CMS withdrew the social needs framework in 2025. The waivers paying for housing and nutrition support now expire with renewals pending and none approved.
Key Takeaways
- Framework withdrawn: The federal framework that authorized housing and nutrition services in Medicaid was withdrawn in March 2025, leaving states to argue each request on its own.
- Expiring now: Waivers approved under that framework began expiring in 2026, and the District of Columbia reported this summer that CMS has approved no HRSN-focused renewal.
- A harder budget test: New federal budget rules issued in June add another test to what a state can afford to carry into a renewal.
- Who carries the risk: Behavioral health and SUD providers that built tenancy support, respite and outreach lines on waiver money face a renewal question, not only a policy debate.
A slide in a District of Columbia Medicaid presentation this June is titled like a status report on the end of a federal policy era: Updates on 1115 HRSN Waivers Expiring in 2026. Beneath it, the Department of Health Care Finance recorded its own position plainly. The District submitted a waiver renewal application in June 2024 that included housing services. The application remains pending. In 2025, the presentation notes, CMS rescinded the health-related social needs framework the District had referenced in building it, and no HRSN-focused 1115 waiver has been approved since.
That sentence describes the position of a substantial piece of Medicaid’s behavioral health infrastructure. Over the preceding three years, states built tenancy support, medical respite, nutrition services and community health worker programs on 1115 authority, much of it aimed at people with serious mental illness, substance use disorders or both. The authority that funded those services is now expiring on a schedule set years ago, into a federal posture that has changed.
How the Health-Related Social Needs Framework Was Built, Then Withdrawn
CMS opened the lane in December 2022 and formalized it with a framework and guidance documents in 2023 and 2024. Eighteen states received approvals under it, covering services such as housing navigation, tenancy support, home-delivered meals, nutrition counseling and, in some states, respite and employment supports, as KFF documented while the approvals were landing.
These services were bounded rather than open-ended. Approved nutrition benefits ran to as much as three meals a day for up to six months, tailored to conditions that respond to diet. Housing benefits covered navigation, application assistance, tenancy sustaining services and, in several states, time-limited rent or temporary housing for people transitioning out of institutions or homelessness. States had to define eligible populations narrowly, document medical appropriateness and submit an evaluation strategy for CMS approval. The design assumed a federal partner that wanted the data.
On March 4, 2025, the agency withdrew the framework and both bulletins. The agency said it would evaluate these requests individually, without reference to the withdrawn documents, as the Association of American Medical Colleges summarized at the time. Existing approvals were not canceled. What disappeared was the template states had been drafting against, along with the signal that these services were a federal priority.
What Followed the Rescission
The posture tightened through 2025 and 2026. In July 2025, CMS told states it would no longer renew continuous eligibility flexibilities or approve workforce initiatives under 1115 authority. A Health Affairs analysis of the sequence noted that the administration also barred employment supports from 1115 waivers and moved to phase out Designated State Health Program funding, which several states had used as the federal match behind social-needs services.
In June 2026, CMS issued guidance implementing the reconciliation law’s budget neutrality requirement for 1115 demonstrations. The Center for Health Law and Policy Innovation at Harvard noted that the methodology adds administrative and budgetary pressure on states using these waivers to test new models, and counted 23 states currently using 1115 authority to address health-related social needs. Budget neutrality is the mechanism that determines how much room a state has to carry existing services into a renewal.
Each of these changes is narrow on its own. Together they remove most of the financing techniques states used to build social-needs programs: the framework that described what CMS would approve, the state health program funding that supplied the federal match, the workforce authority that paid to train the staff, and now a tighter test for whether the arithmetic works at all.
The Renewal Calendar States Are Facing
California submitted its renewal request in May 2026 and is awaiting a decision, according to the District’s tracking of waivers expiring this year, even as the state works through the separate Medi-Cal changes required by the 2025 reconciliation law. Massachusetts has told stakeholders it plans to submit an extension request late in 2026 for a 2028 through 2032 demonstration that includes both behavioral health services and health-related social needs among its pillars. Colorado offers the clearest picture of how these decisions are landing in practice: CMS approved a temporary 90-day extension of the state’s substance use disorder continuum waiver on June 30, 2026, carrying it through December 31, while the state’s continuous eligibility provisions were blocked under the updated federal policy.
Short extensions are not refusals, and pending is not denied. For a provider holding a contract that depends on one of these authorities, though, a 90-day extension and an unanswered renewal application produce the same planning problem: a revenue line with no confirmed horizon.
Hiring is where the consequence shows up first. A community health worker or housing navigator is a person on a payroll, not a line item that can be paused for a quarter while a federal decision clears. Organizations facing an uncertain renewal tend to stop backfilling those roles first, and in a sector already short of staff, as Acuity has reported on behavioral health workforce shortages, those positions do not refill quickly once they lapse. The service degrades before any formal decision arrives. By the time a renewal is approved or denied, the staffing that made the program work may already have dispersed.
Where the Exposure Concentrates in Behavioral Health
Eligibility criteria explain the exposure. Many approved HRSN waivers reach people through a behavioral or mental health diagnosis, which makes behavioral health organizations the delivery channel for services that sit outside any behavioral health benefit. Tenancy support for someone with serious mental illness, medical respite after an inpatient stay, and post-overdose outreach are all work that community behavioral health organizations took on because the waiver paid for it, often for the same patients whose care already crosses the billing silos between mental health and addiction treatment.
These are also precisely the services that conventional reimbursement handles worst. Acuity’s reporting on Medicaid peer support rates and on the reimbursement gap for evidence-based behavioral health services describes the same structural problem from a different angle: the work that keeps people stable between clinical encounters rarely has a clean billing pathway. Waiver authority was the pathway. Organizations that staffed up around it, often hiring community health workers and peer specialists, carry that payroll into the renewal window.
Reentry programs sit in an adjacent position. A separate set of 1115 authorities lets states cover services for people leaving jails and prisons in the weeks before release, a population with high rates of substance use disorder and serious mental illness, and several of those requests were still pending when the administration changed. Providers who built release-planning capacity under that authority face the same question on a different clock.
In Lieu of Services and the Other Routes States Have
States are not out of options. Forty states already authorize Medicaid managed care organizations to use in lieu of services arrangements to address general health, behavioral health or social needs, according to the Health Affairs analysis, which gives managed care contracts a route to preserve some services without 1115 authority. Those arrangements come with their own cost limits and contract cycles, and they shift negotiating leverage toward the plans.
The evidence question is unsettled rather than unfavorable. Early evaluation results from North Carolina’s waiver have been encouraging, the same analysis notes, even as the state debates ongoing funding. Whether that evidence shapes renewal decisions is now an individual determination at CMS, which is what the rescission established.
There is a question worth asking managed care plans now rather than later: if the waiver authority lapses, which of these services does the plan intend to continue buying, and under what contract vehicle. Plans have their own incentives to preserve services that reduce inpatient and emergency use, and some will. The answer will differ by plan and by market, and it is better obtained during a contracting cycle than during a wind-down.
Providers can do one useful thing before the decisions arrive: identify which revenue lines rest on 1115 authority, when that authority expires, and whether the service has a managed care or clinic-based payment alternative. The organizations that know the answer in advance will negotiate from a different position than the ones that learn it from a termination notice.
