Substance Use Disorder Demonstration

Medicaid & Long-Term Care

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Public Notice Regarding Substance Use Disorder Demonstration Amendment

On July 18, 2025, the Nebraska Department of Health and Human Services (DHHS) posted a public notice of its intent to submit an amendment application to CMS under Section 1115 of the Social Security Act. DHHS is seeking approval from CMS for a five-year amendment to the Nebraska 1115 SUD demonstration. Visit the Medicaid Public Notices webpage to view the full public notice.

The public comment period will be from July 18, 2025, to August 18, 2025. Comments pertaining to the public notice may be submitted to the Department of Health and Human Services Nebraska Medicaid, 301 Centennial Mall South, P.O. Box 95026, Lincoln, Nebraska 68509-5026. Comments may also be faxed 402-471-9092 or e-mailed to dhhs.demonstrationwaivers@nebraska.gov.

Section 1115 SUD Demonstration Waiver Amendment

The federal Centers for Medicare and Medicaid Services (CMS) approved Nebraska's five-year extension request on June 25, 2025, extending the Nebraska Substance Use Disorder (SUD) Program from July 1, 2025, through June 30, 2030. No changes to the program were requested in the extension request.

The SUD demonstration allows for Medicaid coverage of short-term stays for Medicaid recipients between the ages of 21 and 64 in substance use treatment facilities known as institutions for mental diseases (IMDs). These facilities are referred to as institutions for mental diseases (IMDs). Coverage of residential services allows Medicaid enrollees to receive the appropriate level of care, reducing emergency department visits and increasing referrals for outpatient community-based services upon discharge.

The Nebraska SUD demonstration was initially approved under Section 1115 of the Social Security Act (SSA) for a 5-year demonstration period from July 1, 2019, through June 30, 2024. Nebraska DHHS received a one-year temporary extension on June 17, 2024, to extend the demonstration from July 1, 2024, through June 30, 2025.

Under the waiver, Nebraska has also increased access to community-based services. In June 2021, the State began coverage for Opioid Treatment Program (OTP) to provide Nebraskans additional outpatient treatment options.

The full text of Nebraska's 1115 SUD demonstration agreement with CMS can be found at the following link: Nebraska Section 1115 Substance Use Disorder Program

Program Update

Under the Section 1115 SUD Demonstration Waiver, the State has been able to cover 6,159 stays in institutions for mental diseases (IMDs) that would not have been otherwise covered.

IMD Stays (July 1, 2019 – March 31, 2025)
Total Stays	10,414
Stays Over 15 Days*	6,650
Stays Under 15 Days	3,625
Ongoing Stays**	139
Stays over 15 days account for 63.9% percent of IMD stays. These stays would not otherwise be covered without the 1115 SUD waiver. *Ongoing Stays include the number of stays still in progress at the end of the reporting period.

View the accessible PDF

Program Information

1115 SUD Demonstration Waiver Amendment Application

In accordance with 42 CFR 431.408, Nebraska DHHS submitted public notice on July 18, 2025 of its intent to submit an amendment application to CMS under Section 1115 of the Social Security Act. DHHS is seeking approval from CMS for a five-year amendment to the Nebraska 1115 SUD demonstration to:

Request expenditure authority for short-term medically necessary residential and inpatient stays primarily for mental health treatment within settings that meet the regulatory classification of an Institution for Mental Disease (IMD) for people with Serious Mental Illness (SMI)/ Serious Emotional Disturbance (SED); and
Request expenditure authority for coverage of medical respite care services provided to adult individuals who are homeless or at-risk of homelessness and are recovering from acute or acute-on-chronic physical health conditions post-discharge from an eligible setting.

MLTC will hold public hearings to receive comments on the Section 1115 demonstration amendment application.

The anticipated effective dates for this amendment are:

January 1, 2026 - coverage of SMI/SED stays in an IMD
April 1, 2026 - to implement medical respite care services

DHHS seeks public comment and input on its proposed demonstration amendment application.

Section 1115 SUD Demonstration Waiver Amendment

1115 SUD Renewal Application Approved

In accordance with 42 CFR 431.408, the Nebraska Department of Health and Human Services (DHHS), Division of Medicaid and Long-Term Care (MLTC) submitted the Nebraska Section 1115 Substance Use Disorder (SUD) Demonstration Waiver Renewal application to the Centers for Medicare and Medicaid Services (CMS). The 1115 SUD demonstration waiver, effective July 1, 2019, provides DHHS with the authority to receive federal Medicaid financial participation (FFP) for the coverage of SUD treatment-related stays in Institutions for Mental Diseases (IMDs) for adults ages 21-64. More specifically, the authority allows the state the flexibility to include in managed care capitation rate development IMD stays that exceed the 15-day limit found in 42 CFR 438.6(e). DHHS requested renewal of the waiver for an additional five (5) year period, July 1, 2024, through June 30, 2029.

On June 17, 2024, DHHS received a one-year temporary extension to the 1115 SUD Demonstration Waiver, extending the initial waiver period an additional year, July 1, 2024 through June 30, 2025.

On June 25, 2025, DHHS received the five-year approval, extending the Nebraska Substance Use Disorder Program from July 1, 2025, through June 30, 2030. DHHS did not request any changes to the waiver authority in the application and does not expect to make any changes to the demonstration program.