Dec 23 Update

In This Week’s Update:

  • HHS Clarifies Medicaid Exclusions for Unlawful Activities
  • Providing Medicaid/CHIP Services to Incarcerated Youth
  • CMS Guidance on Providing Medicaid/CHIP Services to Incarcerated Youth
  • Streamlining Medicaid/CHIP Transitions
  • State updates: CA, CO, CT, MI, MN, NC, NJ, NY, OK, SC & WA

HHS Clarifies Medicaid Exclusions for Unlawful Activities
On December 11, the HHS Office of the General Counsel (OGC) released an advisory opinion clarifying the limits on states’ authority to exclude providers from Medicaid based on lawful activities conducted outside the Medicaid program. The opinion focuses specifically on providers who prescribe medication abortion, emphasizing a January 2023 opinion issued by the Department of Justice Office of Legal Counsel, which concluded that the Comstock Act of 1873 does not criminalize the prescribing or delivery of medication abortion “where the sender lacks the intent that the recipient of the drugs will use them unlawfully.” More broadly, HHS OGC has reaffirmed the general federal requirements that (1) Medicaid enrollees generally have the right to choose any willing and qualified provider, subject to certain exceptions, and (2) although states may define minimum qualifications for Medicaid programs, those qualifications must address the provider’s capability to “perform the required services in a professionally competent, safe, legal, and ethical manner” or “appropriately bill for those services.” HHS OGC could change its position again in the future, but this advisory opinion would bolster a lawsuit filed by a Medicaid enrollee or provider seeking to challenge a state exclusion policy based on a provider’s lawful activities outside the Medicaid program. Updates follow. 

Providing Medicaid/CHIP Services to Incarcerated Youth
Per section 5121 of the Consolidated Appropriations Act, 2023 (CAA), states are required to provide targeted case management, screening, and diagnostic services for children and youth who are incarcerated post-disposition and enrolled in Medicaid or CHIP. Manatt Health has developed a Correctional Facility and Implementation Partner Provider Bulletin Template to provide example guidance language for state Medicaid agencies to provide to correctional facilities and other partners as they are working towards CAA section 5121 implementation. This template is designed to be a starting point and should be modified to address specific state laws, regulations, policies, and operational processes.

CMS Guidance on Providing Medicaid/CHIP Services to Incarcerated Youth
On December 19, CMS released State Health Official (SHO) letter 24-006, “Provision of Medicaid and CHIP Services to Incarcerated Youth—FAQs,” which provides several clarifications for states on compliance expectations for implementing section 5121 of the Consolidated Appropriations Act of 2023. This expert perspective outlines key clarifications addressed in the SHO letter. 

Streamlining Medicaid/CHIP Transitions
Following the November release of guidance to support states’ efforts to verify eligibility and conduct renewals in compliance with federal Medicaid and CHIP requirements, CMS issued on December 20 two additional Center for Medicaid and CHIP Services Informational Bulletins (CIBs):

  • Renewal Form Guidance: The CIB outlines requirements related to renewal forms that states provide to Medicaid and CHIP enrollees. CMS offers detailed guidance on the required elements of the renewal form (e.g., which information should be requested and prepopulated), and the required modalities and timelines associated with the renewal form. The appendix to the guidance also includes a checklist that states may refer to for the elements that should be included in their renewal forms.  
  • Medicaid and Separate CHIP Transitions Guidance: The CIB provides guidance to help state effectuate a requirement (established in CMS’ April 2024 Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes final rule) that states seamlessly transition eligible children between Medicaid and separate CHIP beginning June 3, 2024. With this guidance, CMS is also exercising enforcement discretion and will not require state compliance with the following requirements until June 3, 2026: (1) that states send combined notices when a Medicaid-enrolled child is determined eligible for separate CHIP (and vice versa), and (2) that states transfer accounts of individuals who are procedurally disenrolled from Medicaid or CHIP to the Marketplace.

