Budget Bills Have Posted

January 16, 2024

Good afternoon,

Budget bills are now posted online here:  https://www.budget.ny.gov/

Now we go to work!  Stand by.

In the meantime:

1) As you know, the NYS Council is working with a small group of advocacy associations to ensure the eventual passage of an OMIG Audit Reform bill.  Today, the bill being sponsored by Assembly Health Chair Amy Paulin was put up online.  The bill has several important changes that reflect feedback we have received over the many months we have been meeting with the Executive, with OMIG leads, legislative leaders and the ‘central staff’ who work for the Speaker and Majority Leader.  Take a look at the amended bill by going to our website at: www.nyscouncil.org or just open the document (attached).  Note:  Senator Pete Harckham will again sponsor a ‘same as’ OMIG Audit Reform bill in the Senate.  We are waiting for the bill to be introduced.  Onward!

2) The NYS Council was quoted again today in Crain’s Health Pulse (CHP) (below) – this time on the recent approval of the SUD portion of the NYS IMD Waiver.  We’ve had a good run lately, appearing in CHP a total of 4 times since August – twice on our MMC carve out request, more recently on commercial rate parity, and today re:  the IMD approval that will expand access to care for New Yorkers seeking residential and other addiction treatment services.

State’s $7.5B Medicaid waiver unlocks millions for residential addiction treatment


The federal government’s decision to greenlight New York’s $7.5 billion Medicaid waiver last week opens up a surge of public money for safety-net hospitals and social services like housing and transportation.

But the waiver also unlocks a total of $66 million in federal funds for residential addiction treatment over the three-year demonstration project, undoing a decades-old policy that limited officials to solely using the state’s share of Medicaid funds to pay for substance use treatment in residential settings.

Since the start of the Medicaid program, states have been prohibited from using federal matching funds to reimburse Institutions for Mental Diseases — hospitals, nursing facilities or other institutions with more than 16 beds that primarily care for people with mental illnesses.

The IMD exclusion was designed to prevent states from offloading costs for psychiatric hospitals onto the federal government. Instead, it limited the funds states could put towards residential care for mental illnesses and substance use disorders, advocates say.

In December 2022, New York state Medicaid officials asked the Centers for Medicare and Medicaid Services to authorize federal matching funds to reimburse IMDs—an attempt to reduce the average length of stay at psychiatric hospitals and improve community-based treatment. Last Tuesday, CMS approved that change for facilities that provide treatment for substance use disorders. The agency did not, however, authorize the use of federal funds for severe mental illness diagnoses.

Lauri Cole, executive director of the New York State Council for Community Behavioral Healthcare, said that the substance use disorder amendment changes the “archaic” rule that prohibited federal money from funding certain behavioral health treatments, expanding access to community-based inpatient rehab care, withdrawal and stabilization services and residential treatment.

“At a time when the ongoing overdose epidemic continues to claim the lives of so many New Yorkers, increased access to care is a game-changer and absolutely essential,” Cole told Crain’s.

Another key difference, Cole said, is that the waiver will allow providers who offer residential addiction treatment to bill under Medicaid fee-for-service — not only through Medicaid managed care.

“Reimbursement rates and therefore, access to care, has always been limited by what kind of insurance you have,” Cole said. Now, providers who offer residential substance use disorder services can bill for a higher portion of the Medicaid population and expand availability of care, she added.

Approximately 75% of New York state’s 7.6 million Medicaid members are enrolled through managed care plans, according to Alicia Biggs, a spokeswoman for the state Department of Health. That leaves approximately 1.9 million New Yorkers enrolled through Medicaid fee-for-service.

According to the state’s substance use implementation plan, which details the changes included in the waiver, New York contracts for nearly 99,000 adult substance use disorder treatment beds statewide, operated by 214 providers. All but 5,700 of those beds meet the definition of an IMD, meaning that 94% of beds could be eligible for additional funding.

“The nature of the population that struggles with substance use disorder is transient, in and out of Medicaid managed care,” said Rob Kent, former general counsel of both New York’s Office of Addiction Services and Supports and the federal Office of National Drug Control Policy. “Adding fee-for-service is huge.”

But on top of that, Kent added, the ability to secure federal funds for residential treatment cements funding for programs that are struggling with inadequate reimbursement rates and lacking resources in the middle of “the worst crisis we’ve ever been in.”

The changes to substance use disorder treatment payments is just one part of the state’s new Medicaid waiver. The waiver amends section 1115 of the Social Security Act — a law that enables state governments to implement pilot programs that innovate new ways to spend Medicaid money.

Other highlights of the waiver include $6 billion in total federal funding, with significant changes to reimbursements for social needs, as well as $2.2 billion for a subset of financially-distressed hospitals in the Bronx, Brooklyn, Queens and Westchester. The waiver also includes money for workforce enhancement.

The Greater New York Hospital Association and labor union 1199 SEIU applauded the changes, saying in a statement released last week that they “advocated for the waiver’s approval for more than a year.”

“However, the waiver does not change the fact that New York state continues to pay hospitals 30% less than the cost of care they provide for Medicaid patients,” GNYHA and 1199 said, calling on the governor and legislature to continue to raise Medicaid rates to cover the entirety of the cost of care.

The waiver includes a requirement for New York state to provide $199 million in provider rate increases across primary care, behavioral health and obstetrics providers. — Amanda D’Ambrosio