March 14, 2025

The following letter was just sent to the Governor’s Office and to leaders at the Division of Budget.  This continues our request for a set aside of resources from the MCO Tax that CMS said NYS could implement in December 2024, and that is a topic of much discussion here in Albany as lawmakers continue to engage in budget negotiations.  A similar letter will go to leaders in the Assembly and the Senate shortly.

As we have previously noted, it is likely the state will implement the Tax to fill holes and deliver on promises to certain provider groups that were already included on the list of provider types that would benefit from the proceeds of the Tax.  As we noted earlier this week both the Assembly and Senate one house bills propose to expand the list of provider types that would benefit from these funds, but they leave out community-based behavioral health organizations.   

It is unclear how the Trump Administration will handle loopholes in federal law that currently allow states to maximize Medicaid matching funds through vehicles such as the Tax.  In the past NYS has implemented other ‘provider taxes’ on hospitals and others, in order to generate funds that it then uses to leverage additional federal dollars. In this instance, the Tax is on MCOs and is based on the number of beneficiaries they manage in the state’s Medicaid managed care program.

(Note: In the case of the MCO Tax and other ‘provider taxes’, you may note that the language used in these discussions includes MCOs in the definition of ‘providers’.)

Stand by for calls to action.  

Dear Governor Hochul, 

Enclosed is a letter from InUnity Alliance, the NYS Council for Community Behavioral Healthcare, and the Coalition of Medication-Assisted Treatment Providers and Advocates of New York State (COMPA) highlighting the importance of including substance use disorder and mental health services in MCO tax reinvestments for the FY2026 budget. The investment will help operationalize the state’s efforts to transform access to substance use disorder and mental health services and mitigate the impacts of potential federal funding reductions. 

Sarah DuVall, Policy Center Director, InUnity Alliance
Lauri Cole, Executive Director, NYS Council for Community Behavioral Healthcare
Allegra Schorr, President, COMPA