January 21, 2025

Below please find a full summary review of all Health and Mental Hygiene (OASAS, OMH and OPWDD) proposals that are embedded in the Article VII budget bills released earlier today from our government relations partners, RM&S.  Linked please see more re: the Human Services Inflationary Increase we told you about earlier.  More to follow in the days to come. 

January 21, 2025
Governor Hochul Releases Executive Budget for SFY 2026 Focused on Affordability & Public Safety

Today, Governor Kathy Hochul released her SFY 2026 Executive Budget totaling $252 billion, an increase in spending by 3.6% from the current year budget. The spending proposal for the 2025-26 fiscal year would enact the Governor’s Affordability Agenda for which she outlined the vision during her State of the State Address last week.

Below please find an outline of the proposals contained in the Governor Health/Mental Hygiene Article VII budget bill:

Part A, Medicaid Global Spending Cap: Extends the global spending cap one year through 2026-27.

Part B, Health-Related Program Extenders: Extends a number of health/human services related programs including the Foster Family Care Demo Programs through 12/31/27, 

Part C, Prescriber Prevails: Proposes to eliminate prescriber prevails in Medicaid.  The program would have to consider additional information related to coverage, but the program’s determination would be final.

Part D, Hospital Reforms: Proposes to reduce by $130.4 million annually voluntary upper payment limit (UPL) payments to hospitals and revise the Indigent Care Pool (ICP) for public hospitals in NYC operated by Health and Hospitals.

Part E, Managed Care:

• Proposes to exclude Medical Services including emergency medical services from the IDR process under the Medicaid program;
• Moves long-term nursing home care out of the Medicaid managed care benefit to Fee-for-Service; and 
• Authorizes the Commissioner of Health to penalize Medicaid managed care plans for failure to meet the contractual obligations and performance standards of the state contract. Penalties shall range from $250-$25,000 per violation and the Commissioner may elect to impose penalties as a set off against payment due to the plan.  Penalties shall be paid out of the administrative costs and profits of the plan and penalties cannot not be passed on to providers or subcontractors. A violation would include a plan failing to act as required under the state contract in place at the time, or applicable federal or state statutes, rules or regulations governing managed care plans.

Part F, Managed Care Organization (MCO) Tax: Includes language to codify the structure of the CMS-approved tax and establish a plan for spending tax receipts over the next three years. The Financial Plan only assumes two years of MCO tax revenue, totaling $3.7 billion in net State Share benefit. The FY 2026 Budget includes $1.4 billion State-share, which represents the first-year installment of investments.  The Article VII bill includes “up to” language for how the funds are allocated to each sector.  Below is the schedule for how funds are proposed to be spent in year 1:• $500 million to support the remaining Global Cap deficits, to ensure that the State does not need to make significant provider reimbursement or service reductions; • $305 million to support investment in hospitals, including increases to hospital outpatient rates, support for new investments in hospital quality, continued support for the hospital maternal quality programs, and additional assistance to critical access and sole community hospitals; • $300 million to expand operating support under the Safety Net Transformation Program to ensure that resources are available to support additional transformative projects; • $200 million for investment in nursing homes, assisted living programs, and hospice programs; • $50 million to support an increase in the Medicaid physician fee schedule to bring Medicaid reimbursement closer to the Medicare level; • $50 million to continue funding for the Mainstream Medicaid Managed Care Quality Program; and • $10 million to support enhanced rates for clinics and Federally Qualified Health Centers and D&TCs.

Part G, Excess Physician’s Medical Malpractice: Extends the program through June 30, 2026 and proposes a restructuring of the program from one annual payment to two installment payments over two fiscal years. 

Part H, Discontinuing Certain NYSDOH Programs: Proposes to discontinue  the Enhanced Quality of Adult Living (EQUAL) program, the Tick-Borne Disease program, the Empire Clinical Research Investigator (ECRIP) program and the Enriched Housing program.

