January 21, 2025
Once again, the Governor’s proposed budget bills are available here: https://www.budget.ny.gov/pubs/archive/fy26/ex/fy26bills.html
Note: Article VII bills are the statutory language changes that accompany the appropriations. That is where we will see the bulk of the Governor’s proposals for Medicaid. We will be watching for the announcement of the schedule of joint legislative budget hearings, and we will aim to testify at the Health/Medicaid hearing.
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Below are my first blush (VERY early) notes re: what I see in the ’25-’26 Budget Briefing Book (not the actual bills) released a few hours ago. These notes should not be taken as the final word on any specific proposal until we have had time to review the legislative language supporting these proposals and we have identified the corresponding approps. Suffice to say there are still numerous layers of the onion to peel.
First, more on 2.1% proposed increase for Human Services sub-sectors sectors (named directly below):
Multiple Agency Increase: Includes a Targeted Inflationary Increase of 2.1 percent to voluntary operated providers of services for OPWDD, OMH, OASAS, Office of Children and Family Services (OCFS), Office of Temporary and Disability Assistance (OTDA), and the State Office for the Aging (SOFA). For Mental Hygiene agencies, the Targeted Inflationary Increase provides an additional $195.4 million ($328.3 million including Federal matching funds) for OPWDD, OMH, and OASAS programs in FY 2026. (Not restricted to lowest paid workers at this point)FQHCs and D&TCs – Hochul budget pledges an additional $10,000,000 in year one of the MCO Tax to raise rates for both FQs and D&TCs.
OMH: $11.9M to increase stipends for 18,000 OMH Supported Housing units.
OMH and OASAS: Commercial Rate Mandate Compliance: Provides $1 million for additional staff to monitor compliance with Part AA – the new Commercial Rate mandate. OMH will provide network monitoring and surveillance, and will work with DFS and DOH on compliance enforcement through citations and/or fines.
Strengthen Managed Care Contracting and Performance. The Medicaid Model Contract between Managed Care Organizations (MCOs) and New York State spells out the services and benefits which MCOs must provide to Medicaid beneficiaries. The Budget creates a more robust process for holding managed care plans accountable for their performance by imposing additional fines on plans who fail to meet Medicaid Model contract requirements.
Standardize Applied Behavioral Analysis (ABA). In January 2023, New York’s Medicaid program began covering ABA services for eligible members under the age of 21. The Budget ensures the viability and integrity of the ABA benefit by aligning with the national Behavior Analyst Certification Board’s direct supervision rules and adjusting reimbursement methodologies so that ABA providers are compensated equitably with their experience.
Allow Paramedics to Administer Buprenorphine. In order to more effectively combat opioid use disorders, the Budget includes legislation allowing paramedics to administer buprenorphine.
Allow Practitioners to Dispense a Three-Day Supply of Opioid Use Disorder Medication.
Governor Hochul will introduce legislation to more fully align with Federal regulations by allowing all hospitals, including those with a full-time pharmacy, to dispense a 3-day supply of medications.
OASAS: Allocates $10 million as part of a five-year $50 million investment to upgrade OASAS’s data collection, reporting, and information technology systems, to ‘utilize additional performance metrics, decrease administrative burden on providers, and meet the needs of the growing system of substance use disorder services.’
OASAS: $5 million in annual funding to support increased IT costs and other incremental improvements to OASAS’ systems.
OASAS: $11.4 million to reprocure vocational, job placement, and day services for those with substance use disorders with an eye towards efficient and effective use of these funds and statewide availability of these services.
OASAS: $2.5 million to expand the number of Mobile Medication Units (MMUs) that provide medication and other clinical services to those with opioid use disorders.
OASAS: $500,000 in one-time funds to conduct an analysis of the twelve State-operated Addiction Treatment Centers (ATCs) to ensure communities in which they are located receive maximum benefit from availability of these programs and services.
OASAS: The FY 2026 Executive Budget includes $300,000 in annual funding to provide technical assistance to Opioid Treatment Programs (OTPs) throughout the State through creation of MAT Technical Assistance Center.
Adds $3M to the OASAS budget for expansion of street outreach teams, including integration with OMH’s Safe Options Support (SOS) teams in high need areas.
OMH: Exec Budget adds $2.8M for OMH to add street medicine and street psychiatry to Safe Options Support (SOS) teams across the state.
OASAS: Adds $3 million to OASAS for additional staff and operating costs.
Managed Care Organization (MCO) Tax
In December 2024, the State secured CMS approval to implement a new Managed Care Organization (MCO) tax to leverage additional Federal resources.
