January 20, 2026

Good evening,

Busy day!  

Here we go:

First, the 2026 Joint Legislative Budget Hearings Schedule is linked for your convenience.  And, here’s a link to 2026 Joint Legislative Budget Hearings sign up forms:  

https://nyassembly.gov/Press/?sec=story&story=116497

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Congress:  Bipartisan Health Bill Moving Forward

It is unclear whether the (federal) bipartisan health bill (discussed below) will make it over the finish line as fiscal conservatives continue to object to certain costs associated with several of the proposals.  Importantly, the legislation would renew Medicare Telehealth coverage for an additional two years.  

By

Michael McAuliff

January 20, 2026 12:42 PM CST, Modern Healthcare

Senior lawmakers announced a bipartisan deal Tuesday that would keep the federal government open for the rest of fiscal 2026 and enact long-sought health policies.

In addition to funding the Health and Human Services Department, the legislation features major provisions from a healthcare package that then-President-elect Donald Trump torpedoed at the end of 2024.

The measure would renew Medicare telehealth coverage for two years and hospital-at-home coverage for five years, set the stage for site-neutral Medicare reimbursements, boost pay to physicians participating in Medicare alternative payment models, and require greater transparency and flat fees from PBMs.

The bipartisan, bicameral nature of this agreement between House and Senate appropriations committee leaders suggests it could pass before the end of the month, forestalling another government shutdown, although conservative Republicans may object to the cost.

The bill includes a first step toward site-neutral Medicare payments for outpatient care by requiring health systems to create separate identification numbers for outpatient departments to enable the Centers for Medicare and Medicaid Services to track pricing in different settings.

Medicare Advantage insurers would be required to maintain accurate provide lists and patients who visit providers erroneously included would only have to pay in-network rates. The bill doesn’t include limits on Medicare Advantage prior authorizations that were part of similar packages in the past.

The package does not address the enhanced subsidies for health insurance exchange plans that expired at the end of 2025 nor begin overhauling the Medicare physician reimbursement system.

And with the exception of the PBM policies Congress has come close to passing for several years, there are no elements from Trump’s “Great Healthcare Plan,” such as expanded health savings accounts.

The bill appropriates $116.8 billion to HHS through the rest of the fiscal year ending Sept. 30, which is a $210 million increase in discretionary spending and $33 billion more than Trump requested.

• Allocating $4.6 billion to community health centers through the end of 2026
• Delaying cuts to Medicaid disproportionate share hospital payments to safety-net hospitals until 2029
• Extending add-on payments low-volume and Medicare-dependent hospitals, Medicare geographic payment adjustments for doctors, and ambulance payments through the end of the year
• Restoring a 3.1% bonus for alternative Medicare payment models that expired in 2024 for one year
• Allowing hospitals to delay reclassifications that could impact Medicare pay until the end of the year
• Extending numerous disease treatment efforts and grant programs
• Extending in-home cardiopulmonary rehabilitation flexibilities through 2027
• Tightening rules to spot fraud with durable medical equipment under Medicare
• Funding graduate medical education programs through 2029
• Funding the National Health Service Corps through 2026
• Boosting the funding formula for the World Trade Center Health Program
• Extending special diabetes programs though 2026
• Extending public health preparedness programs through 2026
• Signaling Congress’s growing interest in regulating wearables by mandating a report on their use

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The following brief statement regarding the omission of a carve out proposal in the Governor’s executive budget, was sent to media outlets today at 4:00.  Next up, we will be issuing a Press Release from interested carve out campaign partners, tomorrow.  Currently there are 20 coalitions/associations in our campaign group. 

