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of circumstances under which a state’s baseline may be adjusted based on actual expenditure data to accommodate circumstances that are either out of the state’s control (for example, if expensive new drugs that the state is required to cover enter the market); and/or the effect is not a condition or consequence of the demonstration (for example, unexpected costs due to a public health emergency); and/or the new expenditure (while not a new demonstration-covered service or population that would require the state to propose an amendment to the demonstration) is likely to further strengthen access to care (for example, a legislated increase in provider rates). CMS also explains in the STCs what data and other information the state should submit to support a potentially approvable request for an adjustment.

Monitoring and Evaluation

Consistent with the demonstration STCs, the state submitted the Interim Evaluation Report for the prior demonstration approval period with the renewal application.7 The report evaluated demonstration performance from January 2020 through December 20228 but also included data from the initial demonstration approval period (January 2015 through December 2019) to provide context for demonstration performance in the subsequent approval period against the backdrop of events like the COVID-19 Public Health Emergency and Medicaid expansion. Findings in this report are in support of several demonstration goals and corresponding hypotheses, particularly those associated with increases in access to and utilization of SUD services. For example, the percentage of members with opioid use disorders who received medication for opioid use disorder treatment increased from 43 percent in 2016 to 78 percent in 2022. Additionally, the number of Medicaid members using any addiction and recovery treatment service (ARTS) per 100,000 members increased from 864 in 2017 to 2,911 in 2022. The Interim Evaluation Report also identified opportunities for improvement, for example, in SUD related emergency department visits and inpatient admissions. However, monitoring data through the end of 2024 showed steady decreases in SUD related emergency department visits relative to 2022. Monitoring data from 2023 and 2024 also suggests continued trends of increased access to and utilization of SUD services. For the FFCY policy in the demonstration, the demonstration findings suggest progress toward the demonstration goal that beneficiaries are able to maintain Medicaid coverage and utilize services.

With this renewal of the demonstration, which newly authorizes the SMI program as well, the state is required to continue conducting systematic monitoring and evaluation of the demonstration, consistent with the requirements in the STCs and applicable CMS guidance. In collaboration with CMS, the state must undertake demonstration monitoring, including reporting of relevant metrics data and narrative details describing progress with implementation of all components of the demonstration. The state must conduct an independent mid-point assessment of the SUD and SMI programs, which will help identify any necessary mitigation strategies to ensure ongoing progress toward the SUD and SMI program milestones and goals. Additionally, the state is required to conduct an evaluation of the demonstration to support a comprehensive assessment of whether the demonstration components are effective in producing the desired

7 The Interim Evaluation Report is available on Medicaid.gov: https://www.medicaid.gov/medicaid/section-1115- demonstrations/downloads/va-gov-access-plan-gap-sud-interim-evltn-rpt-06122025.pdf. 8 The draft Interim Evaluation Report was first submitted to CMS on January 23, 2024, and due to the state’s claims lag and the necessary time to conduct the evaluation, included data through the end of 2022.