Does Medicaid Cover Drug & Alcohol Rehab

Yes. Medicaid does cover drug and alcohol rehab. Every state Medicaid program pays for substance use disorder treatment in some form, and the covered continuum usually includes medically supervised detox, inpatient rehabilitation, outpatient counseling, and medication-assisted treatment. What varies from state to state is the detail, meaning which specific services get reimbursed, how long a plan authorizes them, and what documentation it wants before approving an admission.

In New York, that coverage flows through NY Medicaid and its managed care plans, and treatment is delivered by programs certified by the New York State Office of Addiction Services and Supports (OASAS). Arms Acres is an OASAS-licensed inpatient treatment center in Carmel Hamlet, and we accept most insurance plans, including Medicaid.

If you want to know what your own plan will pay for before committing to anything, our intake team can verify your benefits over the phone. Call 888-227-4641 for inpatient admissions, or start with our admissions page.

Medicaid rehab coverage at a glance

• Medicaid covers withdrawal management, inpatient rehabilitation, outpatient treatment, medication-assisted treatment, and counseling for substance use disorders.
• Coverage details, prior authorization rules and length of stay limits are set by each state and, in New York, by each Medicaid managed care plan.
• About 80 percent of people who needed substance use disorder treatment in 2024 did not receive it, according to SAMHSA.
• New York ended twelve-month continuous eligibility for adults in 2026, so an active benefit card is no longer proof of active coverage.
• Arms Acres accepts most insurance plans, including Medicaid, and our intake team verifies benefits before admission.

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Overview of Medicaid Coverage

Medicaid is the largest payer for behavioral health services in the U.S. and provides coverage for a wide range of substance use disorder treatment services, including drug and alcohol rehab. KFF reports that 21 percent of Medicaid enrollees have a mild, moderate or severe substance use disorder, compared with 16 percent of people covered commercially. That gap is why Medicaid rules shape access to addiction treatment more than any other payer's rules do.

It covers a broad array of services to address substance use disorders, offering support in both inpatient and outpatient settings.

Covered services generally fall into six groups, and each one maps to a level of care at Arms Acres.

• Medically supervised withdrawal management, commonly called detox, delivered with round the clock nursing and physician oversight. See our detox program.
• Inpatient and residential rehabilitation for people who need a structured setting away from the environment where they were using. See inpatient treatment and adult rehabilitation.
• Outpatient treatment and clinic-based counseling for people who can stay at home and keep working. See our outpatient programs.
• Medication-assisted treatment using FDA-approved medications alongside counseling. See medication assisted therapy.
• Psychiatric assessment and treatment for co-occurring mental health conditions. See psychiatric services.
• Recovery support and aftercare that continues after discharge. See recovery coach services and our alumni program.

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Does Medicaid Cover Rehab at Arms Acres?

Arms Acres is a 191-bed licensed facility on a 54-acre campus in Carmel Hamlet, in Putnam County, New York, roughly 60 miles north of New York City. The program is accredited by The Joint Commission, licensed by NYS OASAS, and employee-owned. It is also certified by SAMHSA as an Opioid Treatment Program and accredited by CARF.

On coverage, we accept Medicaid, including Healthfirst, Fidelis Care, MetroPlus Health and MVP Healthcare, alongside Medicare and most major commercial plans, and our team verifies benefits during that first call.

The Opioid Treatment Program certification is worth understanding if your question is about medication. It is the federal certification required to dispense methadone. That is why suboxone and methadone induction, maintenance and monitoring are handled on site when clinically necessary, rather than by sending someone out to a separate clinic and hoping the handoff holds.

Bed count matters more here than most people expect. A long-standing federal rule, the Institution for Mental Diseases exclusion, normally blocks federal Medicaid funding for residential psychiatric or addiction facilities with more than 16 beds. New York works around it through its Section 1115 Medicaid Redesign Team demonstration, which waives that exclusion and allows continued federal funding for facilities specializing in psychiatric or substance use disorder care that exceed 16 beds. That waiver is the mechanism that lets NY Medicaid pay for inpatient substance use disorder treatment at a facility this size.

