Senate committee reviews bill to extend Medicaid coverage for long-term residential treatment for people with co-occurring disorders

The Senate Health and Welfare Committee on Feb. 6 reviewed S.36, a bill that would require the Agency of Human Services (AHS) to provide Medicaid coverage for medically necessary long-term residential treatment for beneficiaries with co-occurring substance use and mental-health disorders, with minimum stays of 30 days when medication for opioid use disorder (MOUD) can address the substance use disorder and 60 days when MOUD cannot successfully address it. The bill’s effective date is listed as July 1, 2025.

The bill matters because committee members said current payment and placement practices can create a “revolving door” in which patients leave treatment too soon and are readmitted soon after. Committee discussion focused on how Vermont’s Medicaid payment model — which AHS described as an episodic or bundled rate modeled on an average 14-day stay — affects facilities’ incentives and whether the episodic rate reflects clinical best practice.

“Katie McGlenn, Office of Legislative Counsel, said the bill adds a new section to Title 33, directing the agency to provide coverage for medically necessary long-term residential treatment to Medicaid beneficiaries with…