing their health.

Amanda Clarke, senior director of programs for the California Health Care Safety Net Institute, emphasizes the key role hospitals will play in implementing this new system.

“Our members are central in CalAIM and many were leads on Whole Person Care, the precursor to CalAIM, and now around enhanced care management and community supports,” Clarke says. “They’ll continue to be central players…in implementing the justice waiver.”

Looking Ahead

California is the first but hopefully not only state to take this important and necessary step to improve health outcomes for incarcerated individuals, an often-overlooked population. Currently, 14 states seek partial waivers to the inmate exclusion policy to provide pre-release services to some eligible incarcerated individuals.

Improving access to community resources that meet this population’s health care and health-related social needs is crucial to improving health outcomes, mitigating health disparities, and reducing emergency department visits.

Moving forward, it is imperative that essential hospitals, which often provide care for these populations, are involved in building the model as they continue to advocate for access to high-quality health care for all.