New York also standardizes how the level of care decision gets made. Under the Insurance Law and Part 819 of the OASAS regulations, plans and providers must use the Level of Care for Alcohol and Drug Treatment Referral tool, known as LOCADTR 3.0, for treatment delivered inside New York State. It applies to Medicaid and to commercial coverage alike. In practice that means the recommendation for detox, inpatient rehabilitation or outpatient care rests on a documented clinical assessment rather than on a plan's internal preference.

To start, call inpatient intake at 888-227-4641. For outpatient services, call the Bronx outpatient clinic at 718-653-1537, the Carmel outpatient clinic at 845-704-6133, or the Queens outpatient clinic at 718-520-1513. You can also review the areas we serve.

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The Treatment Gap Medicaid Is Meant to Close

Coverage only matters if people use it, and most still do not.

• In 2024, nearly 50 million people aged 12 or older, or 16.8 percent of that population, met the diagnostic criteria for a past year substance use disorder, according to the National Survey on Drug Use and Health. Roughly 27.9 million had an alcohol use disorder, and 28.2 million had a drug use disorder.
• SAMHSA reported that 80 percent of the people who needed substance use disorder treatment in 2024 did not receive it.
• Overdose deaths are falling. CDC provisional data put 2025 overdose deaths at roughly 69,973, down about 14 percent from 81,313 in 2024, the third consecutive annual decline. Deaths involving opioids fell from an estimated 55,296 to 44,564.
• New York was among the states with the steepest improvement, posting a decline of 25 percent or more against the prior year.

The national picture is improving, and that is real progress. It also means the difference between a good outcome and a bad one now rests heavily on whether someone gets into treatment at all. Coverage confusion is a solvable reason to delay, and a phone call resolves it faster than more reading does.

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Importance of Medicaid Coverage for Substance Abuse

Medicaid plays a crucial role in providing access to drug and alcohol rehab for individuals who may not have the financial means to afford treatment on their own. It ensures that individuals struggling with substance abuse have the opportunity to receive the necessary care and support they need to overcome addiction.

By covering a broad range of services, Medicaid ensures that individuals have access to comprehensive treatment options, including inpatient and outpatient programs, therapy, and medication-assisted treatment. This comprehensive approach addresses the physical, emotional, and psychological aspects of addiction, increasing the chances of successful recovery. At Arms Acres, that continuum sits on a single campus, so a patient can move from detox into adult rehabilitation without transferring to a different facility.

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Coverage Variation by State

While Medicaid covers drug and alcohol rehab in all states, it's important to note that coverage may vary from state to state. Each state has the flexibility to determine the specific services covered and the eligibility requirements for individuals seeking substance abuse treatment.

New York is a Medicaid expansion state, and NY Medicaid covers the full substance use disorder continuum through both fee-for-service Medicaid and Medicaid managed care. Members with significant behavioral health needs may be enrolled in a Health and Recovery Plan, known as a HARP, which adds care management and recovery-oriented supports on top of the standard benefit.

To understand the coverage available in your state, it is advisable to consult your state Medicaid agency or visit the official Medicaid website for detailed information. They can provide you with specific details about the services covered, eligibility criteria, and any additional requirements that may apply.

Navigating the Medicaid coverage for drug and alcohol rehab can be overwhelming, but understanding the available services, eligibility requirements, and the importance of this coverage can empower individuals to seek the necessary treatment and support needed to overcome substance abuse.

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Services Covered by Medicaid for Drug and Alcohol Rehab

When it comes to drug and alcohol rehab, Medicaid plays a vital role in providing coverage for individuals who qualify. Medicaid covers a broad range of services to address substance use disorders, ensuring that individuals have access to the necessary treatment and support. Let's explore some of the key services covered by Medicaid for drug and alcohol rehab.

Inpatient Treatment Programs

Medicaid provides coverage for inpatient treatment programs, which offer intensive and structured care for individuals with severe substance use disorders. Inpatient treatment typically involves a stay at a residential facility where individuals receive around-the-clock support and supervision. This level of care is especially beneficial for those who require a highly structured environment to overcome their addiction. Arms Acres delivers this level of care through its inpatient program, which includes medically supervised detox and adult rehabilitation on the same campus.

