Modifying Medicaid and CHIP exclusions relating to incarcerated individuals to allow for provision of mental health and substance use services

(a)

Medicaid option

(1)

In general

Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is amended, in the subdivision (A) following paragraph (31), by inserting , or, at the option of the State, in the case of an eligible inmate (as defined in paragraph (4) of section 1902(nn)), with respect to mental health and substance use services described in paragraph (5) of such section before ); or.(2)

Eligible inmate and mental health and substance use services defined

Section 1902(nn) of the Social Security Act (42 U.S.C. 1396a(nn)) is amended— (A)in the subsection header, by inserting

; Eligible Inmate; Mental Health and Substance Use Services

after

Public Institution

;(B)in the matter preceding paragraph (1), by striking and this subsection and inserting , this subsection, and the subdivision (A) following the last numbered paragraph of section 1905(a); and(C)by adding at the end the following new paragraphs:

(4)

Eligible inmate

The term eligible inmate means an individual of any age who is an inmate of a public institution and who— (A)was determined eligible for medical assistance under the State plan immediately before becoming an inmate of such a public institution; or(B)is determined eligible for such medical assistance while an inmate of a public institution.(5)

Mental health and substance use services

The term mental health and substance use services means such services for the treatment of a mental health condition or substance use disorder as the Secretary shall specify by regulation.

(b)

CHIP option

(1)

In general

Section 2110(b)(7) of the Social Security Act (42 U.S.C. 1397jj(b)(7)) is amended—(A)in the paragraph header, by striking

Exception

and inserting

Exceptions

;(B)by striking In the case of and inserting the following:

(A)

Provision of screening, diagnostic, referral, and case management services pre-release

In the case of

; and

(C)by adding at the end the following new subparagraph:

(B)

Provision of mental health and substance use disorder services while an inmate

(i)

In general

In the case of a child who is an eligible inmate, the child shall not be considered to be described in paragraph (2)(A) with respect to mental health services and substance use disorder services otherwise covered under the State child health plan (or waiver of such plan). (ii)

Eligible inmate defined

For purposes of this subparagraph, the term eligible inmate has the meaning given that term in section 1902(nn)(4), except that such section shall be applied by—(I)substituting child health assistance for medical assistance each place it appears; and(II)by substituting State child health plan under title XXI for State plan.

(2)

Technical amendment

(A)

In general

Section 5122(b) of division FF of the Consolidated Appropriations Act, 2023 (Public Law 117–328) is amended by striking paragraph (1).(B)

Effective date

The amendment made by this paragraph shall take effect as if included in the enactment of the Consolidated Appropriations Act, 2023 (Public Law 117–328).(c)

Increased Federal match for mental health and substance use disorder services furnished to incarcerated individuals

(1)

Medicaid

Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended—(A)in subsection (b), by striking and (ii) and inserting (ii), and (jj); and(B)by adding at the end the following new subsection:

(jj)

Increased FMAP for mental health and substance use services furnished to inmates

(1)

In general

Notwithstanding any other provision of this title except for paragraph (3), the Federal medical assistance percentage for a State, with respect to amounts expended by the State for medical assistance for mental health and substance use disorder services furnished to an eligible inmate (as such terms are defined in section 1902(nn)) shall be equal to 100 percent.(2)

Exclusion of expenditures from territorial caps

Any payment made to a territory for expenditures for medical assistance that are subject to the Federal medical assistance percentage specified under paragraph (1) shall not be taken into account for purposes of applying payment limits under subsections (f) and (g) of section 1108.(3)

Requirement to reinvest additional funds

As a condition for the receipt of the increase under paragraph (1) to the Federal medical assistance percentage of a State, the State shall demonstrate to the satisfaction of the Secretary that the State will use the Federal funds attributable to such increase only for the following purposes:(A)To improve health information technology and data sharing between State Medicaid programs, jails and prisons, and community-based providers and support organizations.(B)To increase the treatment capacity of community-based providers who are particularly attuned to, and able to serve, the specific needs of individuals who are involved with the justice system or at risk of becoming involved in the justice system.(C)To expand or enhance community-based reentry services and supports provided by the State to incarcerated and formerly incarcerated individuals, including services and supports designed to meet the health-related social needs of such individuals.

(2)

CHIP

(A)

In general

Section 2105 of the Social Security Act (42 U.S.C. 1397ee) is amended—(i)in subsection (b), by striking (11) and inserting (11), (12), and (13); and(ii)in subsection (c), by adding at the end the following new paragraph:

(13)

Enhanced payment for coverage of mental health and substance use disorder services

(A)

In general

Notwithstanding subsection (b) and subject to subparagraph (B), the enhanced FMAP for a State with respect to payments under subsection (a) for expenditures under the State child health plan (or a waiver of such plan) for mental health or substance use disorder services furnished to a targeted low-income child or a targeted low-income pregnant woman who is an eligible inmate (as such term is defined in section 2110(b)(7)(B)(ii)) shall be equal to 100 percent.(B)

Requirement to reinvest additional funds

The requirement described in paragraph (3) of section 1905(jj) shall apply to Federal funds attributable to an increase in the enhanced Federal medical assistance percentage of a State under subparagraph (A) in the same manner as such requirement applies to Federal funds attributable to an increase to the Federal medical assistance percentage of a State under paragraph (1) of such section.

(B)

Adjusting State CHIP allotments to account for increased payments for coverage of mental health and substance use services furnished to eligible inmates

Section 2104(m) of the Social Security Act (42 U.S.C. 1397dd(m)) is amended—(i)in paragraph (2)(B), in the matter preceding clause (i), by striking and (12) and inserting (12), and (13); and(ii)by adding at the end the following new paragraph:

(13)

Adjusting allotments to account for increased federal payments for coverage of mental health and substance use services for eligible inmates

If a State, commonwealth, or territory receives payment for a fiscal year under subsection (a) of section 2105 for expenditures that are subject to the enhanced FMAP specified under subsection (c)(13) of such section, the amount of the allotment determined for the State, commonwealth, or territory under this subsection—(A)for such fiscal year shall be increased by the projected expenditures for such year by the State, commonwealth, or territory under the State child health plan (or a waiver of such plan) for mental health and substance use disorder services furnished to eligible inmates (as defined in section 2110(b)(7)(B)(ii)(B)); and(B)once actual expenditures are available in the subsequent fiscal year, the fiscal year allotment that was adjusted by the amount described in subparagraph (A) shall be adjusted on the basis of the difference between—(i)such projected amount of expenditures described in subparagraph (A) for such fiscal year described in such subparagraph by the State, commonwealth, or territory; and(ii)the actual amount of expenditures for such fiscal year described in subparagraph (A) by the State, commonwealth, or territory under the State child health plan (or waiver of such plan) for mental health and substance use disorder services furnished to eligible inmates (as defined in section 2110(b)(7)(B)(ii)(B)).

(d)

Conforming amendments

(1)Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)), as amended by subsection (a), is amended, in the matter following paragraph (31), by striking set forth in the subdivision (B) following paragraph (30) of the first sentence of this subsection and inserting set forth in the portion of the first sentence of this subsection that follows the last numbered paragraph of this subsection.(2)Section 5122(a)(1) of division FF of the Consolidated Appropriations Act, 2023 (Public Law 117–328) is amended by striking case management and inserting targeted case management services.(e)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply with respect to medical assistance, child health assistance, and pregnancy-related assistance provided on or after January 1, 2023.(2)

Effective date of conforming amendment

The amendment made by paragraph (2) of subsection (d) shall take effect as if included in the enactment of the Consolidated Appropriations Act, 2023 (Public Law 117–328).