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Building and Transforming Coverage, Services and Supports for a Healthier Virginia Approval Period: August 1, 2026 through December 31, 2031 Page 3 of 51

Additional attachments have been included to provide supplementary information and guidance for specific STCs.

Attachment A: Evaluation Design (Reserved) Attachment B: SUD Implementation Plan (Reserved) Attachment C: SMI/SED Implementation Plan (Reserved)

II. PROGRAM DESCRIPTION AND OBJECTIVES

Virginia’s BTCSSHV section 1115 demonstration provides authority for substance use disorder (SUD) treatment services to individuals who are short term residents in residential treatment facilities that meet the definition of an Institution for Mental Diseases (IMD); and extend Medicaid eligibility for former foster care youth (FFCY) under age 26 who aged out of foster care in another state or tribe and currently reside in Virginia.

In July 2020, CMS approved an amendment to the demonstration for the High Needs Support component to provide certain otherwise allowable 1915(i) state plan amendment (SPA) services, including: housing and employment supports Home and Community Based Services (HCBS) for Medicaid beneficiaries age 18 or older who were eligible under the Medicaid state plan and enrolled in the managed care delivery system and for those who were eligible under the out-of- state FFCY component of the demonstration age 18 up to 26 and enrolled in the managed care delivery system, and who met specific needs based criteria and risk factors.

On July 31, 2026, CMS approved a five-year renewal of the demonstration to allow Virginia to continue the existing demonstration authorities, which provide authority for SUD treatment services to individuals who are short-term residents in residential treatment facilities that meet the definition of an institution for mental diseases in an IMD and extend eligibility for full Medicaid state plan benefits to individuals who qualify as “out-of-state FFCY”, meaning individuals who are under age 26 and who turned age 18 on or before December 31, 2022, who aged out of foster care under the responsibility of another state or tribe, were enrolled in Medicaid while in foster care, currently reside in Virginia. The renewal will also remove the High Needs Support component of the demonstration because the state did not implement these services.

Lastly, CMS approved an amendment to add the SMI/SED demonstration opportunity to allow the state to receive federal financial participation (FFP) for services furnished to Medicaid beneficiaries during short term stays for acute care in psychiatric hospitals or residential treatment facilities that qualify as IMDs. The state will maintain and enhance access to mental health services, opioid use disorder (OUD) and other substance use disorder (SUD) services and continue delivery system improvements for these services to provide more coordinated and comprehensive treatment of Medicaid beneficiaries with SUD, serious mental illness (SMI), or serious emotional disturbance (SED). This demonstration will provide the state with authority to provide high-quality, clinically appropriate treatment to beneficiaries with SUD, SMI, or SED while they are short-term residents in residential and inpatient treatment settings that qualify as