OASAS State Aid Reductions

July 10, 2020

The NYS Council has learned from several of our members in the Finger Lakes Region that their anticipated 20% ‘withhold’ of OASAS state aid dollars to funded providers is actually a 31% ‘withhold’.  Finger Lakes providers in Chemung, Livingston and Tioga counties received this information from their LGUs on Tuesday.  I have not yet been able to confirm that this will be the percentage withheld from all funded OASAS providers.


I have spoken with funded OASAS providers in other areas of the state who have not yet received similar letters from their counties. I am in close communication with leaders at OASAS who will have more information for us later this morning.  There is speculation as to why the percentage of the ‘withhold’ for OASAS funded providers is more than anticipated but I would prefer to wait to confirm with OASAS.  

At this point, I’ve had enough conversations to report the following:


Each state agency was given a targeted amount of state aid they were required to reduce. Most state agencies anticipated a 20% or so reduction to each LGU.  State agencies and LGUs messaged this percentage.  


Due to the fact that some OASAS funded state aid contracts are actually contracts with OASAS (rather than through the LGU), the required reduction to LGUs and the reductions to providers was spread across a fewer number of agencies in total, thereby raising the % of the reduction to impacted counties and the providers they fund.  


It is our understanding there is a resolution in the works and that, at the end of the day government will be able to reduce the 31% reduction, bringing the percentage down through a variety of measures.  While the end result may not be a reduction back down to exactly 20%, we have reason to believe it will be significantly better than it is right now.

According to OASAS leads and regarding state aid reductions, there is no reason why counties need to expedite contract amendments with impacted providers in order to implement state aid ‘withholds no matter the amount.  


It’s our understanding there are many counties who are informing providers that an amendment will be necessary.  Providers are of course worried about having to wait for an extended period of time for such amendments to take place before payment.  Again, OASAS states there is no reason why a contract amendment is required in order to process the ‘withhold’ and they will address this of the Local Conference of Mental Hygiene Directors (LGU reps) during a call happening right now.


Editorial Note:  We use the term ‘withhold’ here as requested by OASAS.  However, ro providers on the ground and until the withhold is restored in full, the outcome of this action, however temporary, is a cut.   Our advocacy will reflect this ‘on the ground’ reality. 

See below responses to our questions put to OASAS leads:


Question #1.  Is the state requiring the LGU to cut equal amounts from their department, not just pass it on?


It is unclear exactly what you are asking but if it’s whether counties should reduce payments in the proportion for all programs/services including any county run…the answer is yes that is the general expectation BUT counties may deviate from that plan on consultation with the RO (which will include a justification for the deviation)


Question #2.  When we are talking about the 3rd quarter – is this in reference to the State fiscal year (I believe Jan – March) or to the calendar fiscal year (Oct – Dec)?


Allocated state aid funding agreements with most counties (outside NYC) run on a calendar year so this is the 3rd quarter.  NYC allocations run on July 1-June 30 so they are in the first quarter