California’s Justice-Involved Medicaid Initiatives: Good on Paper but No Bite?

California incarcerates approximately 494 per 100,000 people in prisons, jails, immigration detention, and juvenile justice facilities. Incarcerated individuals face many behavioral health challenges while incarcerated. For example, the number of incarcerated individuals in California jails with active mental health conditions rose by 63% in the last decade. Moreover, 66% of Californians in jails or prisons have moderate or high need for substance use disorder treatment, and overdose is the leading cause of death for people recently released from incarceration. Individuals incarcerated in California have an overdose rate that is more than three times the rate of incarcerated people nationwide.

Transitioning out of incarceration, individuals released from corrections facilities (hereinafter referred to as carceral facilities) face multiple challenges to obtaining and maintaining healthcare coverage. These individuals face significant issues, including enrolling and reenrolling into health coverage through Medicaid, Medicare, and other private coverage such as an employer-based coverage. Moreover, justice-impacted individuals face barriers in the coordination of health and behavioral services in the community, transitions between programs and services (probation/parole, county behavioral health and health agencies, and other service providers), gaps in eligibility when transitioning between programs, and administrative barriers to entering and/or reinstating healthcare benefits (e.g., application processing, eligibility, timeline requirements, and other administrative burdens).

CalAIM and the CalAIM Justice-Involved Reentry Initiatives

Addressing the healthcare needs of individuals transitioning out of incarceration has been a focus of the Centers for Medicare and Medicaid Services (CMS). In fact, CMS encourages states to apply for or amend 1115 waiver programs to include expanding Medicaid services to justice-impacted individuals transitioning from incarceration. Typically, under the Inmate Exclusion Rule, carceral facilities are responsible for the healthcare costs of incarcerated individuals, and federal funds such as Medicaid funds cannot be used to cover such services. In circumstances where an incarcerated individual requires inpatient care, Medicaid funds may be used to cover the cost of inpatient stays and treatment. Otherwise, incarcerated individuals generally have their Medicaid benefits suspended and then terminated while incarcerated.

California expanded its Medicaid program (hereinafter referred to as Medi-Cal) to increase access to Medi-Cal and covered services to justice-impacted individuals under the California Advancing and Innovating Medi-Cal (CalAIM, also referred to as Transforming Medi-Cal). Transforming Medi-Cal was enabled both through California Assembly Bill 133 (AB 133) and through an 1115 waiver application and amendment. Transforming Medi-Cal includes several expansions to existing Medi-Cal programs and policies and new programs and policies as well. Several expansions are meant to directly impact justice-impacted individuals including: (1) suspending Medi-Cal rather than terminating it for long-term incarceration, (2) pre-release applications, (3) pre-release services and behavioral health linkages, (4) Enhanced Care Management, and (5) Community Supports.

Medi-Cal Suspensions

Individuals who have Medi-Cal prior to being incarcerated are suspended from Medi-Cal upon incarceration. Historically, in California, individuals incarcerated for more than a year were terminated from Medi-Cal. However, changes in federal and California state law have effectively removed termination of Medi-Cal due to incarceration. First, effective January 1, 2021, Section 1001 of the federal SUPPORT Act prohibits terminating Medicaid for incarcerated youth but rather allows for suspension only. California expanded upon this prohibition by amending Welfare and Institutions Code § 14011.10(e) to expand the SUPPORT Act’s suspension policies to incarcerated adults. The amended law was effective January 1, 2023. Adults incarcerated starting before January 1, 2023, were suspended until release or terminated from Medi-Cal if incarcerated for a year or more. Individuals incarcerated starting January 1, 2023, and after are suspended until released and will not be terminated from Medi-Cal if incarcerated for more than a year. California Department of Health Care Services (DHCS) has further clarified that individuals who are incarcerated for fewer than 28 days should not be suspended. However, for individuals incarcerated for more than 28 days, carceral facilities should notify the county that the individual is incarcerated and the county should suspend the individual’s Medi-Cal.

