Hudson County awards nearly $15 million correctional health contract to CFG; officials outline 62-bed community facility and Medicaid pathway

Hudson County commissioners included a resolution in their Aug. 12 caucus awarding a Fair and Open competitive contract to CFG Health Systems for medical and mental-health management at the Hudson County Correctional and Rehabilitation Center, with a Year 1 value of $14,965,955.

CFG representatives described changes to the company and a community placement model they said helps stabilize people with serious mental illness after release. "We have a 62-bed unit that's in the community that will be able to take dual diagnosis patients," said Dr. Hanset, CFG's medical director. He said the facility — identified in the discussion as "Silver Lakes" — is intended for discharge planning and short-term stabilization: "They can hold that patient on from one to three months as they do the stabilization, and then they do the community relations to then place the person back on Medicaid."

CFG CEO Brandon DeJulius introduced the company's reorganization and said the firm had invested in clinical infrastructure. "CFG Health has gone through a major reorganization," DeJulius said, adding the company recruited experienced correctional-health executives and prioritized clinical care, recruiting and operations.

Deputy County Administrator Frank Mazza framed the facility as part of a broader continuity-of-care approach for people in the county jail with mental-health and substance-use needs, saying Hudson County has worked to bridge the gap between in-jail programming and community placement. "Now that the jails have become de facto mental health institutions, we need a partner in the community that can accommodate these patients," Mazza said. He said some placements have allowed counties to reinstate or reactivate Medicaid coverage once people are moved into community treatment settings.

Commissioners raised budget and funding questions. Commissioner Albert Cifelli asked whether federal Medicaid revisions under recent federal legislation would affect county finances, saying he was "extremely worried about funding that comes into our resolutions" and asking whether the county was "guaranteed to get that $15 million." CFG and county officials replied that Medicaid cannot be used to pay for care while someone is incarcerated, and that Medicaid-related billing can become available when individuals are stabilized in community settings at a facility that can bill Medicaid. As Mazza summarized, "Medicaid is cut off when an individual is incarcerated" but community placements and reinstating benefits can offset some downstream costs once a person is outside custody.

The caucus discussion did not record a formal roll-call vote on the contract in the transcript but placed the resolution on the caucus agenda. The contract and the county's use of community stabilization beds were presented as steps to reduce repeat incarcerations among people with serious mental illness and to link discharge planning with Medicaid re-enrollment and community services.

Next steps: the county docketed the CFG contract as a resolution on the caucus agenda and commissioners requested additional details and follow-up memos on prior-year contract totals, the mechanics for Medicaid billing at community placements and the named facilities used for discharge and stabilization.