Outpatient Treatment Services

For individuals who do not require 24-hour care, Medicaid also covers outpatient treatment services. Outpatient programs allow individuals to receive treatment while living at home and continuing with their daily responsibilities. These programs may include individual and group counseling, educational sessions, and support groups. Outpatient treatment is often a suitable option for individuals with milder substance use disorders or those transitioning from inpatient care. Arms Acres operates outpatient clinics in the Bronx, Carmel, and Queens for people who do not need round-the-clock care or who are stepping down after inpatient treatment.

Medication-Assisted Treatment

Medicaid recognizes the effectiveness of medication-assisted treatment (MAT) for substance use disorders. MAT involves the use of medications, such as methadone, buprenorphine, or naltrexone, in combination with counseling and behavioral therapies. These medications help to alleviate withdrawal symptoms, reduce cravings, and support long-term recovery. Medicaid covers the cost of these medications and the associated counseling services. Arms Acres offers medication-assisted therapy when it is clinically necessary, combined with counseling rather than in place of it.

Counseling and Therapy

Counseling and therapy are integral components of drug and alcohol rehab. Medicaid covers various counseling services, including individual therapy, group therapy, and family therapy. These counseling sessions aim to address the underlying causes of substance abuse, develop coping mechanisms, and provide support throughout the recovery process. Medicaid ensures that individuals have access to the necessary mental health professionals who can guide them on their path to recovery. Programming at Arms Acres is directed by licensed physicians, psychiatrists, mental health counselors, nurses, social workers and addiction counselors. It includes psychiatric services for co-occurring conditions alongside an equine therapy program and a fitness and recreation program. Coverage for any individual service still depends on your plan and on medical necessity.

It's important to note that the specific coverage for drug and alcohol rehab services may vary by state. Each state has its own guidelines and regulations regarding Medicaid coverage. However, Medicaid covers drug and alcohol rehab in all 50 states in the United States, providing assistance to those struggling with substance abuse issues. By consulting their state Medicaid agency, individuals can gain a better understanding of the available services and eligibility requirements in their specific state.

If you are trying to work out whether your plan covers a specific level of care, a benefits check gets you there faster than more research. Call 888-227-4641 and an intake coordinator can tell you what your plan shows.

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Eligibility and Requirements for Medicaid Coverage

To access Medicaid coverage for drug and alcohol rehab, individuals must meet certain eligibility criteria. These criteria generally include income and household size requirements, along with state-specific guidelines.

Income and Household Size Criteria

Medicaid is a government-funded program that provides healthcare coverage to individuals and families with limited income and resources. The income and household size criteria for Medicaid eligibility vary by state. Generally, individuals with incomes below a certain percentage of the federal poverty level (FPL) are eligible for coverage.

It's important to note that Medicaid expansion under the Affordable Care Act (ACA) has increased the income eligibility threshold in some states. This expansion has allowed more individuals to qualify for Medicaid and access the necessary support for substance abuse treatment.

Each state sets its own income limits and guidelines for Medicaid eligibility, so it's crucial to check the specific requirements in your state. You can consult your state's Medicaid agency or visit their website for detailed information on income and household size criteria.

Enrollment is also moving. The KFF enrollment tracker put national Medicaid enrollment at 66.7 million in April 2026, down roughly 5 million people, or about 6 percent, from April 2025. Combined Medicaid and CHIP enrollment fell in every state over that period. The practical consequence is that more people now arrive at a treatment center assuming their coverage is active when it has already lapsed.

State-Specific Eligibility Guidelines

Medicaid coverage for drug and alcohol rehab may vary by state. While Medicaid covers drug and alcohol rehab in all 50 states in the United States, the specific services covered and the extent of coverage may differ. However, other states may have limitations or restrictions on the services covered.

New York made two changes in 2026 that bear on this directly. To comply with July 2025 CMS guidance, the state discontinued twelve-month continuous eligibility for adults, so adults are now redetermined through standard renewal processes. Pregnant members and members up to twelve months postpartum keep twelve-month continuous eligibility. The state also discontinued continuous eligibility for children up to six years of age.

To understand the available services and eligibility requirements for drug and alcohol rehab through Medicaid in your state, it is essential to consult with your state's Medicaid agency. They can provide specific information about the coverage options, treatment facilities, and any additional requirements you need to meet.