FOR IMMEDIATE RELEASE:

January 20, 2026

CONTACT:

Lauri Cole lauri@nyscouncil.org 

Michael Nitzky Michael.nitzky@omc.com 

STATEMENT FROM LAURI COLE, EXECUTIVE DIRECTOR, NYS COUNCIL FOR COMMUNITY BEHAVIORAL HEALTHCARE ON GOVERNOR HOCHUL FAILING TO ADDRESS MEDICAID MANAGED CARE IN EXECUTIVE BUDGET: 

It’s disappointing to see Governor Hochul’s Executive Budget ignore the needs of millions of New Yorkers with mental health and/or substance use disorder conditions enrolled in New York’s Medicaid managed care program by failing to include a carve out of most behavioral healthcare services from Medicaid managed care. Through this inaction, the state is putting the financial interest of health insurance plans over the needs of New Yorkers who are clamoring for the state to transform our behavioral health care delivery system and carve behavioral health outpatient, residential, and rehabilitation services out of Medicaid managed care. That’s the only way to finally cut waitlists, reduce and remove red tape, improve access to care, enhance program quality, and save New York more than $400 million annually by taking largely for-profit managed care plans out of the equation. 

Thankfully, we’ve already been working diligently with state lawmakers to directly address this issue. S8309/A8055 would amend the Social Services Law and eliminate insurance middlemen. We will continue to passionately advocate for this legislation to be included in the final state budget. We and our partners won’t stop fighting until these New Yorkers receive the quality healthcare they deserve.

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STATE BUDGET

Early analysis of the Article VII Health/Mental Hygiene bills released today (BELOW). This is where we start our in-depth analysis.  There will be much more as we peel back the layers of the onion but we are in the habit of actually trying to find the proposals mentioned in the SOS, identifying those that are new proposals as of today (not mentioned in SOS), finding the proposal in the appropriate budget bill, and then working to tie the proposal to actual legislative language and an accompanying appropriation – all before we report that it is in the executive budget proposal.   

Cheat sheet:  There are two sets of bills.  There are fiscal bills that layout and (in some cases) describe the funding being proposed in each area of the budget.  There are also bills that provide the statutory changes (changes to the law) that accompany the funding proposals.  These are referred to as Article VII bills.  There are also usually memos (in plain English) that summarize the Article VII bills.  The budget bills are organized by state agency, and by budget funding area.  

1) You can find SFY27 executive budget bills online on the DoB Website here:  https://www.budget.ny.gov  (see right hand column) 

2) SFY27 Executive Budget Book:  https://www.governor.ny.gov/sites/default/files/2026-01/FY2027ExecutiveBudgetBook.pdf?utm_source=substack&utm_medium=email

(Summary discussion of Mental Hygiene proposals begins on page 105)

3) Agency Appropriations (by Agency/Authority/Office) here:   https://www.budget.ny.gov/pubs/archive/fy27/ex/agencies/appropdata/index.html

4) RMS (our government relations consulting firm) summary of Tax and Business Executive Budget proposals

SUMMARY OF ARTICLE VII  Health/Mental Hygiene bills:

Today, the Governor released her SFY 2027 Executive Budget which totals $260 billion and eliminates a $4.2 billion budget gap without increasing income or corporate taxes, and addresses a $10.3 billion decrease in federal operating funds.  State spending on school aid would increase by 4.3% and Medicaid would be increased by 11.4% under the Governor’s plan.  The budget expects to generate $1.2 billion this year in federal funding through the continuation of the MCO tax, and also assumes a cost of over $2 billion under the Medicaid Global Cap for individuals who were in the Essential Plan.  New York awaits CMS approval of the reactivation of the Basic Health Plan and if approval is granted, the financial plan will be updated to no longer have this $2 billion cost to Medicaid as coverage for these individuals will shift to the Basic Health Plan. 

Below is an outline of some of the proposals that the Governor has included in her Health/ Mental Hygiene Article VII budget bill.  We are reviewing the other budget bills and will send further updates including what the Governor is proposing for prior authorization reform which may be limited to the commercial insurance market:  