State updates: CA, CO, CT, MI, MN, NC, NJ, NY, OK, SC & WA

  • California 
    • The Department of Health Care Services (DHCS) announced CMS’ approval of California’s section 1115 demonstration, the Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) demonstration. The demonstration will establish a robust continuum of evidence-based community services for people with significant behavioral health needs, including providing up to six months of transitional rent for qualified members, supporting the health of children and youth involved in the child welfare system, and providing transitional care management services to support individuals with significant behavioral health needs who are returning to the community. CMS also approved an amendment to California’s Advancing and Innovating Medi-Cal (CalAIM) section 1115 demonstration, to provide Consolidated Appropriations Act, 2023 waiver authority related to the approved reentry demonstration initiative and expenditure authority for health-related social needs.
    • DHCS awarded $19.3 million to 25 organizations to support low-barrier opioid treatment at syringe services programs (SSP) from September 30, 2024, through September 29, 2027. Awardees include SSPs providing or supporting healthcare services such as assessment, prescription, and management of medication for the treatment of opioid-use disorder.
  • Colorado – Connect for Health Colorado, the state’s official health insurance marketplace, announced a record-breaking open enrollment period, with 256,051 Coloradans enrolled in health coverage that begins January 1. To date, the number of Coloradans who enrolled in health insurance plans for plan year 2025 is more than the total number of people (237,107) who enrolled through Connect for Health Colorado last year.
  • Connecticut – Governor Ned Lamont announced that nearly 23,000 Connecticut residents will have $30 million in medical debt erased under the first round of a newly launched partnership with the national nonprofit organization Undue Medical Debt. The state is leveraging approximately $100,000 from American Rescue Plan funds. As a reminder, SHVS has an expert perspective tracking state efforts to cancel medical debt and prohibit medical debt reporting to credit agencies.
  • Minnesota – The Minnesota Department of Health announced a request for proposal for a research or data analytics vendor team to conduct modeling analyses to estimate the impact of the Minnesota Health Plan—a system of universal healthcare with single-payer financing—on health insurance coverage, utilization, cost, and system capacity. This work will result in a final report which will be submitted to the Minnesota Legislature by January 2026, and proposals are due January 20, 2025.
  • New Jersey – New Jersey Department of Banking and Insurance Commissioner Justin Zimmerman announced that nearly 450,000 New Jersey residents have signed up for a 2025 health insurance plan through Get Covered New Jersey, the state’s official health insurance Marketplace, in the first five weeks of the state’s open enrollment period—a dramatic increase from 330,901 who had selected plans by this time last year. New Jerseyans continue to take advantage of historic levels of state and federal financial help, with the average amount of assistance at a record high of $604 per person per month for 2025 coverage, compared to $566 during the previous open enrollment period.
  • North Carolina 
    • Governor Roy Cooper announced more than 600,000 people have enrolled in Medicaid expansion in the first year of implementation, in half the time that was first projected. In the past year, 4.15 million prescriptions were filled by Medicaid expansion enrollees for heart health, diabetes, seizures and other illnesses; $62.2 million in claims for dental services have been covered by Medicaid for the expansion population; and more than 217,183 members of rural communities, or more than one in three of all newly eligible people, gained access to health coverage through Medicaid.  
    • The North Carolina Department of Health and Human Services announced a $1.5 million investment to expand behavioral health services in 10 school-based health centers across the state. The funds will enable the centers to expand their services, such as adding telehealth capabilities and implementing evidence-based screening and assessment tools. Some centers will be able to hire licensed behavioral health clinicians to provide behavioral health services directly to students.
  • Washington – The Washington Health Benefit Exchange announced that more than 271,000 Washingtonians either signed up for, or renewed, their health insurance through Washington Healthplanfinder since November 1. With five weeks remaining in open enrollment, these numbers have already exceeded the total for 2024.
  • Michigan, New York, Oklahoma, and South Carolina – CMS announced that state Medicaid agencies in Michigan, New York, Oklahoma, and South Carolina were selected to participate in the Innovation in Behavioral Health (IBH) Model. The IBH Model is focused on improving the quality of care and behavioral and physical health outcomes for adults enrolled in Medicaid and Medicare with moderate to severe mental health conditions and substance-use disorder.