It's worth noting that the Affordable Care Act requires states to cover substance use disorder treatment for their Medicaid expansion population. However, the specific services reimbursable under Medicaid can vary by state [3]. Therefore, it's crucial to consult with your state's Medicaid agency to determine which services are covered and to ensure you have accurate information about the eligibility guidelines in your state.

Understanding the eligibility and requirements for Medicaid coverage is essential for individuals seeking drug and alcohol rehab services. By meeting the income and household size criteria and understanding the state-specific guidelines, individuals can access the necessary support for their recovery journey.

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What Changes for New York Medicaid in 2027

Two timelines are worth knowing about if you are on Medicaid and weighing treatment.

First, the New York Section 1115 Medicaid Redesign Team demonstration is scheduled to expire on March 31, 2027. The state Department of Health has requested a five-year extension, and the public comment period on that request closed on August 21, 2026. The extension asks to continue the waiver of the Institution for Mental Diseases exclusion for residential and inpatient substance use disorder treatment, which is the authority that preserves federal funding for specialized facilities with more than 16 beds.

Second, the 2025 federal reconciliation law, Public Law 119-21, created Medicaid community engagement requirements, often called work requirements. CMS issued an interim final rule on June 1, 2026, and states must generally implement the requirement no later than January 1, 2027. It applies to non-pregnant adults aged 19 to 64 who are not on Medicare and who are enrolled in the Medicaid adult group. Those adults must document 80 hours a month of work, community service, a work program, or at least half-time enrollment in an educational program. Activities can be combined, and monthly income of at least 80 times the federal minimum wage, which CMS puts at 580 dollars a month in 2026, also satisfies it.

Being in treatment is itself an exemption

This is the part worth reading twice. CMS lists participants in a drug or alcohol rehabilitation or treatment program among the adults who are exempt from the work requirement. It sits alongside the separate exemption for adults who are medically frail or who otherwise have special medical needs that significantly impair their ability to comply. States are also permitted, at their option, to offer short-term hardship exceptions covering adults receiving inpatient hospital services.

So entering treatment does not put your Medicaid at risk under the new rule. On the documented federal exemptions, it points the other way. It is still worth acting rather than waiting. If a state cannot verify that someone met the requirement, it must send a notice and give 30 calendar days to show compliance or an exemption, and someone who is disenrolled can reapply at any time. Handling that from inside a treatment program with an intake team helping is easier than handling it alone. Our admissions team can check your coverage and talk through the exemption on one call.

The Affordable Care Act and Medicaid Expansion

The Affordable Care Act (ACA) has played a significant role in expanding access to substance abuse treatment coverage through Medicaid. This section will explore the impact of the ACA on substance abuse treatment coverage and the inclusion of essential health benefits for substance use disorder treatment.

Impact of the ACA on Substance Abuse Treatment Coverage

Under the ACA, state Medicaid programs that have adopted the Medicaid expansion are required to cover substance use disorder treatment in their alternative benefit plans. The most widely cited estimate of how many people it reached comes from research published in 2017, and it no longer reflects current enrollment. What is not in dispute is Medicaid's share of the market. Medicaid remains the single largest payer of behavioral health services in the United States.

Prior to the ACA, many individuals with substance use disorders faced significant barriers to accessing treatment due to limited insurance coverage. The ACA has helped to address this issue by expanding coverage options, making it easier for individuals to seek the necessary care and support.

Essential Health Benefits and Substance Use Disorder Treatment

The ACA also introduced the concept of essential health benefits, which require state Medicaid expansion programs to include coverage for treating substance use disorders in their alternative benefit plans. However, the ACA does not specify which specific services must be included, giving traditional Medicaid programs broad discretion over substance use disorder benefit decisions.

While the ACA mandates coverage for substance use disorder treatment, the specific services covered may vary by state. States have the flexibility to decide which individual services are reimbursable, leading to variations in coverage across different regions.

It is worth noting that while the ACA has expanded access to substance abuse treatment coverage, many states did not initially cover all levels of care required for effective substance use disorder treatment or medications required for effective opioid use disorder treatment as defined by the American Society of Addiction Medicine criteria [3]. However, the expansion of Medicaid under the ACA has undoubtedly improved access to treatment for many individuals with substance use disorders.

