Can Medicaid Help Improve Opioid Use Disorder Treatment in Correctional Facilities?

Individuals involved with the criminal legal system have high rates of opioid use and are disproportionately low income, meaning that the majority of them qualify for Medicaid coverage. But federal law prohibits Medicaid from paying for health services, including opioid use disorder (OUD) treatment, during incarceration, or the confinement of an individual in prison or jail, a prohibition often referred to as the “inmate exclusion.”

At the same time, few jails and prisons provide medications for OUD—methadone, buprenorphine, and naltrexone—which are the standard of care for the condition, regardless of treatment setting. But individuals who are incarcerated need access to these medications more than ever. Substance use-related deaths during incarceration have increased in the past few years, and individuals who are incarcerated are at increased risk of overdose death in the weeks immediately following release. Importantly, studies have shown that individuals treated with methadone during incarceration more frequently continued treatment after release, and patients who received buprenorphine had less involvement with the criminal legal system post-incarceration.

Lawmakers push for Medicaid financing of correctional health care

Jail and prison administrators often cite inadequate funding for both OUD medications and the staff necessary to dispense them as reasons why their facilities don’t offer treatment. Current proposed legislation in Congress aims to change that situation by creating a new funding stream for correctional health care, which could include OUD treatment. Specifically, the Medicaid Reentry Act of 2021, the Due Process Continuity of Care Act, and the Humane Correctional Health Act would, respectively, for the first time authorize Medicaid to cover services for patients 30 days before release from incarceration, for individuals detained pretrial, and for all eligible individuals for the duration of their incarceration. Additionally, several states have petitioned the Centers for Medicare and Medicaid Services (CMS) to cover at least some components of correctional health care via the agency’s Section 1115 demonstration waiver program, which allows states to implement pilot programs with Medicaid dollars. But as of March 2022, CMS had not yet acted on any of the petitions.

A Medicaid funding stream for OUD treatment in jails and prisons would reduce some major barriers to initiating lifesaving care. However, because Medicaid has never paid for any aspect of correctional health care, there is no existing regulatory or implementation guidance on standards for quality care, performance measures, and payment models in correctional facilities that could help support reimbursement efforts.

Meeting Medicaid standards

CMS evaluates how Medicaid programs perform on core health care quality measures for care provided to beneficiaries, as well as input from enrollee satisfaction surveys, to improve the delivery of health care within the Medicaid program. Jails and prisons currently lack uniform health care quality measures, so many facilities would have to adapt to meet the quality, service delivery, and data reporting expectations the Medicaid program will likely set before covering any services. In setting these expectations, the Medicaid program should consider the varying degrees of staffing capacity and infrastructure needed to implement medication dosing in correctional facilities.

Implementing Medicaid reimbursement of correctional health care

Medical providers believe that Medicaid reimbursement of correctional health care is likely to improve care coordination and overall health care post-release. To successfully implement Medicaid reimbursement, policymakers must realize that correctional health care is unlike care provided in the community and, therefore, regulations must account for the unique circumstances of providing treatment in these settings. In anticipation of this challenge, the Health and Reentry Project hosted a multistakeholder convening in March 2022 to discuss possible policy changes to Medicaid's inmate exclusion, their potential to improve public health and safety, and how to implement these changes successfully. Participants described the value of increasing access to OUD care, among other services, in jails and prisons, and emphasized the importance of developing stronger health care approaches for people who are currently or formerly incarcerated. As a result, jails and prisons will need guidance on how to implement quality standards and payment models to comply with Medicaid standards and ensure that reimbursement can be quickly operationalized.

Alexandra Duncan works on The Pew Charitable Trusts’ substance use prevention and treatment initiative.