Senate committee clears bill letting DCH seek 1915(c) waiver to serve high-need adults with severe mental illness

Senate Bill 428, an agency bill authorizing the Department of Community Health (DCH) to pursue a Section 1915(c) Medicaid waiver for adults with severe and persistent mental illness, passed the Senate Health and Human Services Committee unanimously after an amendment clarified eligibility language.

"This bill is an agency bill and it's to deal with the most complex homeless individuals who are also seriously mentally ill," Senator Kpatrick, the bill's author, told the committee. He said the proposed waiver would fund intensive case management, housing supports, clinical and behavioral services, employment assistance, transportation and respite or skilled nursing when needed for adults 21 and older who repeatedly rely on emergency rooms, incarceration or homelessness services.

DCH staff described the waiver authority and how the state would use it. "It is a a waiver authority in order to cover certain populations in a costneutral way," Stuart Portman, Medicaid director and executive director of the medical assistance plans division at DCH, told the panel, adding that recent federal changes in HR1 make pursuing this type of waiver more feasible.

Members questioned how the state would assure provider accountability and who would inspect sites. DCH said the department would be responsible for oversight and would work with licensed professionals, nurses and other providers to ensure services are delivered appropriately. On costs, DCH estimated a one-time $500,000 expense to develop the waiver application and emphasized that the waivers must be demonstrated to be cost neutral; ongoing monitoring would be used to confirm the program remains within estimates.

Committee members pressed DCH on how cost neutrality is calculated. DCH representatives said the waiver application requires model development that compiles utilization data (ER visits, hospitalizations, incarcerations) so the state can demonstrate per-individual and program-level cost neutrality at application and then monitor the program over time.

The committee also discussed eligibility criteria. Senators raised whether homelessness must be a required criterion or one of several qualifying factors. Legislative counsel Sarah said the bill authorizes the state to develop the waiver and that the specific eligibility parameters would be defined in the waiver application. To clarify intent, the committee adopted an amendment to change the bill language so that the listed factors would read as alternatives or combinations rather than a strict conjunctive requirement.

The amendment — to strike the word "and" and add "or any combination thereof" after the word "homelessness" — was offered and seconded, then approved by a show of hands. The committee then voted on the underlying bill as amended; the chair noted he did not vote and the committee approved the bill unanimously and reported it to Rules.

The bill's next step is consideration under the Senate Rules process; DCH said it will continue refining eligibility parameters, caps and the waiver application model to meet federal cost-neutrality requirements and to define the number of people who could initially be served. The committee closed with brief comments about other waiver types (Section 1115 and Section 1332) and adjourned, with a reminder about the Health and Human Services committee dinner on March 9.