House committee unanimously approves waiver bill to fund respite care for youth at risk of out-of-home placement

Representative Dempsey introduced House Bill 1238 as a narrow measure designed to close a gap identified by a study committee in placing children and adolescents after hospital or psychiatric residential treatment discharge. The bill would require the Department of Community Health to submit a Medicaid waiver request by Dec. 31, 2026, to allow Medicaid reimbursement for respite care and related services for people under age 21 at risk of out-of-home placement.

"This is truly a simple bill to fix a big problem," Representative Dempsey said, describing study findings that some youth face long waits—about six months, she said—for placement when an "abandonment" clause complicates discharge planning. Dempsey and committee members framed the measure as a tool both to help families keep young people at home and to reduce financial burdens on hospitals and residential treatment facilities.

Stuart Portman, executive director of the Medical Assistance Plans Division (Medicaid director), told the committee that some components of the proposed model can already be provided under the state Medicaid plan and that the Department will "work expeditiously" to submit a waiver. Portman said the Centers for Medicare and Medicaid Services has already approved certain state-plan elements and that the waiver would allow Medicaid to cover services that federal rules require be provided through a waiver, such as respite and other family supports. "We actually have approval already from CMS to do that," Portman said.

Portman gave an overview of the federal waiver process, saying reviews by CMS typically take several months and involve rounds of questions and responses, and that initial waivers are commonly authorized for five years with subsequent renewals every three to five years. He also estimated a one-time federal cost for developing the waiver and associated cost-neutrality analyses at about $500,000 and emphasized that waivers must demonstrate cost neutrality compared with residential placements.

Committee members asked whether the provider network could absorb new services if funding became available. Chairman Bonner and others pressed on capacity concerns; Portman and department staff said there are providers capable of delivering the services and that stakeholder engagement and provider education are part of implementation planning to expand capacity where needed.

Sarah Phillips, associate director for the Rosalynn Carter Mental Health and Caregiver Program at the Carter Center, testified in support of the bill. She told the committee that respite care is "preventative, stabilizing" and helps caregivers avoid burnout, reducing emergency visits and residential placements. Phillips offered the Carter Center's assistance with outreach so families would know the resource exists once the waiver is approved.

Members also asked about the scope of the waiver and whether changes to caregiving definitions should be added; Representative Dempsey said department-sponsored bills are typically kept "clean" unless the department requests additions. Discussion also addressed how families would be identified and enrolled; Portman said families would not need to submit separate applications because eligibility can be identified via claims data and handled on the back end.

After public testimony and discussion, the committee moved, seconded and approved the bill. Chairman Dempsey announced the measure "is passed unanimously." The Department of Community Health is to submit the waiver by Dec. 31, 2026, and implementation planning and stakeholder engagement are underway.

What’s next: the Department of Community Health will prepare and submit the waiver request and continue implementation work, including stakeholder outreach and provider engagement, to operationalize respite and related family supports if CMS approves the waiver.