Connecticut Estimated to Receive Boost of Nearly $30 Million in Annual Medicaid Funding
(HARTFORD, CT) – Governor Ned Lamont today announced that his administration has received federal approval of an application that will provide heightened treatment of Connecticut residents struggling with substance use disorders, including first-time federal funding of residential care services and increased provider payment rates.
The federal Centers for Medicare & Medicaid Services has greenlighted Connecticut’s plan for increased services under a “Section 1115 demonstration waiver,” a key step that paves the way for matching funds in crucial areas not typically covered by Medicaid. The waiver covers all substance use disorders, including alcohol, cannabis, illicit drugs, and misuse of prescribed medications.
It was sought on behalf of the Lamont administration by the Connecticut Department of Social Services (DSS) with support from the Department of Mental Health and Addiction Services (DMHAS) and the Department of Children and Families (DCF).
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“Through this initiative, we estimate a boost of nearly $30 million in annual Medicaid funding to help our efforts in combatting substance use disorders, overdose fatalities from opioid misuse, overuse of hospital emergency departments, and in addressing related treatment needs,” Governor Lamont said. “Our goal is to strengthen the treatment system for the entire state and make sure we are doing everything possible to prevent further tragedies that have impacted so many of our families and communities.”
“The opioid epidemic has destroyed lives prior to the pandemic and since then rates of substance misuse and overdoses have only risen,” the members of Connecticut’s Congressional delegation said in a joint statement. “This new Medicaid funding will be critical to treating substance use disorders in the state and saving lives. We will continue to work in Congress to do everything we can to address this crisis.”
“Under this new arrangement, Connecticut will receive federal funding for the first time to support substance use treatment in residential care facilities,” DSS Commissioner Deidre S. Gifford said. “Specifically, the federal government will now help fund care of Medicaid beneficiaries who are primarily receiving treatment and withdrawal management services for substance use disorder while residing in psychiatric hospitals or other residential treatment facilities with greater than 16 beds – otherwise known as ‘institutions for mental diseases.’ These new funds will also be re-invested in higher provider rates and ensuring high-quality care consistent with the American Society of Addiction Medicine.”
“We are committed to providing a full continuum of treatment services to individuals living with substance use disorder,” DMHAS Commissioner Nancy Navarretta said. “Additional federal reimbursement will enhance our ability to serve Connecticut residents. Our existing services will be strengthened as we are able to make a larger investment in the agencies providing 24/7 support to individuals living in communities across the state. The implementation of this initiative will result in more robust treatment options, improve health outcomes, and support multiple pathways to recovery.”
“As we continue to strengthen and empower families leading to the safety of children, these additional resources will directly impact those most vulnerable in our communities,” DCF Commissioner Vannessa Dorantes said. “We look forward to collaborating with our sister state agencies and community partners as we continue to enhance the support network for the children and families we serve across Connecticut.”
In summary, this expanded coverage and reinvestment in the service system will help individuals struggling with substance use disorder by ensuring access to critical, high-quality treatment, including medications for addiction treatment; improving health outcomes for all individuals served; reducing overdose deaths; reducing preventable utilization of emergency departments; improving transitions between levels of care; and reducing readmissions to the same or higher levels of care, when preventable.
Due to longstanding federal policies, until now Connecticut was prohibited from receiving any federal matching funds for Medicaid/HUSKY Health members admitted for residential substance use treatment.
Governor Lamont thanked CMS Administrator Chiquita Brooks-LaSure for her agency’s favorable review of Connecticut’s application for the Substance Use Disorder Demonstration initiative, which is funded through March 2027.