Part I, Electronic Death Registration System (EDRS): Proposes to eliminate the required $20 program fee.
Part J, Statewide Health Care Facility Transformation III and IV Program: Makes a technical change clarifying the date when $450 million in projects under the III program were awarded in IV to 2/28/23.
Part K, Temporary Operator Statute:  Authorizes the Commissioner of Health to place a Temporary Operator in a hospital or adult care facility in certain circumstances including serious financial instability.

Part L, Medical Debt Consent Law: Retains the requirement for separate consents for non-emergency treatment and payment but proposes to remove the requirement from the 2024 law that patients must receive the service before consenting to pay.

Part M, Hospital Community Benefit Spending: Requires hospitals to annually report how their community benefit expenses are spent and how the expenses support the priorities of the State.

Part N, Expand Spinal Cord Injury Research Program: Expands the program to include further research on treatment of and potential cures for spinal injuries. It would also support education and research into quality of life improvements for those impacted.

Part O, Opioid-Related Proposals: Updates the state’s controlled substance schedules to align with those of the DEA; Authorizes EMTs to administer buprenorphine to relieve acute withdrawal symptoms; and Permits providers to distribute a 3-day support of buprenorphine. Also removes stigmatizing language in various sections of law replacing “an addict or habitual user” with a person with a substance use disorder.”

Part P, Reproductive Health: Would require that hospitals provide abortion care to patients in emergency situations when necessary to stabilize the patient, and the patient consents to such services; and Authorizes prescribing practitioners to request that their name be replaced with the prescribing health care facility’s name/ address on a prescription label for abortion medications.

Part Q, Access to Infertility Treatments: Would provide Medicaid coverage for standard fertility preservation services and costs of storage of oocytes or sperm for individuals with iatrogenic infertility who are enrolled in Medicaid. Additionally, the proposal would allow the Commissioner of Health to establish a program to provide health care providers with grants to improve access to health care services that provide the full range of care for infertility. 

Part R, Access to EMS: Requires the Statewide EMS Council and the Department of Health to develop a Statewide Comprehensive Emergency Medical System Plan, which will be refined by the creation of individual county EMS plans; Designates EMS as an essential service, requiring all municipalities to provide adequate EMS response capacity to meet community needs, excluding NYC; and  Authorizes the Commissioner of Health to approve and deploy EMS demonstration programs to promote innovation in the delivery of EMS services, and test novel delivery methods developed by agencies and practitioners.

Part S, Health Care Transactions: Would establish additional reporting of information relating to proposed and closed material transactions and impose a fee on involved parties to cover review costs.
Part T, Sexual Assault Forensic Examiners (SAFE): Requires hospitals to ensure staffing of SAFE 24 hours/day, 365 days/year; Expands the definition of “rape survivor” to be inclusive of all.
Part U, Digitize Genealogical Records: To streamline operations and clear the backlog of vital records requests.

Part V, Scope of Practice Changes: Proposes the following:

• Certified Medication Aides: Would allow certified medication aides in residential healthcare facilities to administer routine medications under the supervision of a registered nurse.
• Pharmacist Vaccinations:  Would codify the federal PREP Act authorization for pharmacists to give COVID-19 vaccine to children age 2 and older.
• Pharmacist Cessation: Would authorize a pharmacist to order medications to treat nicotine dependence approved by the FDA for smoking cessation.
• Pharmacy Technician Vaccinations: Would codify the federal PREP Act authorization for registered pharmacy technicians to give all vaccines that pharmacists may administer under the supervision of a pharmacist, if they meet training requirements etc.  Note, this applies to registered techs in NYS which currently are only those practicing at Article 28 hospitals/practices. 
• Medical Assistant Vaccinations: Would authorize a medical assistant under the supervision of a physician or PA to give vaccinations.
• Expanded Physician Assistant Scope of Practice: Authorizes physician assistants to practice independently, removing physician supervision requirements for those that meet certain criteria: PAs who have practiced for more than 8,000 hours who are practicing in primary care or are employed by an Article 28 health system. This provision would be effective through December 31, 2025.
• Transfer Oversight: Proposes to transfer authority to define, license, and oversee physicians, physician assistants and specialist assistants to the Department of Health from the State Education Department.

