New CMS guidelines for state health officials means 96,000 ex-prisoners currently living in halfway houses can receive Medicaid services.

While inmates currently held in correctional institutions can’t receive Medicaid-covered services, CMS drew a distinction between those who can come and go freely and those who can’t. In the case of halfway houses, the guidance clarifies that if an individuals are allowed to leave the facility for work or other reasons and can seek healthcare treatments like other Medicaid recipients, they’re not considered to be incarcerated.

“It is important to understand the critical role access to healthcare plays in successful returns to the community for so many Americans trying to change their lives,” said Richard Frank, HHS Assistant Secretary for Planning and Evaluation, in a statement. “Today’s actions will immediately begin to give as many as 96,000 of America’s most vulnerable citizens access to needed healthcare through Medicaid, including mental health and substance use disorder treatment, reducing the risk they will be re-incarcerated or hurt.”

Most of the guidance was a clarification to states on Medicaid’s definition of incarceration. For the program’s purposes, enrollees who are on probation, on parole, under home confinement or on release awaiting trial, are all eligible for services.

An exception is those living in federal Residential Re-entry Centers. Their healthcare services are the responsibility of the Department of Justice and Bureau of Prisons.

HHS said many former prisoners have been uninsured, and have much higher rates of diabetes, high blood pressure and other chronic conditions, so clarifying their eligibility for services could “play a key role in improving the health of these individuals.”

To assist in the process, the CMS guidance encourages state Medicaid agencies to work with correctional institutions to help inmates apply for Medicaid when incarcerated so services are available once they’ve been released.

“Once enrolled, states may employ various approaches to suspend eligibility, such as implementing a claims processing edit, instead of terminating the Medicaid eligibility of an incarcerated individual,” the CMS guidance said.

The guidance also mentioned that states may consider required their managed-care entities to work with correctional centers to ensure continuity of care for released inmates.