February 1, 2023

Here’s an outline of key proposals of interest in the Health and Mental Hygiene Article VII budget bill for SFY 2024 released by Governor Hochul today.  The Governor’s overall budget totals $227 billion.

We will do a deeper dive on proposals for our broader HMH update and will also be looking into the OMH and OASAS budget in the Appropriations bill for funding areas of interest, among the other budget bills.  

More updates to come.

February 1, 2023HMH Article VII Executive Budget Bill A3007 / S4007 Areas of Interest:

• Part A: Extends the Medicaid Global Spending Cap one year through SFY 2025.
• Part C: Reauthorizes HCRA funding three years through March 31, 2026.
• Part D: Medicaid pharmacy changes including eliminating prescriber prevails and permit DOH to modify the list of OTC drugs that are covered by Medicaid.
• Part E: Hospital related proposals including reducing Indigent Care Pool funding by $42.7M, increasing inpatient hospital rates by 5% to offset revenue losses from 340B due to pharmacy benefit transition, expand VAPAP eligibility to providers formed as a DSRIP PPS, and requiring a public community forum be held at least 30 days before application for Rural Emergency Hospital designation and that the hospital notify OMH and OASAS of inpatient psych beds or substance abuse treatment programs in the facility prior to the forum.
• Part H: Expand Essential Plan eligibility to include individuals up to 250% of FPL, allows pregnant women to stay in Plan through one year post-partum, delays implementation of Medicaid coverage expansion for undocumented individuals over age 64, to align with section 1332 waiver expansion proposal.  Establishes the State Innovation Program fund for monies from approved 1332 waiver.
• Part J: Includes a series of managed care program reforms including requirements for plans to pay for emergency services including resultant inpatient admissions before reviewing the claims for medical necessity by creating a new review process between hospitals and insurers, and eliminating prospective denials for medically necessary services.
• Part K: Expands eligibility for certain Medicaid services to incarcerated persons in institutions of mental disease (IMDs), which aligns with the 1115 New York Health Equity Reform (NYHER) waiver amendment.
• Part M: Strengthens the review of applicants seeking to become hospitals, nursing homes, D&TCs and other licensed facilities.  Provides for review and oversight of material transactions by investor-backed entities.
• Part O: Bans the sale of all flavored tobacco products and strengthens enforcement.
• Part P: Creates a new $1 billion Statewide Healthcare Facility Transformation Program V to fund capital projects for eligible providers (hospitals, residential healthcare facilities, adult care facilities, D&TCs, clinics under mental hygiene law, children’s residential treatment facilities, assisted living programs, article 31 and 32 behavioral health facilities, home care providers, primary care providers, hospice, community based programs under OMH, OASAS, OPWDD or local government units, independent practice organizations and residential facilities or day program facilities under article 16 of MH law).  Up to $500M would be for eligible providers in support of projects which promote innovative, patient-centered models, increased access to care, improve quality and provider financial sustainability. Up to $500M would go towards health care providers for the implementation of improvement for information technologies and telehealth capacity.
• Part Q: Provides Medicaid reimbursement for community health workers for services with high risk populations and for licensed mental health counselors, licensed marriage and family therapists, and licensed social workers who provide services in clinics including community health centers.
• Part W: Includes expanded scope of practice including removing physician supervision of physician assistants practicing in primary care/ employed by a health system. Also pharmacists would be authorized to prescribe and order opioid antagonists (naloxone and other medications approved by DOH).  Authorizes NYS to join the Interstate Medical Licensure Compact and the Nurse Licensure Compact.
• Part X: Requires nurse staffing agencies to register and report key data about their operations.
• Part Y: Includes new protections for consumers related to medical debt including education for consumers and requiring hospitals to use a uniform application for financial assistance. Creates the Prescription Drug Price and Supply Chain Transparency Act and establishes guaranty fund coverage for insurers writing health insurance.
• Part AA: Requires HCV screening to be offered to all who receive inpatient/outpatient services in an article 28 and required offering by health providers to all individuals 18 and older as part of routine medical care. 
• Part BB:  Updates the controlled substance schedules in New York State for additional Fentanyl analogs. Includes harsher punishments for selling imitation controlled substances.
• Part CC: Transfers oversight of licensed health and mental health professions from NYSED to DOH.
• Part DD:  Establishes a one year COLA for fiscal year 2023-24 at a rate of 2.5% to eligible human services programs. The 2.5% COLA for OMH, OASAS and OPWDD providers would cost a total of $188.6 million.
• Part GG:  Creates a new “Qualified Mental Health Associate” credential for paraprofessionals providing services under the Office of Mental Health. Duties would include counseling and support services.
• Part HH:  Allows for Community Behavioral Health Clinics to be jointly licensed by both OMH and OASAS rather than needing an independent license from each. Also establishes an Indigent Care Program for Certified Community Behavioral Health Clinics to provide state funding to certain providers that lose funds from providing uncompensated care due to federal requirements on and after 7/1/23 through June 30, 2026 with annual appropriations of “up to” $22.5M the first year and $41,250,000 second year, $45M in the third year, amounts contingent on federal participation. 
• Part II: Includes a series of insurance reforms focused on behavioral health services (see summary of proposal by subparts below).
• Part JJ: Authorizes the Commissioner of OMH to develop a schedule of sanctions on hospitals/ providers who fail to comply with applicable laws or terms of their operating certificates. The stated goal is to create incentives for providers to bring needed inpatient psychiatric beds online quickly.  Increases maximum sanction amounts from $1000 to $2000/per day.

