Recidivism is still a major challenge in the United States, with nearly 70% of incarcerated individuals reoffending after release. To help prepare these men and women for integration back into society, the CMS (Centers for Medicare and Medicaid Services) approved Reentry Section 1115 in 18 states.
This type of Medicaid waiver allows individuals to receive coverage for services up to 90 days prior to release. The services rendered usually cover substance use disorder, mental health, and chronic conditions to aid in community reentry.
However, the administrative hurdle to comply with requirements for Medicaid on reentry can be a major challenge for local and government-funded nonprofits, agencies, reentry programs, and other organizations. This article will break down the challenges that arise and modern technical solutions that can bridge the gap.
The Moment of Release: Where Medicaid and Reentry Programs Break Down
While individuals in many states can now receive care while incarcerated, the problem starts when they are released. Their Medicaid may be automatically terminated, even if they still qualify. 58% of people incarcerated at state prisons meet clinical criteria for a substance use disorder.
However, Medicaid enrollment can take weeks. After that, people have to find a provider. That gap in coverage can last long enough to negatively affect people through a lapse in prescription drug coverage and substance abuse treatment.
Administrative Handoffs
Part of the problem with Medicaid is the administrative handoff between different organizations. Corrections usually handle the Reentry Section 1115 waivers, yet case workers at nonprofit reentry programs manage Medicaid upon release. Unless these two institutions have a way to share documentation, people can fall through the cracks.
Lack of Family and Personal Resources
Last, but certainly not least, many people exiting prison and their families may not have the resources to follow through on Medicaid. Due to high poverty, unstable housing, and behavioral health needs, they may not have the bandwidth for the high volume of Medicaid applications and paperwork.
Why Reentry Programs Provide Medicaid-Eligible Services—but Never Get Paid
Medicaid on reentry can feel like an obstacle course, trying to provide services to care for your clients while navigating administrative challenges. Many programs struggle with the following in Medicaid billing for reentry services:
- Rendering services while someone is legally incarcerated: In this scenario, federal inmate exclusion blocks Medicaid payment, even if the service looks like a typical covered benefit.
- Absence of Medicaid infrastructure: Reentry programs rely on grant money instead to pay for services that Medicare covers.
- No active Medicaid at time of service: Medicaid is often terminated during incarceration. By the time post‑release services are provided, there's no active coverage to bill, and the cost falls into a gap.
- Improper billing workflows: Clinical providers may not have EHRs or billing systems configured to capture correct diagnosis codes, procedure codes, and modifiers tied to reentry services, so services go undocumented or unbilled
- Inconsistent documentation: Incomplete assessments, care plans, and other encounters may not satisfy Medicaid's requirements, so claims get denied.
- Miscommunication: Reentry staff may assume the managed care organization (MCO), jail health vendor, or community clinic is billing, so no one submits claims.
These issues make it difficult for reentry programs to collect all of the reimbursements that they could, leaving them to rely on grant, private, or other federal funding, when they could be serving more clients through Medicaid.
Medicaid on Reentry Is a Policy Win—but an Operational Challenge
Medicaid on reentry is a milestone to celebrate. It helps individuals during an incredibly high-risk time. In the two weeks after an inmate's release from prison, they are thirteen times more likely to die than anyone else.
For example, a man from Indiana shared his story with The Marshall Project. He was convicted of child murder during a psychotic episode, then served 25 years in prison. During that time, he received antipsychotic drugs. But once he was released, he had to scramble to fill out the paperwork from scratch, risking a lapse in his life-saving medication.
Now with the Reentry Section 1115, someone like him could receive help from a caseworker and enroll in Medicaid before he leaves prison, ensuring that his supply of antipsychotic medication never runs out.
While this sounds good on paper, in practice, there are several bureaucratic hurdles to overcome, including:
- High-level reporting: States are required to submit a monitoring protocol, quarterly and annual reports, a mid-point assessment report, an evaluation design, and interim/summative evaluation reports.
- Cross-agency coordination: The states that have been most successful have created regular advisory groups and stakeholder workgroups to guide implementation.
- Workforce constraints: Delivering prerelease case management, MAT, and assessments requires expanding correctional health teams and partnering with community providers (difficult in tight labor markets).
During any major policy overhaul, half of the challenge is building new administrative workflows to tackle the work effectively.