Part W, Nurse Licensure Compacts: Would allow NYS to enter into the Interstate Medical Nurse Licensure Compact for RNs and LPNs.

Part X, Dental Care:  Expands the scope of practice of dental hygienists through collaborative practice with a dentist to authorize them to handle additional procedures currently within the exclusive scope of dentists.
Part Y, Hospital at Home: Subject to federal financial participation, proposes to allow hospitals to provide off-site acute care medical services, provided by a physician, registered nurses, NP or PA to a patient with a preexisting clinical relationship with the hospital or clinician, for patients with acute medical needs at their residence. The Department of Health would be authorized to establish Medicaid rates for such services.
Part Z, Preferred Source Program: Would make the program permanent with a stated goal of helping to promote integrated employment for individuals with disabilities.
Part AA, OMH, OASAS, OPWDD Demo Programs:  Would make permanent the authority of OMH, OASAS and OPWDD to utilize flexibilities to develop new methods of services through demonstration programs.
Part BB, OMH, OPWDD Temporary Operators: Would allow OMH and OPWDD the permanent authority to appoint temporary operators to ensure a program’s viability.
Part CC, OPWDD Managed Care: Preserves the statutory authority and flexibility of OPWDD to implement managed long-term care plans through December 31, 2027 if it elects to do so.
Part DD, Homeless Youth: Would allow runaway and homeless youth to receive outpatient and inpatient behavioral health services without parental consent.
Part EE, Involuntary Commitment and Assisted Outpatient Treatment (AOT): Would amend the involuntary commitment standards in existing law to clarify the circumstances when a person with mental illness may be committed; Permits psychiatric nurse practitioners to make one of the necessary commitment certifications and requires clinicians to consider certain factors; Amends Kendra’s Law to allow an individual’s domestic partner to request AOT and updates the standards for re-entry into the program after an order expires; Upon admission to a hospital or received as a patient in a comprehensive psychiatric emergency program, the hospital or program shall make reasonable efforts to identify and promptly notify any community provider of mental health services that maintains the client on its caseload, and such provider shall be notified and included in discharge planning.
Part FF, Human Services Inflationary Increase: Proposes a 2.1% targeted inflationary increase for 4/1/25-3/31/26. Certain programs under OMH, OASAS, OPWDD, OTDA, OCFS and the Office for the Aging are eligible for the increase.  See OMH and OASAS program summary attached. Each local government unit or direct contract provider receiving the funding would be required to submit a written certification attesting how the funding will be used to first promote the recruitment and retention of support staff, direct care staff, clinical staff, non-executive administrative staff, or respond to other critical non-personal services costs prior to supporting any salary increases or other compensation for executive level job titles.

General Budget Updates
The Executive Budget proposes to extend until 2032, a 10.9% tax on the highest earners in our State (those earning $25 million or more), first enacted in 2020 and set to expire this year. The Governor has already announced a $3 billion rebate check ranging from $300-$500 for those making up to $300,000 and the budget released today includes a middle class tax cut for joint filers making $323,000 or less, a child care tax credit capped at $1000 and free breakfast and lunch for public schoolchildren.

The Governor’s budget does not include any contingency measures if President Trump and the Congress move to reduce funding to New York and other states.  It does not include new funding for migrant support services given the actions that the new President has committed to taking. The Governor has also said that there will need to be negotiations between herself, the Legislature and the MTA on a plan due April 1st to address the estimated $33 billion hole in the MTA’s capital plan.

Finally, the Governor is proposing to provide $13.5 million for schools to enact a cellphone ban starting next fall, $37.4 billion in direct aid for schools (a $1.7 billion increase from the current year) and $35.6 billion in state spending for Medicaid (a 14% increase overall) including proceeds from the recently CMS-approved MCO tax expected to garner $3.7 billion in net state-share benefit over two years.

We expect the Legislature to release its joint budget hearings schedule this week as part of the ten-week budget negotiations process to reach a final agreement by April 1, 2025, the constitutional deadline for when a new budget is to be put in place for SFY 2026.
Please let us know if you have any questions. More updates to follow.