May 16, 2025

One for the road…Have a good weekend and thank you all for anything and everything you did this week to assist someone in need of mental health and/or addiction care.  You are amazing.

N.Y. eyes legal battle over fed-approved $3.7B tax on Medicaid insurers

By Kate Lisa

New York leaders plan to put up a legal fight to get billions of Medicaid reimbursement dollars it was promised by the federal government after President Donald Trump’s administration announced this week it plans to change a policy several states have used to generate additional money for health providers.

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How the latest House Medicaid proposal would impact New York (Reporting by Dan Clark from Capitol Confidential, 5/16)

NYS Council notes before the article:  The numbers from the Governor’s Office that were sent to the members of the NYS Congressional delegation (see below) do not provide a distinct amount for how much NY would lose if the feds close the MCO Tax loophole.  $1.4B was appropriated in the newly minted state budget however the total loss will depend on the specific terms of the final Rule, and what time of year it is implemented.  Remember: The federal budget year is different from New York’s.  Earlier this week we sent you lots of information on the CMS Proposed Rule seeking to close the loophole that allows states to increase federal revenue coming into the state anywhere from 50% to 77%.  According to CMS, these taxes generate $23.6 billion in federally matched revenue to seven states per year. California, New York, Michigan, and Massachusetts collect approximately 95% of the funds.

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Democrats have warned for months that President Donald J. Trump and Republicans in Congress would hand down massive cuts to Medicaid.

Some Republicans who represent New York in Congress, but not all, have made clear that they don’t plan to support a spending package that cuts traditional Medicaid benefits or sacrifices care for efficiency.

We didn’t know what the extent of those cuts would be, or if there would be any at all. But that changed this week.

The Energy & Commerce Committee moved part of the Republican majority’s anticipated tax bill this week after many, many hours of debate. The Congressional Budget Office estimates that the proposals would result in $625 billion less in federal spending on Medicaid.

It would also implement work requirements for certain recipients beginning in 2029 and limit how states can reap more federal Medicaid revenue through taxes — like New York’s brand spanking new MCO tax.

Gov. Kathy Hochul’s office sent data Friday to members of Congress from New York on how those changes would impact state spending and coverage for Medicaid enrollees in the Empire State.

It’s not a great picture and I compared it to what independent experts said.

Up to about 1.2 million people would be kicked off Medicaid and the Essential Plan, according to the state’s analysis, shared by the Greater New York Hospital Association.

New York would also have to spend about $2.7 billion due to changes that would require about 500,000 to shift from the Essential Plan, which is state subsidized, to Medicaid, according to the analysis.

The state would also lose about $7.5 billion due to cuts in Essential Plan tax credits.

And hospitals would lose about $1.3 billion because of lower reimbursement rates and uncompensated care.

That’s the state’s analysis. I compared those numbers to a separate analysis released Friday by KFF, a nonpartisan health research and policy organization.

They estimate that New York would see a $6 billion cut in federal Medicaid spending — not too far from New York’s estimate of $7.5 billion.

But in terms of the number of people who would no longer receive Medicaid, KFF’s data matches with New York’s. The high-end enrollment loss would be 1.2 million people, according to analysis. The low-end loss would be 741,000.

If New York wanted to plug the $6 billion hole estimated by KFF, the analysis shows that state taxes would have to increase by about 5%. But Hochul and lawmakers have already said they don’t plan to backfill the cuts.

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Message from Commissioner Cunningham to all providers:

Dear Colleagues,

I am writing to provide an important update on the federal litigation concerning supplemental block grant funding for addiction services.

As previously shared, the NYS Attorney General, along with 22 other states and the District of Columbia, filed a lawsuit on April 1, 2025, seeking an Emergency Temporary Restraining Order (TRO) and a Preliminary Injunction to prevent the federal government from terminating funding provided through the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) and the American Rescue Plan Act (ARPA). The Court issued a TRO on April 5, 2025, which was extended on April 17, 2025. The TRO remains in effect until a decision is handed down on the Preliminary Injunction.

Today, the United States District Court in Rhode Island granted the Preliminary Injunction. This decision prevents the federal government from terminating the funding while the Court considers the request for a permanent injunction. Please note: the federal government may still appeal this ruling.

Thank you for your continued commitment to supporting those seeking services through the OASAS system of care during these uncertain times. I will continue to share updates as new information becomes available.

Sincerely,

Chinazo Cunningham, MD, MS

Commissioner, NYS Office of Addiction Services and Supports

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Here’s more from a Press Release issued today by the Rhode Island Attorney General:

Rhode Island Attorney General Neronha, coalition secure preliminary injunction to halt public health grant cuts

Published on Friday, May 16, 2025

Attorney General Neronha today released the following statement after a Rhode Island court granted a preliminary injunction filed by his office and a coalition of 22 other attorneys general to stop the abrupt and illegal termination of nearly $11 billion in critical public health grants to the states.

“If we don’t have our health, we don’t have anything, and that’s why today’s preliminary injunction is such a critical win,” said Attorney General Neronha. “Earlier this week, Secretary Kennedy told Congress that doesn’t think people should take medical advice from him, and yet by overseeing an attempt to eliminate billions in critical funding for essential public health initiatives, American people will live and die by his decisions. I am grateful that this funding, which focuses on childhood vaccination and immunization, health disparities among high-risk and underserved populations, and laboratory testing capacity, among other initiatives, will again be available to our states. A hacksaw approach to government reduction will never yield positive results for the American people, and we will continue to fight, and win, in court to minimize the harm the Trump Administration is causing the people of this country.”

Attorney General Neronha co-leads this lawsuit with Attorney General Phil Weiser of Colorado, Attorney General Rob Bonta of California, Attorney General Keith Ellison of Minnesota, and Attorney General Nick Brown of Washington. They are joined by the attorneys general of Arizona, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, and Wisconsin. 

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NYS Assembly Releases Summary Of  Their Accepted Changes To The Executive Budget

This week the NYS Assembly released a summary of the changes they recommended to the Executive Budget that were accepted in the final budget that passed last week.  To view the full report please click here.  Note:  The OMH and OASAS information begins on page 49-1 and includes a look at member items that were included in the newly enacted state budget. 

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