Financing Connectivity

One of the most significant hurdles to financing connectivity is a federal policy known as the “inmate exception.” This policy has shaped the approach that JOCHS is developing to enhance services for youth brought to detention.

In 1997, the Health Care Financing Administration – now known as the Centers for Medicare & Medicaid Services (CMS) – issued a letter addressing Medicaid coverage for inmates in public institutions stating that juveniles in detention essentially are considered the same as adult inmates in maximum security prisons in regard to federal reimbursement for health care services. The 1997 CMS letter is widely interpreted to mean that states and counties may not receive federal reimbursement from Medicaid or the State Child Health Insurance Program (SCHIP) for care provided to adult and juvenile “inmates,” with the consequence that states and counties bear the full cost of providing this care.

The inmate exception does not affect an offender’s eligibility for Medicaid/SCHIP; it only affects whether Federal Financial Participation (FFP) is available. Research shows that, nationwide, approximately 70 percent of youth in detention are eligible for Medicaid. Given the tremendous need for physical and mental health services among youth brought to detention centers, FFP for eligible youth would go a long way toward providing essential rehabilitative services.

JOCHS is working with jurisdictions to maximize FFP within the context of inmate exception. We also support the dissemination of news about alternative approaches to the interpretation of the 1997 CMS letter, such as the story of Bernalillo County, New Mexico.

Impact on Youth in Detention

Research shows that youth brought to detention are at very high-risk for both physical and mental health problems. The overwhelming majority of these youth are eligible for either Medicaid or SCHIP. Yet because of the inmate exception, juvenile detention facilities cannot bill state and federal governments for health care services provided to these young people who truly need these services. Although juvenile detention facilities must meet minimum standards of health care for youth in detention, many of these young people need care that exceeds minimum standards. In addition, to maintain true rehabilitation, they need care that continues after they are released from detention and return to their communities.

Some states remove or suspend juvenile offenders from Medicaid rolls when they are admitted to a detention facility. These young people must apply to be reinstated after release - a process that can take up to 90 days – and many juveniles do not reapply at all. Instead, they continue to live without health care coverage and forfeit needed treatment, unless and until they go to an emergency room or get rearrested.

Thus, the inmate exception has a significant impact on the medical and mental health resources available to serve young offenders. Some jurisdictions are reshaping service delivery within the parameters of the inmate exception to maximize Medicaid reimbursement for services to youth offenders in and outside detention. Others, such as Bernalillo County, are working with state governments to reinterpret the CMS regulations in unique ways.

Challenging the Inmate Exception

A recent letter written by staff attorneys at the Youth Law Center - a public interest law firm that works to protect children in the nation’s foster care and juvenile justice systems – presented their response to the 1997 Health Care Financing Administration letter regarding Clarification of Medicaid Coverage Policy for Inmates of a Public Institution with respect to its application of 42CFR § 435.1010 to juveniles. The YLC attorneys expressed concern “that the [CMS} letter reflects an inaccurate understanding of the juvenile justice system and the legal status of minors” and, as a result, “… creates confusion when States attempt to reconcile the letter with the federal regulation and can lead to denial of covered services for Medicaid-eligible children.” The YLC attorneys maintain that the 1997 letter from CMS confounds the juvenile and adult criminal justice systems, and the legal status of youth and adults. It concludes with the statement that “[t]he Centers for Medicare and Medicaid Services (CMS) could clear up the confusion created by the 1997 letter by issuing clarifying guidance that is consistent with the operation of the juvenile justice system and the legal status of the youth the system serves.”