Committee reviews bill to require Medicaid coverage for rehabilitative residential mental health care

The Assembly Health and Human Services Committee heard Assembly Bill 514 on April 4, a proposal to require Medicaid coverage for rehabilitative residential mental health care for people with serious mental illness, Assemblymember Jovan Jackson told the committee.

The bill, introduced as a joint committee measure, would require the Department of Health and Human Services and the State Board of Health to develop licensing and reimbursement pathways so Medicaid can pay for a community-based, medically monitored rehabilitative level of care in licensed residential settings. Proponents said the model is intended to reduce hospitalizations and incarceration by providing treatment in community settings rather than in inpatient or correctional facilities.

"This bill ensures that that treatment is provided at home, and it also has the potential to reduce hospitalization and incarceration," Assemblymember Jovan Jackson said. Jackson told the committee the proposed amendment aligns the bill with existing Medicaid residential substance use disorder benefits so the state can seek federal approval.

Anne Jensen, innovation officer at Nevada Medicaid, said the amendment was written so the model could be submitted under Title XIX (the Medicaid rehabilitation option) and be eligible for reimbursement through the state plan. "This request we believe would fall under the rehabilitation option of our state plan," Jensen said. She added that the department believes the change would require a new service model and that "there's no one currently delivering this particular array of services" in Nevada under Medicaid.

Under the amendment discussed at the hearing, the Division of Public and Behavioral Health within DHHS would develop a model that meets federal regulations; the State Board of Health would adopt regulations, with distinct provider requirements for adults and youth. The bill sponsor and Medicaid staff said the amendment was intended to make federal approval more feasible by mirroring an existing rehabilitative benefit for residential substance use disorder services.

Supporters who testified included Sabrina Schnur of the National Alliance on Mental Illness (NAMI) Nevada, who said community-based living environments can stabilize people with mental illness, and Carissa Pierce of the Children’s Advocacy Alliance, who testified remotely in support. No one spoke in opposition at the hearing.

The committee uploaded and reviewed an amendment during the hearing. Committee members asked Medicaid staff to follow up with data about how many facilities currently provide this model and to clarify implementation details; Medicaid staff responded that such a program would be a new service model and offered to provide follow-up data.

The committee held the hearing but did not take a formal vote during the April 4 session.