; and (2) by adding at the end the following new subsection: (h) Demonstration To test the provision of recovery housing for individuals with opioid use disorder under Medicaid (1) In general The CMI, in consultation with the Secretary of Housing and Urban Development and other agencies, as the Secretary determines appropriate, shall conduct a demonstration project (referred to in this subsection as the demonstration ) to test whether providing Medicaid managed care entities with an elevated global capitated budget for eligible Medicaid beneficiaries, paired with flexibilities to allow States to provide medical assistance for recovery housing for such beneficiaries, would result in reduced emergency department visits, hospitalizations, and program expenditures under per beneficiary, or improve quality of care for the such beneficiaries without increasing expenditures under the Medicaid program under title XIX. (2) Demonstration requirements (A) In general Under the demonstration, each eligible State that is selected by the CMI to participate in the demonstration shall enter into an agreement with a Medicaid managed care entity under which the entity agrees to provide services (including recovery housing) to eligible Medicaid beneficiaries under a payment model that meets the requirements of subparagraph (B). (B) Capitated payments (i) In general The CMI shall establish a capitated payments system for Medicaid managed care entities under the demonstration that is based on the demonstration budget determined under clause (ii). (ii) Demonstration budget (I) In general For purposes of clause (i), the demonstration budget of a Medicaid managed care entity for each year of a demonstration period shall be determined by the CMI based on the number of eligible Medicaid beneficiaries enrolled with the entity and the average annual spending under title XIX in the State involved on individuals who are enrolled in the State plan under such title (or a waiver of such plan) and who— (aa) have a diagnosis of opioid use disorder