Pre-release Applications

Under the 1115 waiver, DHCS has standardized a pre-release Medi-Cal application process for individuals transitioning from incarceration. Carceral facilities and Medi-Cal offices are required to facilitate the enrollment of eligible incarcerated individuals into Medi-Cal within 90 days prior to their release date. However, these timelines can be affected by factors such as release under Compassionate Release, medical parole, re-sentencing, transitional programs such as the Male Community Reentry Program (MCRP), and other circumstances that may cause release from incarceration sooner than expected. Moreover, the same application timelines still apply: Medi-Cal has up to 90 days to process the application if the application is based on disability. Once enrolled, the consumer will have 90 days to either choose a managed care plan (MCP) or one will be selected for the consumer. Therefore, where possible, DHCS is strongly encouraging carceral facilities and counties to identify potentially eligible individuals as soon as 135 days prior to their release to get ahead of the deadlines. Moreover, the DHCS encourages the use of accelerated enrollment processes to get ahead of circumstances where it is not possible to enroll the individual through typical application processes within 90 days prior to release.

Once a determination is made, the county Medi-Cal offices will issue a notice of action indicating if the individual is determined to be eligible or not. Notices may be sent to the last known address or to where they are incarcerated. For minors, the Notice of Action may be sent to where they are considered a member of a household or to where they are incarcerated. DHCS has issued guidance for adverse determinations, saying incarcerated individuals should still have the right to appeal by asking for a state fair hearing. Further this guidance states that individuals should be provided the ability to appear for the hearing while incarcerated. State fair hearings for non-incarcerated individuals are currently available in person or (facility) via telephone or videoconference.

Pre-release Services and Behavioral Health Linkages

Effective October 1, 2024, a two-year implementation period began for the provision of targeted Medi-Cal covered services 90 days prior to release from incarceration. Additionally, behavioral linkages and services are to be provided during this 90-day pre-release period. To qualify for the services, the individual must qualify for Medi-Cal and must have one of the following: (1) mental illness, (2) substance use disorder, (3) chronic condition/significant health condition, (4) intellectual or developmental disability (I/DD), (5) traumatic brain injury (TBI), or (6) HIV/AIDS, or (7) be pregnant or post-partum. The services to be provided are:

1. Re-entry case management
2. Physical and behavioral health consultations
3. Laboratory and radiology services
4. Medications and medication administration
5. Medications for addiction treatment (MAT)
6. Services provided by community health workers who have lived experience
7. Minimum 30-day supply of prescribed and over-the-counter medications for release if approved by Medi-Cal Plan
8. Durable medical equipment

Individuals who qualify for pre-release services automatically qualify for Enhanced Care Management (ECM) until reassessment by their MCP shortly after release. In addition to the above services, carceral facilities will be required to facilitate referrals/linkages to post-release behavioral health providers and health information with the individual’s MCP. Individuals should be assigned to a pre-release care manager and the pre-release care manager must: (1) share the transitional care plan with the assigned post-release care manager and MCP and (2) schedule and conduct a pre-release care management meeting.

Enhanced Care Management

ECM builds upon previous wrap-around services and is intended to help consumers with both health-related needs and social determinants of health. It involves comprehensives care management to address both health issues and the social issues impacting the consumer and their health. ECM began implementation effective January 1, 2022, and ECM for specific target “populations of focus” have slowly gone live, including the “Individuals Transitioning from Incarceration Population of Focus,” which started January 1, 2024, but only for individuals already released but who were within 12 months of being released. ECM was to go live for individuals within the 90-day period prior to release effective October 1, 2024, but the majority of counties have not yet submitted their readiness assessments to the DHCS to determine if they can move forward with implementation of ECM for individuals in the process of being released from incarceration. Justice-impacted individuals qualify for ECM if they are currently leaving incarceration or have left incarceration in the past 12 months and have one of the following conditions: (1) mental illness, (2) substance use disorder, (3) chronic condition/significant health condition, (4) I/DD, (5) TBI, or (6) HIV/AIDS, or (7) are pregnant or postpartum.

ECM services are covered by the MCP. Individuals can request ECM services directly from their MCPs. ECM must be authorized within five days (or 72 hours if expedited/urgent need identified). ECM is “high touch” and must include a high level of in-person contact where the member lives, seeks care, and prefers to access services. ECM is also “whole person,” meaning it spans all medical, behavioral, social, and oral, and long-term care services and supports (LTSS) needs that members experience. MCPs are required to issue Notices of Adverse Benefit Determinations (NOABDs) for denials, delays, terminations, or reductions. Members may submit plan appeals and grievances and can submit a request for state fair hearing if their internal appeals is not adjudicated timely (30 days) or if they receive an unfavorable outcome).