Summary of Part II: Insurance Reforms Improving Access to Behavioral Health ServicesSubpart A (effective to policies issued, modified, renewed after January 1, 2024): 

• Expands state-regulated commercial insurance coverage of sub-acute care in a medically-monitored residential facility under OMH, outpatient care provided by crisis stabilization centers and outpatient care provided by a mobile crisis intervention services provider, critical time intervention services and assertive community treatment services, as defined in proposal.  Coverage for mobile crisis intervention services shall not be subject to preauthorization and is to be covered regardless of whether the provider is in-network. If provided out of network, insurer shall not impose any administrative requirements or limitations on coverage.  The insured’s copayment/coinsurance shall be the same as in-network.
• School-Based Mental Health Clinics: Requires an insurer to provide reimbursement for covered outpatient care when provided by a school-based mental health clinic licensed under article 31, regardless of whether it is in-network. Reimbursement shall be negotiated or in the absence of a negotiated rate, an amount no less than the rate that would be paid for such services under Medicaid as payment in full. Insured shall only be required to pay in-network copay or coinsurance.

Subpart B (effective one year after enactment)

• Prohibits insurers from performing preauthorization or concurrent reviews for the first 30 days of mental health treatment for adults in an in-network inpatient hospital or crisis residence licensed or operated by OMH, except where the insured meets designated clinical criteria or is receiving care in a facility designated by OMH in consultation with DFS and DOH. Requires utilization review determinations for mental health conditions to be made using evidence-based, age appropriate clinical review criteria approved by OMH in consultation with DFS and DOH.

Subpart C (effective upon enactment)

• Requires state-regulated commercial insurance coverage for services provided via telehealth by article 31, 32, 26 and 16 of mental hygiene law providers, reimbursed at the same rate as is reimbursed when delivered in person.

Subpart D (effective upon enactment)

• Authorizes insureds to bring legal actions to address state law parity violations.

Subpart E(effective upon enactment and applied to policies issued, modified, renewed after that date)

• Assures state-regulated commercial insurance coverage for detox or maintenance treatment of SUDs including all buprenorphine products, methadone, long acting injectable naltrexone or medications for opioid overdose reversal, without prior authorization for initial or renewal of such treatments.

Subpart F (effective upon enactment)

• Requires DFS and DOH, in consultation with OMH and OASAS to promulgate regulations regarding provider network access standards specific to behavioral health services including: ensuring that insureds have timely and proximate access, appointment availability standards including timeframes for initial and follow up visits, time and distance standards, availability of telehealth, and the responsibilities of an insurer/MC plan to provide out of network referrals at the in-network cost sharing where there are no in-network providers meeting the standards. Where an out of network provider is a facility licensed/operated by OMH or OASAS, the insurer/ MC plan shall reimburse at a negotiated rate.  In the absence of a negotiated rate, an amount no less than the Medicaid rate would be paid. 

Let us know if you have any questions.

Marcy Savage

Reid, McNally & Savage, LLC