CMS Approves Maine Waiver to Start Medicaid Coverage Before Release

Maine's health department announced Wednesday that the Centers for Medicare and Medicaid Services approved the state's Whole Person Care Waiver, clearing MaineCare to pay for reentry services up to 60 days before someone leaves jail or prison. The approval also opens a new pathway for reimbursing traditional Wabanaki healing services and extends coverage for short-term inpatient psychiatric care — a package state officials describe as an expansion of where Medicaid can follow a person rather than a change in who qualifies.

CMS signed off on the demonstration on September 25, according to the federal approval document, and Maine DHHS published the details October 1. The state had requested 90 days of pre-release coverage; federal reviewers determined that up to 60 days was appropriate.

What was actually approved

The waiver has four main pieces, two carried over and two new.

Maine keeps authority to bill Medicaid for residential substance use disorder treatment in facilities with more than 16 beds — the so-called IMD exclusion carve-out that most states now hold — along with services that support parents in recovery, including attachment-based parenting programs and home-based skills development for people working toward family reunification.

Newly approved is the pre-release benefit. Starting with case management, reentry planning and medication for opioid use disorder, MaineCare will cover a defined set of services before release. Additional services phased in as facilities build capacity include adult clinical consultations, diagnosis and treatment of priority conditions such as HIV and hepatitis C, and family planning.

The other new pieces are traditional healing services delivered through Indian Health Service and Tribal health organizations, and short-term inpatient treatment for adults ages 21 to 64 with serious mental illness in selected facilities that meet the federal institution-for-mental-disease definition. Covered psychiatric stays may run up to 60 days and are meant to stabilize patients before returning them to community-based care.

Why the two months before release matter

About 30,600 people leave Maine's prisons and county jails each year, and roughly 70 percent are eligible for MaineCare, according to DHHS. The period immediately after release carries the sharpest overdose risk of any point in the correctional cycle — research cited repeatedly in the waiver debate found that people leaving incarceration face sharply elevated death rates in the first two weeks, with overdose the leading cause.

That is the gap the pre-release window is designed to close. By starting coverage before release, the state aims to keep prescriptions filled, hand off to community providers while the person is still in custody, and cut avoidable emergency department visits.

Maine's county jails have been paying for much of this care themselves. A July analysis by The Maine Monitor found the state's 15 county jails spent an estimated $12.6 million treating addiction and mental illness in custody last year, leaning on grants and opioid settlement dollars that administrators say will run out. The waiver gives those facilities a billing path, though not immediately: the Maine Monitor reported that correctional facilities are expected to start billing MaineCare by July 1, 2028.

The approval is also a partial answer to a national stall. As the blog reported in July, at least three states had paused or withdrawn pre-release plans after federal budget and eligibility changes, and only four of the 19 states holding approval had actually switched on services.

A phased timeline running into 2028

CMS approval is a milestone, not a switch. Maine's own implementation schedule is long: residential SUD treatment authority is already effective and now renewed; traditional healing services are slated for October 1, 2027; phased pre-release services across jails and prisons begin July 1, 2028; and the serious mental illness inpatient component starts the same day.

DHHS said the phased, locally tailored approach grew out of three years of site visits to jail and prison facilities in every county, and that the Maine Sheriffs' Association and the Department of Corrections were closely involved in shaping the waiver. LD 1204, passed in 2023, required the state to apply for the reentry waiver by April 2025.

What CMS is still reviewing

Three proposals in Maine's original application remain undecided: Food is Medicine services such as medically tailored meals and produce prescriptions; recuperative care for people experiencing homelessness recovering from illness or hospitalization; and contingency management, an incentive-based treatment approach with growing evidence behind it for stimulant use disorder.

For now, the practical guidance from the state is that members do not need to act. Most of the new services require rulemaking before they open, and DHHS said it will publish eligibility details and timelines as each component is stood up. The people most likely to feel the change first are those leaving custody in 2028 — with treatment connection that, until now, generally began only after the gate closed behind them.

The waiver also carries a mental health thread that runs through the addiction system: a majority of people in co-occurring treatment for mental illness and substance use cycle through jails at some point, and the state's bet is that starting care a few weeks early keeps more of them out of the revolving door.