Community Supports

Finally, Community Supports are services that MCPs can opt in to provide coverage to address health-related social needs. There are 14 specific services, which include:

1. Housing transition navigation services
2. Housing deposits
3. Housing tenancy and sustaining services
4. Short-term post-hospitalization housing
5. Recuperative care (medical respite)
6. Day habilitation programs
7. Caregiver respite services
8. Personal care and homemaker services
9. Nursing facility transition/diversion to assisted living facilities
10. Community transition services/nursing facility transition to a home
11. Environment accessibility adaptions (home modifications)
12. Medically tailored meals/medically supportive food
13. Sobering centers
14. Asthma remediation

An individual can receive both community supports and ECM. MCPs are required to follow DHCS’s standard eligibility criteria for each Community Support. Further, while Community Supports are optional services, they are (1) subject to plan-to-notice (e.g., NOABD) requirements for denials, delays, reductions, and discontinuances and (2) subject to the plan grievance and appeal process, as well as the state fair hearing process.

Where Do the CalAIM Justice-Involved Initiatives Fall Short?

There are several legal, logistical, and practical concerns regarding the implementation of the CalAIM Justice-Involved initiatives. The CalAIM Justice-Involved initiative policies place large burdens of responsibility on carceral facilities for each of the services above with limited to no legal authority to do so. Moreover, there are several potential practical and logistical challenges that may present themselves. This section will review specific issues for each of the five initiatives discussed above.

Medi-Cal Suspensions

In order for county Medi-Cal offices to become aware that an individual has become incarcerated, the carceral facility must notify the county Medi-Cal office. This may not present so much of an issue for individuals incarcerated longer-term in state and federal prisons; however, this likely presents challenges for shorter-term carceral facilities such as county jails, given the larger volume of individuals processed and turned over in those facilities. Moreover, even though individuals who are incarcerated for fewer than 28 days shall not be suspended from Medi-Cal, it likely requires substantial coordination to track who shall be incarcerated for fewer or greater than 28 days in county jails. However, even if there is a failure of the carceral facility to communicate to the county and the individual is not suspended from Medi-Cal, this is unlikely to harm the consumer as they will have active Medi-Cal after release.

Pre-release Application

The pre-release applications present challenges for incarcerated consumers with limited to no legal recourse. DHCS has issued guidance regarding the steps that carceral facilities and county welfare departments must take to facilitate the enrollment of individuals transitioning from incarceration into Medi-Cal. The steps for the carceral facilities are:

1. Identify individuals who are interested in applying for Medi-Cal.
2. Verify the current Medi-Cal enrollment status of the individual or youth.
3. Meet with the incarcerated individual to answer application questions, assist them in completing the pre-release application, and gather other required documentation that may be beneficial to the County Welfare Departments (CWD) to process the pre-release application.
4. Complete the coversheet/transmittal to submit the pre-release application, which must contain the following minimum information: (1) the name and address of the corrections facility along with contact information of the designated worker assisting the applicant; (2) incarcerated person’s full name (including any known aliases), inmate number, date of birth, Social Security number, county and address where the individual intends to reside, the mailing address, and contact information of any Authorized Representative, or legal guardian (if applicable); the date of incarceration and expected release date; and any other identification documentation or information that may be helpful to the CWD.
5. Submit the completed application and coversheet/transmittal to the CWD in the county where the incarcerated individual is expected to reside upon their release.
6. Communicate with CWD and work with the applicant to assist with application questions, requests for verification or follow-up information, and any other items necessary for CWD to process the pre-release application.
7. Inform the applicant about the outcome of their application and the Medi-Cal determination made by the CWD, including distributing any Notices of Action or Medi-Cal documentation received by the facility for the individual.
8. Provide individuals with their CWD’s contact information upon release and advise them of their responsibility to report any household changes to their CWD within 10 days.
9. Keep CWD informed of any changes in the individual or youth’s information.

These are substantial responsibilities.

Notably, while planning CalAIM implementation, DHCS convened the CalAIM Justice-Involved Working Group with key stakeholders including representatives from carceral facilities from October 28, 2021, through present. However, there is limited or no statutory authority requiring the carceral facilities to follow these exact steps. Though California Penal Code 4011.11(a) required the board of supervisors in each county to work with the county sheriff to designate an entity or entities to assist jail inmates with the applying for affordable health coverage, this statute is broad, vague, and does not specifically assign responsibility to county carceral facilities. Further, though the California Department of Corrections and Rehabilitation (CDCR) does work with DHCS to facilitate applications to Medi-Cal, there is no binding authority beyond an interagency agreement to do so.

