House approves amendments to S.36 changing Medicaid rules and lodging options for incapacitated people

The Vermont House on April 25 advanced S.36, a bill that (1) clarifies Medicaid coverage for high‑ and low‑intensity residential substance use disorder treatment, (2) directs the Agency of Human Services to review the Medicaid payment model for those services, and (3) repeals a statutory prohibition that had restricted use of Department of Corrections (DOC) facilities to lodge individuals incapacitated by alcohol or other substances.

The action matters because it changes how the state can respond when local public inebriate (sobering) beds are unavailable and directs a statewide review to better align payment with clinical need. Supporters described the bill as a set of pragmatic fixes to ensure Vermonters can access medically necessary residential care and to reduce strain on emergency departments when other options are lacking.

On behalf of the House Human Services Committee, Representative Peter Bishop (member from Colchester) told the chamber that S.36 “makes focused adjustments across three distinct areas of the agency’s work,” first clarifying that although an initial episode of care is authorized for 14 days, “the treatment coverage is not capped at 14 days. Instead, the full length of care deemed necessary by the medical provider must be covered by Medicaid.” He also said section 3 directs the Agency of Human Services to report on payment model alignment by Dec. 1, 2025.

The bill’s second component addresses individuals historically referenced in statute as “public inebriates.” Committee members and witnesses described too few community‑based sobering beds statewide — particularly in Chittenden County — and emergency departments and hospitals testifying before the committee said hospitals have been used as de facto holding locations, which strains staff and patient care. The committee report said stakeholders including the departments of corrections, mental health and health, law enforcement, nurses and public inebriate program operators had expressed that, while DOC facilities are not preferred, they must remain an option when no community bed exists.

Health‑care witnesses' warnings were quoted on the House floor. The committee read a statement attributed to the vice president of medical staff at Rutland Regional Medical Center: “Our hospitals are working hard to protect staff. Nonetheless, our staff and sometimes other patients continue to be struck, spit on, shoved, and verbally assaulted. Agitated and uncooperative intoxicated individuals with no medical needs are a danger to staff and prevent us from caring for your loved ones.” The committee also read an operator’s view that “by prohibiting inebriated individuals from being placed in correctional facilities, the likelihood of hospitalization increases.”

Representative Rachelson (member from Burlington) offered an amendment that would have replaced repeal with a two‑year sunset (ending July 1, 2027) and added various “guardrails” — for example, permitting lodging in a correctional facility only when a person had been charged with a crime or posed a safety risk, requiring that no approved detox or hospital within a 60‑mile radius could accept the person, and requiring prompt return of personal belongings and return to the place the person was encountered upon release. Rachelson said the changes were intended to preserve the policy principle that addiction is a health issue, not a criminal one, while recognizing current gaps in community capacity.

The House Human Services Committee reported unfavorably on Rachelson’s amendment after hearing testimony from medical staff and program operators who warned that restricting DOC as an option would increase hospital lodging. The House first voted to decline Rachelson’s section that would have created the sunset and then declined the remainder of her amendment. Following those votes, the House proposed to the Senate to amend S.36 as recommended by the committee on Human Services (as amended in committee) and ordered third reading.

What the bill will do next: with the House proposing the committee’s amendments to the Senate and third reading ordered in the House, the bill will proceed according to the legislative calendar and the Senate’s consideration of the House’s proposal of amendment.

Speakers on the record included Representative Peter Bishop (speaking for the House Human Services Committee), Representative Rachelson (member from Burlington, amendment sponsor), and members reading testimony from nurses, hospital officials and program operators. The committee listed multiple witnesses in its report, including the Medicaid director, the departments of Health and Mental Health, DOC officials, the Vermont Emergency Nurse Association and operators of regional public inebriate programs.

Clarifying details from the hearing and the committee report: the bill clarifies that medically necessary residential treatment is not capped at an initial 14‑day authorization; the Agency of Human Services must report on payment model alignment by Dec. 1, 2025; the DOC and Agency of Human Services must report on plans and efforts by Feb. 15, 2026; and committee amendments replace the term “inebriates” in statute with “persons who are incapacitated.”

Context and next steps: the bill’s changes are aimed at reducing reliance on emergency departments and ensuring Medicaid covers the medically necessary length of residential treatment. The legislative committees asked for multiple agency reports to inform implementation and further legislative oversight.