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Levels of Care for Effective Substance Use Disorder Treatment

When it comes to treating substance use disorders, it's important to have a comprehensive understanding of the different levels of care available. The American Society of Addiction Medicine (ASAM) criteria provide guidance on four levels of care that are essential for effective treatment of substance use disorders [3].

ASAM Criteria and Treatment Levels

The ASAM criteria specify the following levels of care:

• Level 1, outpatient services. Regularly scheduled counseling and clinical care while living at home. See outpatient programs.
• Level 2, intensive outpatient and partial hospitalization services. A higher weekly intensity than standard outpatient care, without an overnight stay.
• Level 3, residential and inpatient services. Structured treatment with round-the-clock support in a licensed facility. See adult rehabilitation.
• Level 4, medically managed intensive inpatient services. The highest intensity of care, with nursing and physician availability for withdrawal and medical complications. See our detox program.

In New York, the placement decision is documented through LOCADTR 3.0 rather than negotiated informally with a plan, which is why a clinical assessment is the first step at admission.

Understanding the different levels of care can help individuals and their healthcare providers determine the most appropriate treatment plan based on the severity of the substance use disorder and the individual's unique needs.

Psychosocial Treatment and Medication Options

Psychosocial treatment, which encompasses therapy and counseling, plays a crucial role in the effective treatment of substance use disorders. The ASAM guidelines recommend that all opioid use disorder medications be offered in conjunction with the appropriate level of psychosocial treatment. This combination approach has been found to have better outcomes in helping individuals recover from opioid addiction.

The FDA has approved four medications that can be used in combination with psychosocial treatment for effective treatment of opioid use disorders: methadone, buprenorphine, and both oral and extended-release injectable naltrexone. These medications work by reducing cravings, managing withdrawal symptoms, and blocking the effects of opioids.

Medicaid coverage for substance use disorders includes a broad array of services such as inpatient detoxification, outpatient counseling, and peer recovery support services [4].

By understanding the levels of care and the available treatment options, individuals seeking substance use disorder treatment can make informed decisions about their recovery journey. It's important to consult with healthcare professionals and explore the services covered by Medicaid to receive the appropriate treatment and support for effective recovery.

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Navigating Medicaid Coverage for Drug and Alcohol Rehab

When it comes to accessing drug and alcohol rehab services through Medicaid, navigating the system can sometimes feel overwhelming. However, with the right information and guidance, individuals can successfully utilize their Medicaid coverage for substance abuse treatment. Here are some key steps to help navigate Medicaid coverage for drug and alcohol rehab:

Consulting State Medicaid Agency

Each state has its own Medicaid program with specific guidelines and requirements. The first step in navigating Medicaid coverage for drug and alcohol rehab is to consult the state Medicaid agency. They can provide detailed information about the services covered, eligibility criteria, and the application process. By reaching out to the state Medicaid agency, individuals can gain a clear understanding of the specific requirements and options available to them.

Understanding Available Services

Medicaid is the largest payer for behavioral health services in the United States and provides coverage for a wide range of substance use disorder treatment services, including drug and alcohol rehab. Understanding the available services is crucial for individuals seeking treatment. Medicaid typically covers both inpatient and outpatient drug and alcohol rehab programs, ensuring that individuals have options based on their needs and circumstances. By familiarizing themselves with the covered services, individuals can make informed decisions about the most appropriate treatment options for their recovery journey.

Receiving Substance Abuse Treatment with Medicaid

Once eligibility is determined and the available services are understood, individuals can begin the process of receiving substance abuse treatment with Medicaid. It is important to connect with healthcare providers and treatment facilities that accept Medicaid. These professionals can guide individuals through the treatment process and help ensure that the services they receive are covered by Medicaid.

During treatment, it is important to follow the prescribed treatment plan and attend all necessary appointments. Medicaid coverage for drug and alcohol rehab is typically contingent upon individuals actively participating in their treatment program. By actively engaging in the treatment process, individuals can maximize the benefits of their Medicaid coverage and increase their chances of successful recovery.