Further, the right to state fair hearing for adverse Medi-Cal determinations does not cover carceral facilities to properly follow the above listed steps. The state fair hearing process for Medi-Cal determinations is overseen by the California Department of Social Services (CDSS), and they do not have jurisdiction over carceral facilities in California. Administrative appeals for state prisons are overseen by CDCR. County jails are generally responsible for their own grievance and appeals procedures under the California Board of State and Community Corrections (BSCC) regulations.. Neither the CDCR and BSCC appear to provide an administrative remedy for failure of carceral facilities to follow the above listed steps. It is not clear what remedies would be available to incarcerated individuals for the carceral facilities’ failure to properly assist the individual in enrolling in Medi-Cal prior to release.

Pre-Release Services and Behavioral Health Linkages

Carceral facilities are expected to play a significant role in the delivery of pre-release services and behavioral health linkages. The carceral facilities need to deliver operational processes to both (1) allow in-reach providers to provide services and (2) develop billing/claims processes with DHCS to confirm that services have been provided when furnished by carceral facility providers. Such processes must support: (1) assignment of pre-release care manager; (2) in-reach care management and clinical consultations; (3) delivering medication services, MAT, and labs/radiology; and (4) post-release medication and DME. On the behavioral health front, the carceral facilities are responsible supporting delivery of (1) medications to treat substance use disorders (SUDs), (2) clinical consultations, and (3) pre-release care management/post-release ECM. All of these require significant time and resources in (1) screening for eligible individuals, (2) data sharing with counties, (3) consultation and connection with community providers, and (4) sharing of records. Carceral facilities in each California county were required to complete and submit readiness assessments for the provision of these services by April 1, 2024, but as of December 9, 2024, the vast majority of counties had failed to submit their readiness assessments. Those who have submitted their readiness assessments are under review, and none have been approved by DHCS.

Similar to the concerns outlined above regarding the pre-release applications, there are legal and practical concerns regarding the carceral facilities supporting the provision of pre-release services. There does not appear to be specific legal authority over carceral facilities to provide such services. Broadly speaking, penal code section 4011.11(h)(5) does require county carceral facilities to work with the counties develop operational processes for facilitating behavioral health links. However, again, this statute is broad and vague and does not seem to bind county carceral facilities to following the specific requirements outlined in DHCS’s Justice-Involved Policy Guide. One glimmer of hope is that carceral facilities are required to provide medical services to incarcerated individuals for the duration of their incarceration. However, the pre-release services and behavioral health linkages are targeted Medi-Cal covered services and may go beyond the minimal requirements set forth by the regulations promulgated by CDCR and BSCC and therefore, such regulations would not extend to the provision of the pre-release services and behavioral health linkages. Moreover, it is unclear what remedies would be available to incarcerated individuals for carceral facilities’ failure to provide pre-release services, as such facilities are not regulated by DHCS or subject to the adjudicatory authority of CDSS under the state fair hearing process.

Enhanced Care Management and Community Supports

ECM and Community Supports are services and benefits that are generally delivered through MCPs. For individuals transitioning out of incarceration who are still incarcerated, ECM will be delivered through fee-for-service Medi-Cal, even when the individual has been enrolled in an MCP. Individuals must qualify for Medi-Cal to access ECM services prior to release. However, if there are delays in application processing by either the carceral facilities or county Medi-Cal offices, individuals may not be connected to ECM prior to release, may not receive information regarding which MCP they are in enrolled in for the purposes of requesting ECM, or may be lost to contact and therefore lose out on the ECM benefits.

Conclusion

While the CalAIM Justice-Involved initiatives may sound like an improvement in healthcare access for individuals leaving incarceration, it is not clear that these initiatives will be successful. Substantial responsibility is placed on carceral facilities without strong legal authority to do so. Moreover, it is not clear where liability lies for carceral facilities failing to follow the polices set out by DHCS and whether there are remedies available to incarcerated individuals for such failures when not the fault of county Medi-Cal offices or MCPs. To make CalAIM Justice-Involved Reentry Initiatives more effective, substantial policy changes need to be made to either to said initiatives or to law and policy governing carceral facilities to (1) incentivize carceral facilities to fulfill their obligations under CalAIM and (2) provide routes to remedies to individuals impacted by carceral facilities failing to fulfill such obligations.