The Hidden Cost of Disconnected Case Management Systems
These new policies are even harder when systems do not communicate with one another. A disconnected case management system in a reentry program operates in isolation from the other systems and partners involved in a person's transition. Information, workflows, and accountability break down across the "handoff" from custody to the community.
As an example, here is what that would look like for a county jail reentry program using its own stand‑alone database or spreadsheet:
- Intake and assessments: Reentry staff complete assessments and document services only in their internal system, which is not linked to the jail's management system, community providers' EHRs, or Medicaid/health plan systems.
- Referrals at release: Staff print a paper reentry plan and give the client a list of appointments and community resources, but there is no electronic referral and no confirmation that the community provider received the information.
- No shared care plan: Community treatment providers, probation/parole officers, and Medicaid care managers all maintain separate records, so they re‑assess from scratch and might miss important info.
- Reporting and funding issues: Because the reentry database is isolated, it's hard to prove program impact, meet grant reporting requirements, or generate the data needed for Medicaid or other payers, so reimbursable services go unbilled.
These issues lead to common problems such as duplicate data entry and manual tracking, which 85% of workers say lead to high rates of staff burnout.
The Solution: Integrating Reentry and Medicaid Workflows (And What This Looks Like in Practice)
The solution that state and local government agencies, departments of corrections, and directors and administrators need for Medicaid on reentry is a case management program that brings the two workflows together. Treat your case management platform as the shared "spine" that orchestrates eligibility, prerelease services, and post‑release follow‑up.
Integrated reentry and Medicaid systems look like this.
1. Start with a shared person record and intake
Unify intake and participant records through a single digital place that follows the person from intake in custody through post‑release. There can be fields for:
- Incarceration status
- Projected/actual release date
- Medicaid ID and plan
- Critical contacts, including the facility, managed care organization, and case manager.
Make that record available, with the proper security safeguards, to correctional reentry staff, case workers, and community providers. That way, everyone works from the same source of truth.
2. Embed Medicaid eligibility and enrollment steps
Build prompts and workflows for intake, and then again 60–90 days before projected release. Case managers can verify coverage, initiate applications, or trigger suspension and reenrollment tasks directly from the case management system.
Using a reentry program-specific software will simplify this for you with status fields and alerts unique to your services. This helps staff know when it is safe to schedule pre-release covered services or billable encounters, and then when to bill for those as well. Service tracking is tied directly to billing, so no work goes unpaid.
3. Build warm‑handoff workflows
Use the case management system to trigger automatic tasks when a release date is set or updated. The workflow would look something like this:
- Notify the care manager
- Send a referral to the community clinic/SUD program
- Schedule a first post‑release appointment
- Assign a community lead care manager
By documenting these handoff steps, organizations can ensure every client receives the care they need to thrive post-release.
4. Track outcomes efficiently through analytics
Case managers, funders, and other critical stakeholders want to understand which services actually help clients thrive the most in reentry programs (and which ones are the most cost-effective). An analytics program can look at Medicaid and service data simultaneously, helping improve decision-making and stay compliant for audits.
Analytics can help you track the outcomes that matter most to states, agencies, and funders, including:
- Faster Medicaid enrollment and use post-release
- Reduced staff burnout
- Increased reimbursement capture
- Audit-ready documentation
- Maintain Medicaid compliance reporting at all times
What State Agencies and Reentry Programs Should Demand From Technology
When searching for the right programs, don't settle for less. Technology should be tailored specifically for the challenges in reentry programs, particularly with Medicaid. As more states adopt Reentry Section 1115, there will be a higher demand for integration.
Shop for platforms with:
- Reentry-specific workflows that reduce manual data entry
- Medicaid billing integration that allows you to track service delivery and billing in one place
- Configurable compliance reporting that helps you maintain audit-readiness at a moment's notice
- Scalable government-ready solutions that help your team build out more services as pre-release Medicaid services become more readily available in your area.
Case management software for government and nonprofits like PlanStreet was built just for this purpose, to simplify every administrative piece of your workday in one convenient location.
Continuity Is the Missing Link in Medicaid on Reentry
For a successful reentry into society, former inmates need guidance walking through complex systems like Medicaid. Reentry program management software bridges the gap, helping corrections departments, public health organizations, and reentry programs ensure no client gets left behind.