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Co-Occurring Disorders in Criminal Justice Settings

Financing Options for Co-Occurring Services in Criminal Justice Settings

Providing behavioral health services to justice-involved individuals with co-occurring disorders requires multiple funding strategies. Medicaid is the chief source of funding for community-based behavioral health services. However, coverage varies across states by eligibility, which is based on income level and degree of disability. As a result, many justice-involved individuals with co-occurring disorders have no access to health care outside of the constitutionally mandated services provided by jails and prisons.

Multiple funding strategies are essential

Many states and communities employ supplemental funding strategies to broaden eligibility and increase access to services for justice-involved people with co-occurring disorders. The funding sources described below can be used in various combinations to enhance existing services. These sources can also finance programs aimed at people with co-occurring disorders returning from incarceration or who are under community corrections supervision.

Coordination is key

Supplemental funding strategies listed below are most effective when organized as part of multiple financing streams that are coordinated by state or community interagency committees. An interagency committee can ensure that the needs and priorities of justice-involved people with co-occurring disorders are being met across multiple agencies. A committee can also provide agency-level advocacy on behalf of justice-involved individuals. In addition, a committee can monitor financing streams to facilitate sustainability of programs developed with grant funds.

Federal Government Funding

Federal grant programs that can be directed to persons with co-occurring disorders include:


  • Jail Diversion Trauma and Recovery — Priority to Veterans
  • Projects for Assistance in Transition from Homelessness Grant
  • Offender Reentry Program
  • Adult Treatment Court Collaborative
  • Adult Treatment Drug Courts
  • Enhancing Adult Drug Court Services, Coordination, and Treatment
  • Juvenile Treatment Drug Courts

Bureau of Justice Assistance

  • Byrne Justice Assistance Grants (JAG) Program
  • Drug Court Discretionary Grant Program
  • Justice and Mental Health Collaboration Program
  • Second Chance Act Program

Housing and Urban Development

  • Veterans Affairs Supportive Housing
  • Shelter Plus Care
  • Housing Choice Vouchers

State-Funded Initiatives

State legislatures have appropriated funds for justice-involved persons with co-occurring disorders. States may target funding to specific initiatives, such as law enforcement-based approaches or reentry aftercare programming. In Florida, a justice reinvestment act appropriated funds to provide counties with grants for jail diversion programs. The Texas Council on Offenders with Medical and Mental Impairments is a task force enacted by the Texas legislature. The Council provides funding for services and medication to strengthen the transition from incarceration to community-based services.

Justice Reinvestment Initiatives

Justice reinvestment is an approach to reduce state spending on corrections and reinvest the savings in strategies that can strengthen public safety and communities. Common themes in state reinvestment strategies include targeting individuals who violate the conditions of probation or parole supervision and improving access to community-based behavioral health services.

Targeted Allocations

The state of Washington passed legislation that permits counties to levy a sales tax (one-tenth of one percent) to support pre-booking diversion programs, including crisis stabilization units. Kentucky directs court fees to improve mental health screening and diversion programs in its jails.

Private Funding

Foundation funding can be used to develop or enhance programs for justice-involved persons with co-occurring disorders. The Health Foundation of Greater Cincinnati, the Staunton Farm Foundation, and the Jacob and Valeria Langeloth Foundation are examples of foundations that have funded behavioral health services for justice-involved people.

Improving Access to Benefits

While not a Federal mandate, in most communities Medicaid is terminated after an individual has been incarcerated for 30 days. State legislatures in Florida, New York, Illinois, Oregon, and Michigan have enacted laws that suspend rather than terminate Medicaid while a person is incarcerated. In these states, an individual's Medicaid benefits can be reinstated upon release from jail or prison. Also, SSI/SSDI Outreach, Access and Recovery training (known as SOAR) exit disclaimer improves first application approval rates, and it expedites receipt of benefits necessary to access services and housing.

Braiding Resources

Some states and communities braid funding for mental health, substance abuse, and other sources to promote integrated services for justice-involved persons with co-occurring disorders.

For example, Maryland used Byrne Grant funds, Housing and Urban Development Shelter Plus Care Funds, and state funding to develop the TAMAR program for justice involved women with co-occurring disorders and their children. The cities of Chicago, New York, and Seattle as well as the state of Rhode Island have employed housing-first initiatives. This approach blends federal housing funds, state and local funding, and grants to develop comprehensive housing and supportive services for justice-involved persons with co-occurring disorders.


These supplemental funding strategies do four things:

1. Provide bridging services between institution and community until Medicaid and other benefits can be obtained

2. Broaden the target population expanding diagnostic or functional categories served

3. Supplement existing community services where there are capacity issues

4. Pay for services not available from Medicaid or other health insurers (e.g., transportation, gap funding for medication)

Resources and Links

  • A case example of blending funds to serve justice-involved individuals with co-occurring disorders. This fact sheet provides information on developing ways to blend funding streams at the local program level in order to serve people with co-occurring disorders being diverted from incarceration. The King County diversion program is described as a case example.

  • A report based on the 2010 justice reinvestment and public safety summit. This report summarizes a 2010 national summit on Justice Reinvestment and Public Safety. The report highlights the research, challenges, principles, strategies and case studies for developing cost-effective policies that reduce recidivism and crime.

  • A review of Maryland's experience using funding to support programs for people with co-occurring disorders involved in the justice system. This brief discusses Maryland's experience using funds to support unique programs serving individuals with co-occurring substance use disorders and trauma histories who may be homeless or incarcerated. The four defined goals of these programs are: to prevent recidivism to homelessness, detention centers, and psychiatric hospitals; to deliver coordinated services to adults with special needs; to evaluate the effectiveness of interventions; and to identify and fund gaps in the provision of services.

  • Highlights innovative reentry supportive housing programs around the country. This booklet highlights the issue of homelessness among the criminal justice population, innovative programs in New York, Chicago, Ohio and Los Angeles and provides some promising outcomes around reentry supportive housing.

  • Recommendations for linking individuals with co-occurring disorders in corrections to benefits. A blueprint to guide agencies connecting justice-involved individuals with co-occurring disorders to federal benefits and services upon release back into the community. The three-volume guide addresses the case for benefit assistance as part of re-entry programming, what state and local governments and correctional facilities can do, and an appendix with resource materials.