Vermont officials outline rollout of Section 1115 Medicaid reentry waiver, aim for Jan. 1, 2026

State Medicaid officials outlined plans on Oct. 16 to implement a Section 1115 Medicaid "reentry services" waiver that allows federal funding for certain services delivered to sentenced people in Vermont correctional facilities before they are released.

"We applied for this waiver in 2022. We didn't actually get it until July first of this year," Ashley Berliner, director of Medicaid policy at the Vermont Agency of Human Services, told the Joint Legislative Justice Oversight Committee. Berliner said the state is aiming to begin full implementation on Jan. 1, 2026, and that the work requires eligibility‑system changes, claims system changes, provider outreach and technology to ensure inmates can be identified and their enrollment suspended rather than terminated while in custody.

The waiver permits Medicaid payment for a defined set of prerelease services up to 90 days before release, Berliner said. Those services include case management, medication‑assisted treatment (MAT), prerelease screening, peer support services and a supply of prescription medication at release. Berliner described the program as targeting the post‑adjudicated population in all six in‑state DOC facilities and estimated the eligible population at roughly 1,000 people a year, citing a point‑in‑time figure of 861 sentenced individuals and a release figure of about 572 over a recent six‑ to seven‑month period.

State and committee members pressed staff on details of eligibility and billing. Berliner said the state is working to ensure the Medicaid platform will "suspend rather than terminate individuals" who enter corrections, in keeping with federal expectations around the inmate exclusion. She added that the waiver provides a 90‑day carve‑out that enables claims to be made for prerelease services.

On financing, Berliner said the Department of Corrections currently pays its medical contractor, Wellpath, from general funds. Under the waiver, AHS/Medicaid will develop a per‑inmate‑per‑month (PIPM) payment that Medicaid pays to DOC for reentry services (excluding certain case management functions provided by the Vermont Chronic Care Initiative), and DOC will true up the payments after release with a three‑month lookback to validate that the release met the 90‑day prerelease window.

Committee members asked about medications and continuity of care. Berliner said Medicaid and DOC formularies are largely aligned except for a long‑acting injectable MAT that is currently cost‑prohibitive for in‑facility stocking; staff noted other states have used opioid‑settlement funds to cover that medication. Ben Dobrovsky of the Office of Legislative Council reviewed Act 159, enacted last session, which sets statutory reentry mandates including a minimum 28‑day supply of medication upon release when clinically appropriate and requirements to schedule intake appointments with community providers to support continuity of care.

Berliner emphasized the implementation timeline and systems work ahead, including IT changes to flag corrections populations in Medicaid systems and to establish payment methodology within the claims platform. "We're doing a lot of planning right now to make sure that we can hit that," she said, adding that the state will consider expansion to the pre‑adjudicated population after the initial phase is functioning.

The committee did not take a formal vote on the waiver implementation but signaled ongoing oversight; members requested return briefings as systems are built and flagged cost‑tracking and reinvestment requirements — Berliner said the waiver carries a reinvestment mandate that any general‑fund savings be reinvested in services for the corrections population.

Next steps: AHS and DOC will continue system development and return to the committee with progress updates as the state moves toward the January 2026 target.