Medicaid Eligibility Termination Plagues Former Inmates

When inmates with mental illness are released from jail without SSI, SSDI, or Medicaid benefits, they are more likely to end up in the emergency room, prison, or back in jail, according to Chris Koyanagi, policy director at the Bazelon Center for Mental Health Law.

To help break this insidious cycle, Koyanagi wrote the March 2001 report “For People With Serious Mental Illness: Finding the Key to Successful Transition from Jail to Community: An Explanation of Federal Medicaid and Disability Program Rules.” This report offers detailed information on SSI, SSDI, and Medicaid and suggests measures to ensure that eligible inmates with a psychiatric disorder receive health care or disability benefits upon their release.

A major section of the report helps readers negotiate complicated Medicaid rules and regulations.

“Federal Medicaid rules do not require the termination of inmates’ Medicaid eligibility,” Koyanagi told Psychiatric News. Those rules “only require that inmates’ Medicaid coverage be suspended, not terminated. Suspension means that the inmates stay on the Medicaid rolls. . .but the jail or prison can not receive any reimbursements,” said Koyanagi.

In practice, however, almost all states terminate inmates’ Medicaid, according to a 2000 survey of Medicaid administrators conducted by the Council of State Governments (CSG).

“Of the administrators from 49 states and four territories who responded, 46 wrote that they ‘terminate’ Medicaid when they learn a person has become an inmate. This means that the person is removed from the Medicaid rolls and has to complete a new application,” said Michael Thompson, director of the criminal justice programs for the CSG’s eastern regional conference, in an interview with Psychiatric News.

One typical scenario involves inmates who qualify for their Medicaid because they are eligible for SSI benefits. After incarceration for a full calendar month, their SSI is suspended. And when the state Medicaid office is notified of this suspension, it almost always terminates their Medicaid, as the CSG study indicated, said Koyanagi.

Often, however, “inmates’ Medicaid is terminated even when the inmate is incarcerated less than 30 days and has not been convicted,” according to Collie Brown, senior director of the National Mental Health Association’s Criminal Justice Programs, and Henry Steadman, Ph.D., president of Policy Research Associates, which works nationally to improve services for inmates with co-occurring mental health and substance abuse disorders.

Effects of Medicaid Termination

“When Medicaid is terminated for inmates whose Medicaid eligibility is not tied to SSI, they can’t get access to needed mental health services until the Medicaid agency finds them eligible under another program or they successfully reapply,” said Lee Carty, the Bazelon Center’s communications director.

“If ‘suspension’ status would result in the person remaining on the Medicaid rolls and is accompanied by a simple procedure to remove the suspension upon verification of release from jail, that would be advantageous because it often takes several weeks before a former inmate is restored to the Medicaid rolls,” said Mark Binkley, J.D., general counsel for the South Carolina Department of Mental Health, in an interview with Psychiatric News.

“If these agencies shared information on the Internet, so that data were transferred instantaneously, this would also help solve a lot of the problem,” added Binkley, noting that most Social Security and Medicaid offices share information by exchanging electronic tapes weekly or monthly.

Medicaid Redetermination

The Bazelon Center report also discussed redetermination of Medicaid eligibility. “State Medicaid offices ought to be redetermining Medicaid eligibility for anyone who entered jail on Medicaid,” said Koyanagi.

Regarding redetermination, former Health and Human Services Secretary Donna Shalala wrote in an April 6, 2000, letter to Congressman Charles Rangel that, “The state must ensure that the incarcerated individual is returned to the [Medicaid] rolls immediately upon release, unless the state has determined that the individual is not eligible for some other reason.”

“If this redetermination were done, most inmates entering with Medicaid would still be eligible when released, since their income in jail almost never increases,” said Koyanagi.

“But we know this redetermination is not being done because individuals with serious mental illness almost invariably leave jail with no Medicaid,” she said.

Begin Process Sooner

When asked why some states terminate rather than suspend Medicaid eligibility, Thomas Shenk, health insurance specialist in the Center for Medicaid and State Operations at the Center for Medicare and Medicaid Services (CMS) (formerly known as the Health Care Financing Administration) said, “Some states may not have a system in place for suspending eligibility. And still other states may terminate Medicaid to ensure that no Medicaid claims are filed by inmates.”

Regarding redetermination, “Generally, the redetermination process begins after inmates are released, and we don’t have the authority to make states begin this process sooner, while they are still in jail.” Shenk said. “CMS agrees with Bazelon that there needs to be a mechanism or procedure to ensure Medicaid-eligible inmates receive Medicaid upon release.

“CMS is well aware of this problem of inmates being released without their Medicaid eligibility being established or reestablished and is in the process of developing a letter to state Medicaid directors addressing this concern.”

SSI and SSDI

The Bazelon Center “does not take issue with [the Social Security Administration] for stopping payment of cash SSI or SSDI benefits when an individual is an inmate in a correctional facility. . . . We do, however, object to the fact that most of the time SSI or SSDI eligibility is not reinstated upon the inmate’s release,” said Koyanagi.

To remedy this situation, the report suggests that jail employees or employees from the local SSA, Medicaid office, or community mental health agency assist individuals in applying or reapplying for SSI, SSDI, and Medicaid while they are incarcerated. “And if in-person interviews are required, jail personnel could accompany inmates,” said Carty.

Stephen Ingley, executive director of the American Jail Association, said, “I believe jail personnel would support these initiatives if given the resources necessary to make such a program work, while maintaining a safe and secure operation.”

Koyanagi’s report for the Bazelon Center is available on the Web at www.bazelon.org/findingthekey.html▪