Budget committee reviews plan to draw federal match for housing and reentry services, delays introduction

The Joint Budget Committee on an item in packet 19 heard staff explain a plan to use a Section 1115 federal waiver to draw Medicaid matching funds for health-related social needs — primarily housing — and for reentry services for people leaving state correctional facilities.

JBC staff member Mr. Kurtz told the committee the department submitted a comprehensive 1115 waiver and that two components are at issue for this bill: health-related social needs (HRSN), which the staffer said is centered on housing but can include nutrition and counseling, and reentry services for people leaving correctional facilities. Kurtz said the state already provides many of these services from the general fund and the waiver would allow the state to replace some general‑fund spending with federal match and then place leftover federal match proceeds into newly created cash funds for future expansions.

The proposal would create two cash funds — one for HRSN and one for reentry services — and use existing state appropriations (Kurtz used Corrections as an example) as state match. Kurtz estimated a first‑year projected impact of about $15,000,000 of savings, with some of the state match coming from Proposition 123 money and general fund. He said the waiver requires that savings be reinvested to expand and enhance the services.

Committee members pressed staff on several implementation details. Representative Sarah Mobley asked whether county jails were covered; Kurtz said the current draft covers state prisons only and that counties might be included in a later phase. Members asked whether medication‑assisted treatment (MAT) could begin before release and whether people would remain eligible after release; Kurtz replied that people in prison are not eligible for Medicaid while institutionalized, but once released many qualify by income and the waiver would allow an earlier start of MAT in the correctional setting to smooth transitions of care. The transcript does not specify whether the reentry medication supply is 30 or 60 days.

Members also questioned administrative costs and the department’s proposed staffing. Kurtz said estimated administrative positions include accounting and medical‑billing resources across departments, an HCPF program and planning coordinator, a workforce development position, a DOLA position for provider credentialing, and a pharmacy procurement FTE for Corrections; staff counted roughly 8 FTEs in the package and said administration would be paid from the cash fund savings. Several members asked whether those functions could instead be handled by the Department of Local Affairs (DOLA) because DOLA already works with housing providers; Kurtz said money must flow through Health Care Policy and Financing (HCPF) to access federal match but acknowledged the state could structure payments so HCPF passes funds to DOLA rather than paying providers directly.

A partial motion to introduce the bill was made and then withdrawn while members sought more information. Committee members agreed they had substantive questions about provider billing flows, the scope of included facilities, and the administrative footprint and asked staff and departments to resolve those issues later this week. The committee did not vote to introduce the bill at this meeting.

Implementation next steps the committee identified included clarifying whether county jails will be included in later phases, confirming the exact durations and eligibility for reentry medication and MAT, and resolving whether providers will bill HCPF directly or be reimbursed via DOLA.

Because the committee did not act formally, no appropriation or statutory change was adopted at this meeting.

Ending: Staff said they expect to resolve remaining questions later in the week and either the Budget Committee or another sponsor will run the bill this year; the committee recorded no formal vote on the HRSN/reentry item at this session.