The bill S.36 introduces new provisions for Medicaid coverage of residential treatment services for individuals with substance use disorders and co-occurring mental health conditions in Vermont. It establishes two new sections under 33 V.S.A.: Section 1901n for high-intensity residential treatment and Section 1901o for low-intensity residential treatment. Both sections mandate that the Agency of Human Services provide coverage for medically necessary treatment episodes prescribed by qualified healthcare professionals, ensuring that the coverage lasts for the entire length of stay as determined by the professional, in accordance with best practices in the substance use continuum of care.

Additionally, the bill requires the Agency of Human Services to conduct a review of the Medicaid payment model for these residential treatment services, focusing on the actual costs associated with treatment, length of stay, and the needs of individuals post-treatment. The findings and recommendations from this review are to be submitted to relevant legislative committees by December 1, 2025. The bill also repeals certain provisions from previous legislation that restricted the incarceration of public inebriates and amends the effective date of related sections to align with the new provisions, with the entire act set to take effect on July 1, 2025.