The Budget will include language to codify the structure of the proposed tax and establish a plan for spending tax receipts over the next three (3) years however the Financial Plan assumes only two years of MCO tax revenue, totaling $3.7 billion in net State Share benefit. The FY 2026 Budget includes $1.4 billion State-share, which represents the first-year installment of targeted investments, including:
• $500 million to support the remaining Global Cap deficits, to ensure that the State does not need to make significant provider reimbursement or service reductions;
• $305 million to support investment in hospitals, including increases to hospital outpatient rates, support for new investments in hospital quality, continued support for the hospital maternal quality
programs, and additional assistance to critical access and sole community hospitals;
• $300 million to expand operating support under the Safety Net Transformation Program to ensure that resources are available to support additional transformative projects;
• $200 million for investment in nursing homes, assisted living programs, and hospice programs;
• $50 million to support an increase in the Medicaid physician fee schedule to bring Medicaid reimbursement closer to the Medicare level;
• $50 million to continue funding for the Mainstream Medicaid Managed Care Quality Program; and
• $10 million to support enhanced rates for Federally Qualified Health Centers and D&TCs in the first year of funding. This includes both FQs and D&TCs.
Additional proposals of interest:
Advance Health Equity for Justice-Involved Youth
To ensure a smooth transition back into the community for incarcerated juveniles, the Budget will expand Medicaid coverage to provide pre- and post-release services for juveniles in carceral settings under 21 years of age and up to 26 for those formerly in foster care. Eligible young people will receive targeted case management services, including physical and behavioral health screenings and diagnostic services to help bridge the coverage gaps related to re-entry.
Discontinue Prescriber Prevails The Budget removes the prescriber prevails provision, which mandates that Medicaid approve prior authorization for a prescription drug, regardless of whether the clinical criteria are met.
Update and Improve Network Adequacy Requirements (for plans purchased through NY’s Marketplace)
The Budget provides funding for the Department of Health to undertake a comprehensive review of New York’s network adequacy standards, including considering regional variations, and increased enforcement of plan compliance through monitoring and penalties. This will ensure that consumers enrolling through the Marketplace have meaningful and timely access to the healthcare providers they need.
Establish Hospital-Based Peer Bridger Services and Expand INSET. New York will commit $4 million to create a hospital-based peer bridger program and fund expansion of Intensive and Sustained Engagement Teams (INSET). Research has shown that peers with lived experience are effective in engaging individuals with mental illness and can help service recipients manage crucial transitions of care. The hospital-based peer bridger program will operate in Article 28 hospitals and help facilitate the transition of individuals leaving inpatient care and transitioning back into the community. INSET provides voluntary, peer-led support to individuals on their recovery journey via 24/7 multidisciplinary teams, led by peer specialists, which offer trauma-informed, culturally responsive care tailored to individuals’ unique needs.
OMH: Expand Teen Mental Health First Aid for High School Students. OMH will utilize a new $1.5M investment to expand its teen Mental Health First Aid (tMHFA) training. Specifically, these funds will be used to train both teens and adults who work with teens to identify, understand, and respond to signs of mental health and substance use challenges, including the
impacts of bullying and school violence.
OMH: Improve Maternal Mental Health. The FY 2026 Executive Budget provides $1.5 million to expand maternal mental health services. OMH will integrate behavioral health services into OB-GYN practices in underserved communities, ensuring accessible and comprehensive care for mothers.
OMH: Create Comprehensive Clinical Assessment Hubs. The FY 2026 Executive Budget supports the creation of clinical assessment hubs staffed by multidisciplinary clinicians with an investment of approximately $1 million. These hubs will provide specialized evaluations for children with complex behavioral and clinical needs, ensuring accurate diagnoses and connecting them to individualized services without requiring hospitalization.
OMH: Expand Clubhouses and Youth Safe Spaces. The FY 2026 Executive Budget commits $10 million to establish up to seven new clubhouses and four Youth Safe Spaces across New York State. Clubhouses are member-driven programs that provide individuals with serious mental health conditions access to social support, life skills training, employment resources, and a sense of community. Youth Safe Spaces provide a place for young people to access behavioral health wellness resources, foster positive relationships with their peers, and receive support in a comfortable setting, alongside friends and community members. support, life skills training, employment resources, and a sense of community. Youth Safe Spaces provide a place for young people to access behavioral health wellness resources, foster positive relationships with their peers, and receive support in a comfortable setting, alongside friends and community members.
Budget also proposes to spend $160 million to create a 100-bed forensic inpatient psychiatric facility on Wards Island