Eight sites selected for first phase of Medicaid reentry demonstration

Minnesota is pursuing a new initiative that will enable people who are incarcerated to access behavioral health services through Medicaid in the months leading up to their release.

With federal approval, state Medicaid programs can cover certain behavioral health services and medical care for chronic health conditions for incarcerated people for up to 60 days before release. The initiative, developed by the federal Centers for Medicare & Medicaid Services in 2023 under Section 1115 of the Social Security Act, is called the 1115 Reentry Services Demonstration.

Primary goals are to reduce overdose deaths, improve public safety and help more people continue getting behavioral health services after release from incarceration. The Minnesota Department of Human Services is seeking federal approval to participate in this demonstration. Research shows that society benefits when people in correctional facilities receive the behavioral health services they need.

“Providing these services before release fills an important gap and can save lives,” said Temporary Human Services Commissioner John Connolly. “Addressing a person’s behavioral health needs before they leave incarceration can help them find stable housing, get a job and rebuild support networks upon reentering their communities – all of which strengthen public safety and lead to better long-term outcomes for communities.”

The first phase of Minnesota’s demonstration will involve three state prisons, four county jails and one Tribal detention center:

• Minnesota Correctional Facility in Faribault
• Minnesota Correctional Facility in Shakopee
• Minnesota Correctional Facility in Stillwater
• Red Lake Detention Center
• Hennepin County Jail
• Scott County Jail
• Stearns County Jail
• Wright County Jail

The Department of Human Services is also administering $2.5 million in grant funding to ensure that participating sites have the operational, clinical and technical capacity to deliver Medicaid-covered services. Grant funds will help establish workflows, train staff, enroll providers and enhance data exchange processes, supporting compliant service delivery and accurate Medicaid billing.

The Department of Human Services is working closely with the Minnesota Department of Corrections to implement and administer this new initiative and ensure that sites are prepared to deliver services.

“This initiative recognizes a simple reality: People are more likely to succeed after release when they have access to the care and support they need before they leave incarceration,” said Corrections Commissioner Paul Schnell. “Strengthening access to needed services during the community reintegration can reduce recidivism, improve public safety and help individuals return to their communities healthier, with more stability and better prepared for success.”

The agencies are collaborating on an implementation plan with robust partner and community engagement. Since December 2024, a reentry services working group has been focusing on the launch of this initiative and related policies for justice-involved individuals. In the coming months, the agencies will communicate opportunities to provide input on the implementation plan and overall project design. Throughout the process, the state will prioritize voices of people with lived experience with mental health issues and substance use disorders, and with the criminal justice system.

Pending federal approval, people incarcerated at the selected sites could begin receiving pre-release services in early 2028. Eligibility will be limited during the first phase of the initiative. However, Minnesota plans to expand the initiative statewide following a thorough evaluation.

While the demonstration covers the 60 days before a person’s release, the Minnesota Legislature and Gov. Tim Walz recently approved extending services for six months after release, helping ensure people released from incarceration stay stable during their transition back into the community.

Helping people reenter communities after incarceration has been a key priority during the Walz-Flanagan Administration. Since 2017, the departments of Human Services and Corrections have partnered on Bridging Benefits – a program that helps incarcerated people reenter the community with needed benefits and connections to services in place. Minnesota expanded the program statewide in 2022, and since then, it has helped approximately 851 people reenter their communities.

Eighteen states currently have Medicaid reentry demonstrations. On average, pre-release programs that address a person’s mental health or substance abuse problems may reduce the cost of crime and long-run incarceration costs by $1.47 to $5.27 per taxpayer dollar, according to the White House’s Council on Economic Affairs.

To learn more, visit Minnesota’s 1115 Reentry Demonstration webpage at mn.gov/dhs/reentry-waiver. To receive the latest news, sign up for 1115 Reentry Demonstration News and Updates.