Appropriations advances S.36 to align Medicaid payment with clinically prescribed residential substance‑use episodes and orders multiple reports

The House Appropriations Committee voted 11–0 on April 22 to move S.36, a bill that would direct Medicaid reimbursement for medically necessary residential substance‑use disorder treatment episodes and add multiple reporting and presentation requirements to the legislative committees overseeing health and human services.

Katie McQuinn of the Office of Legislative Counsel told the committee that the bill’s first two sections are nearly identical: one covers medically monitored high‑intensity residential treatment for substance use disorder with co‑occurring mental health conditions and the second covers clinically managed low‑intensity residential treatment. Both sections would require that Medicaid provide coverage for the entire length of stay prescribed by a healthcare professional employed by a residential treatment program that participates in Vermont’s Medicaid program.

McQuinn said the bill contemplates episodic reimbursement — historically averaged at about 14 days — but that an episode could be shorter or longer depending on clinical need. The bill language makes the treating, licensed healthcare professional at the residential program the decisionmaker for the length of an episode, subject to medical‑necessity standards.

Section 3 of the proposal requires the Agency of Human Services (AHS) to conduct a review of Medicaid’s payment model for residential substance‑use disorder treatment with special consideration of actual costs, length of stay, co‑occurring needs and post‑residential transition services; McQuinn said that review must be delivered to the policy committees on or before Dec. 1 of the year the committee discussed.

Sections 4–6 address public‑inebriate policy. McQuinn explained that current statute has language that, once effective, would prohibit holding incapacitated individuals in correctional facilities; that language has repeatedly had its effective date delayed and is therefore not yet in force. The Human Services amendment asks Departments of Health and Mental Health to prioritize expansion of community public‑inebriate services in Chittenden County and requires a presentation by Feb. 2026 describing those expansion efforts. The Department of Corrections was also instructed to present how to reinstate pre‑COVID practices of connecting people discharged from correctional facilities to community substance‑use providers.

Section 7 asks for a written report on Human Services Board proceedings. McQuinn said the committee wants recommendations on training for agency attorneys that balance zealous representation with trauma‑informed treatment of appellants, consistent data collection across agencies, accessibility improvements for appellants (including media/graphics), and ways for appellants to present personal narratives without jeopardizing legal outcomes. The committee asked for AHS and the Human Services Board to collaborate with the Attorney General and community partners and to include people with lived experience.

Committee members noted that no fiscal note was prepared for the committee because, according to a staff text relayed during the meeting, the addition of medical‑necessity language on the Senate side changed how a fiscal note was determined; members said a more thorough fiscal analysis may be available after the AHS review. Several members expressed concern that Medicaid and prolonged residential care can carry large costs and said the committee expects the AHS review and the Dec. 1 submission to reveal any budgetary implications.

The committee moved the bill as amended by the Senate and further amended by the House Human Services Committee. The clerk called roll; the committee vote was recorded as 11 yeas, 0 nays. The roll call read: Representative Bloomy — Yes; Representative Dickinson — Yes; Representative Harrison — Yes; Representative Kacenska — Yes; Pamela Roche — Yes; Representative Lewicki — Yes; Representative Magro — Yes; Representative Squirel — Yes; Representative Steven — Yes; Representative Yacono — Yes; Representative Shai — Yes.

Ending: Committee members directed staff to await AHS’s review and reports required in the bill; they noted fiscal details may follow and moved S.36 forward to the next stage of consideration.