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How to Verify Your Medicaid Coverage for Rehab

1. Find your Medicaid member identification number and the name of your managed care plan. Both appear on your benefit card.
2. Confirm that the coverage is currently active. Because New York ended twelve-month continuous eligibility for adults, holding a card is not the same as being enrolled.
3. Decide which level of care you are asking about, since detox, inpatient rehabilitation, and outpatient treatment are authorized separately.
4. Complete the clinical assessment with the intake team. In New York, this drives the LOCADTR 3.0 level of care recommendation your plan reviews.
5. Call 888-227-4641. An intake coordinator will verify benefits, explain what your plan shows, and answer questions about length of stay, what to bring, the family program and transportation to the facility.

You can also review our admissions process, read the frequently asked questions, or contact us directly. All information is kept confidential.

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Frequently Asked Questions About Medicaid and Rehab

Does Medicaid cover inpatient drug and alcohol rehab in New York?

Yes. NY Medicaid reimburses residential and inpatient treatment for adults and children with opioid and other substance use disorders. The New York Section 1115 demonstration waives the Institution for Mental Diseases exclusion, which is what allows federal Medicaid funding to reach specialized facilities with more than 16 beds.

Does Medicaid cover detox?

Yes. Medically supervised withdrawal management is a covered service. Arms Acres provides medically supervised inpatient detox and crisis counseling to patients throughout the Northeast. See our detox program.

Does Arms Acres accept Medicaid?

Yes. Arms Acres accepts Medicaid, including Healthfirst, Fidelis Care, MetroPlus Health and MVP Healthcare, along with Medicare and most major commercial plans. Because plan contracts change, it is still worth having your specific plan checked before admission, and our intake team will do that on the first call. Call 888-227-4641.

How long will Medicaid pay for rehab?

There is no fixed number. Length of stay follows documented medical necessity and the authorization your plan issues, and it is reviewed while you are in treatment. In New York, continuing stay reviews use the LOCADTR concurrent review module.

What will I pay out of pocket?

That depends on your plan and on the service. Ask the intake coordinator to walk through what your plan shows before admission rather than after.

Will the new Medicaid work requirements affect me if I go to rehab?

Entering treatment should not put your coverage at risk. In its interim final rule, CMS lists participants in a drug or alcohol rehabilitation or treatment program among the adults exempt from the work requirement, separately from the exemption for adults who are medically frail or have special medical needs that significantly impair their ability to comply. States must generally implement the requirement by January 1, 2027.

What if my Medicaid lapsed, or I received a renewal notice?

Reapply, and call anyway. Adults in New York are now redetermined through standard renewal rather than held on twelve-month continuous eligibility, so lapses are more common than they were two years ago. You can reapply at any time, and delaying treatment while paperwork resolves is usually the worse of the two risks.

Talk to Someone Today

Medicaid covers drug and alcohol rehab. What usually stops people is not the policy, it is the uncertainty about what their own plan will actually do. That is a phone call, not a research project.

Call Arms Acres intake at 888-227-4641 for inpatient admissions. For outpatient care, call the Bronx clinic at 718-653-1537, the Carmel clinic at 845-704-6133, or the Queens clinic at 718-520-1513. If you would rather write, use our contact form.

References

[3]: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5304419/

[4]: https://www.medicaid.gov/medicaid/benefits/behavioral-health-services/substance-use-disorders/index.html

[5] SAMHSA. Key Substance Use and Mental Health Indicators in the United States, Results from the 2024 National Survey on Drug Use and Health.

[6] CDC National Center for Health Statistics. Provisional drug overdose death counts, May 2026 release.

[7] KFF. A Look at Substance Use Disorders Among Medicaid Enrollees.

[8] KFF. Medicaid and CHIP Monthly Enrollment Tracker.

[9] CMS. Medicaid Community Engagement Requirement for Certain Individuals, interim final rule with comment period, June 2026.

[10] New York State Department of Health. Medicaid Update, June 2026, Volume 42, Number 7, 1115 Medicaid Redesign Team waiver extension application.

[11] NYS OASAS. Guidance for Implementation and Utilization Review for Addiction Services, LOCADTR 3.0.

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