Designated‑agency leaders tell House panel Medicaid rule changes risk closure of residential programs, displacement of vulnerable Vermonters

Melanie Gidney, executive director of the Clara Martin Center, told the House Committee on Health Care on April 16 that Vermont’s adult mental‑health residential programs are facing an unfolding crisis that could force closures and displace residents with nowhere to go.

Gidney, testifying for Vermont Care Partners, said the state’s shift in Medicaid funding from a long‑term habilitative model to a short‑term rehabilitative model (TPL 63) and an unresolved conflict over HUD‑funded lease arrangements have produced two intersecting problems: many current residents no longer meet the rehabilitative eligibility criteria that DMH is applying, and lease‑based properties built with HUD funding may be treated as permanent housing and therefore ineligible for Medicaid residential treatment reimbursement. "Vermont's adult mental health residential programs are at risk of closure, and the people living in them face displacement with nowhere to go," Gidney said.

The witnesses emphasized the population at stake: dozens of adults with lifelong, severe mental illness who rely on structured residential supports to remain safe and stable. Gidney said many residents are aging, medically complex and often ineligible for other systems such as Choices for Care or nursing…