Executive Budget Proposals: More Information

January 21, 2022

Here’s a run down of where we stand relative to several NYS Council high priority budget executive requests that goes beyond some of the summaries we sent to members recently:

Outpatient Clinic Rate Reform Advocacy

OMH: In 2021, the OMH Outpatient Clinic received CMS approval to move from the (federal) ”Clinic Option’ to the (federal) ‘Rehab Option’. As such, the OMH Clinic became eligible for a drawdown of federal funds resulting from American Rescue Plan (ARPA) enhanced FMAP funds. We expect a Notice in the New York State Register on January 26 that describes the re-classification of the OMH Clinic to the ‘Rehab option’. In addition, the Notice will offer details regarding the resulting increases for OMH Outpatient Clinics. All of this should result in an 5% or so increase for OMH Outpatient Clinics, assuming anticipated approvals. This rate increase is expected to be permanent, thanks in large part to the funds the NYS Council advocated for that are being reinvested with OMH and OASAS.

OASAS: The OASAS Freestanding Outpatient Clinic was already categorized under the federal ‘Rehab Option’ when eFMAP funds began flowing. OASAS Clinic providers had previously been notified of additional outpatient funds to be distributed across all providers, pending SPA approval. Here is what the funding looks like:

  • OASAS Freestanding Clinics can expect a distribution of $15M that is going out to impacted providers as Workforce Funds that can be used liberally (this is temporary funding). Details to follow.
  • An additional $6-10M to enhance ‘in community’ services reimbursement rates provided by OASAS Freestanding Clinics (intended to be permanent).

OASAS & OMH COLA: In addition to the funding discussed above, the 5.4% COLA that is proposed for OASAS and OMH agencies in the SFY 2023 executive budget proposal (if enacted as written) will further enhance Outpatient Clinic rates. The 5.4% COLA rate increase will be added to base rates and is permanent.

*Finally, the proposed employee bonuses included in the executive budget proposal for both workforces (up to $3,000/employee based on time on the job and hours worked for employees paid up to $100k/year) will also help Clinics to retain existing staff.

Unfortunately I am less clear about the total % that will go to each OASAS Freestanding Outpatient Clinic due to the way the eFMAP money is being distributed, I am working to obtain more details. For OMH Clinics, it appears the end result of the proposals (discussed above) could be a permanent rate increase in the range of 10.4%.

Again, all of this relies on pending federal approvals and an enacted state budget that includes the proposals discussed above. Please do not use this information to make budget decisions – it’s early in the game.


APG Government Rates Proposed through 2027

Yes, it’s true! The Governor’s executive budget proposal includes a provision that would extend APG government rates through 2027. We will need to work to protect this proposal as we do all proposals where insurers make claims that somehow paying APG government rates costs them extra money. The truth is that APG government rates are paid by the state and passed through insurers to providers. And the real problem is the failure by insurers to pay ALL rates in a timely manner and in full.

Procurement Proposal (see attached document for language)

Proposal to move NYS from an ‘application’ process to a ‘procurement’ (competitive) process when identifying MCOs that participate in our (and other) carve-in’s of services for Medicaid beneficiaries:

I have attached executive budget language that discusses the proposed change that (if enacted) would result in the state employing a competitive process to determine MCOs that participate in carve-in’s across the Medicaid managed care landscape (not just the HARP carve-in). A related section of executive budget language would reduce the number of MCOs in each region of the state. This proposal has drawn immediate fire from the Health Plan Association’s CEO Eric Linzer who erroneously made claims in a recent Crain’s Health Plus article that this change would harm consumers. We believe that any change that results in provider organizations freeing up scarce resources that can be re-dedicated to ensuring adequate access to care and improving quality is a good idea! Reducing administrative burdens and an improved commitment by the state to ensure the MCOs that participate in our carve-in are able to meet all requirements is a good thing.

Workforce Proposal: Bonuses


The legislation establishes a healthcare and mental hygiene workforce bonus for workers making less than $100,000 full time, part time, salaried, hourly, temporary or independent contractor.

How Much

Bonuses shall not exceed $3,000 based upon total numbers of hours paid during two vesting periods:

  • No employees vesting period may begin later than 3/31/23 and in total both vesting periods may not exceed one year in duration
  • 20 hours per week = $500 per vesting period
  • 30 hours per week but less than 37 hours = $1,000 per vesting period
  • 37.5 hours per week = $1500 per vesting period

Bonuses will be limited to $3,000 per employee and are not subject to state or local income tax.

Employer Eligibility

An employer must employ at least one employee under Medicaid. If an employer is not subject to a certificate of need as a condition of their license, 20% of the provider’s patients must be served under Medicaid.

Employer Obligations

  • Track the number of hours that employees work during the vesting period
  • Submit claims for reimbursement of employee bonus payments
  • In determining eligibility the employer shall use payroll records from calendar year 2021
  • Make payroll records available upon request regarding employee eligibility
  • Maintain contemporaneous records for all tracking to substantiate claims for no less than six years and furnish upon request state and federal authorities
  • Pay workers per a schedule issued by DOH based upon hours worked during a vesting period (see rates of payment in how much above not to exceed $3000)
  • Bonus payments to employees must be made with 30 days within payment to employer
  • No Bonus dollars may be used to reduce compensation or payments made pursuant to a collectively bargained agreement
  • No portion or bonus payments shall be payable to any person suspended or excluded from the Medicaid program during the vesting program
  • The Office of Medicaid Inspector General audits and may recover overpayments and impose sanctions up to and over exclusion from the Medicaid program: i) an employer claims a bonus not due an employee; (ii) if an employer receives the bonus and fails to pay any part of the bonus to the employee or (iii) an employer fails to claim a bonus that is due for an employee
  • Additional penalties shall be imposed on an employer if they fail to claim or pay any bonuses for 10% of their employees
  • Employers shall continue to be liable for the bonuses regardless of recovery , sanction or penalty of the Office of Medicaid Inspector General
  • Inappropriately paid bonuses may be recovered by the employer
  • Office of Medicaid Inspector General sanctions may also apply to any affiliates of an employer

While not included in the HMH Budget language, the State Budget Director in his post budget release press conference on January 18th said that an employee can only receive one bonus from one employer. The Budget language does not address this issue.