HHS Approves California’s Medicaid and Children’s Health Insurance Plan (CHIP) Demonstration Authority to Support Care for Justice-Involved People

Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), approved a first-of-its-kind section 1115 demonstration amendment in California which will provide a set of critical pre-release services and improve access to critically needed care for people returning home from jails and prisons.

For example, Medi-Cal will be able to cover substance-use treatment before a Medicaid beneficiary is released from jail, prison, or youth correctional facility. Additionally, the state will be able to help connect the person to community-based Medicaid providers 90 days prior to their release to ensure they can continue their treatment after they return to the community.

“The Biden-Harris Administration is focused on expanding access to health care across the country and doing so with equity in mind,” said HHS Secretary Xavier Becerra. “In partnership with HHS, the state of California is leading the way in providing coverage to justice-involved individuals. This is the first time in history Medicaid will be providing coverage to justice-involved individuals before they’re released. It is a step forward in closing gaps in services this underserved community experiences, and I encourage other states to follow California’s lead.”

“Today, we achieved a significant milestone in the expansion of health care coverage,” said CMS Administrator Chiquita Brooks-LaSure. “This demonstration allows us to make historic changes for incarcerated individuals who are eligible for Medicaid or CHIP. By helping these individuals access essential services and care coordination prior to release, we will also prevent gaps in care as they rejoin their communities.”

As part of the approval, California will also increase and sustain provider payment rates and Medicaid managed care payment rates in obstetrics, primary care, and behavioral health as a condition of the approval of authority to receive Designated State Health Program (DSHP) funding (which allows the state to access federal match dollars for certain health-related services previously funded only using state dollars). In obstetrics alone, this represents the potential for $60 million to be invested in the health of pregnant and postpartum women by increasing access to providers and therein improving health outcomes for pregnant women. Coupled with additional support for critical options like home and community-based services, the 1115 demonstration holds promise for transforming the nature of care.

Under the demonstration, California aims to achieve the following goals:

Consistent with CMS requirements for section 1115 demonstrations, California must undertake a comprehensive and rigorous evaluation of the demonstration.

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