• Medicaid Global Spending Cap-  Cap is extended one year through 2027-28 (Part A )
• Health Extenders including Telehealth Parity– Includes a number of date extensions for certain health care programs and services including the 2-year continuation of payment parity under Medicaid fee for service and managed care for services whether provided in person or via telehealth through April 1, 2028 (Part B)
• HCRA Extension- Reauthorizes the Health Care Reform Act (HCRA) spending for three years through 3/31/29 and Discontinues the Empire Clinical Research Investigator Program (ECRIP) (Part C)
• Medical Malpractice Program– Extends the Excess Physicians Medical Malpractice program through 6/30/27 and restructures the program to defer half of current payment obligations to the following year, having the program cost for the current year and outyear payment would also be reduced by half (Part D)
• Discontinued Public Health Programs- Discontinues funding for the Enhanced Quality of Adult Living (EQUAL) program, the Tick-Borne Disease program and the Enriched Housing program.  Also would eliminate a requirement for the State Department of Health (DOH) to audit the number of working hours for hospital residents (Part E)
• Technical Amendments to Health Laws– Makes a number of technical amendments to part of Public Health law including language related to prior authorization criteria to ensure the medical needs of pregnant individuals and persons with opioid use disorders continue to be considered in making prior authorization decisions by the Drug Utilization Review Board (DURB) (Part F)
• Cardiac Readiness-  Removes requirement for public access defibrillator (PAD) providers to enter into collaborative agreements with emergency healthcare providers prior to purchasing an AED;  Requires PAD providers to register AEDs with DOH with location so there is a centralized registry for where AEDs are located; DOH to partner with regional hubs, counties and experts to increase CPR and AED training opportunities throughout the state (Part G)
• Healthcare Transactions- Authorizes DOH to conduct supplemental cost and market impact reviews for significant healthcare transactions and imposes additional reporting requirements on healthcare investors, before and after completion of transactions; DOH would be authorized to share the findings of cost and market analysis reviews with the Office of the Attorney General to support investigations, reviews and other actions (Part H)
• Medical Indemnity Fund- Establishes Medical Indemnity Fund reimbursement rates for non-physician services to enrollees at 100% of Medicare, if no Medicare rate is available then at 100% of Medicaid, and if no Medicare or Medicaid rates available the Commissioner of DOH would determine the rate (Part I)
• Temporary HealthCare Staffing- Requires temporary healthcare staffing agencies to report information regarding wages and benefits of individuals provide services and to disclose all entities which they contract and subcontract with; Allows DOH to establish maximum profits for temporary agencies  to stabilize the state’s health care workforce (Part J)
• Community Paramedicine/ Hospital at Home- Extends the authority for existing community paramedicine programs to continue operations for an additional 4 years and sets the total number of community paramedicine programs allowed to operate concurrently at 99; DOH would be authorized to revoke approval for programs found in violation of the Public Health Law; Authorizes EMS practitioners to administer immunizations prescribed or ordered by a physician or nurse practitioner; Authorizes general hospitals to provide care in patient’s homes without obtaining a license as a home care agency. Participating hospitals would be required to submit operating cost data to the Department of Health annually (Part K)
• Long Term Care Proposals-  Restores the 10% reduction to the nursing home capital rate component which was enacted in FY 2025; Aligns the Medicaid Buy-In for Working Persons with Disabilities (MBI-WPD) program’s premium structure to be consistent with the premium structure approved in the Medicaid State Plan Amendment (SPA) (Part L)
• Managed Care Proposals-  Aligns the payment rules around Medicaid payments on Medicare crossover claims and removing exceptions for ambulance and psychology services from Medicare Parts B and C; 
• Eliminates the addition of Long Term Services and Supports benefits in the Essential Plan and makes dental and vision benefits in the Essential Plan permanent;  
• Repeals the process for children under the age of 19 to apply for a Medicaid presumptive eligibility determination allowing for Medicaid eligibility until a full application review can be made; 
• Authorizes the Commissioner of Health to implement a Center of Excellence model to certify healthcare professionals who provide referrals for Applied Behavior Analysis services; 
• Extends the time frame of the “cooling off period” for managed care plans and hospitals from two months to 120 days to ensure hospital-owned provider practices are not affected by termination or non-renewal while the cooling off period is in effect; 
• Clarifies that biomarker precision medical testing is only covered by Medicaid when medically necessary as determined by DOH; 
• Repeals continuous eligibility for children determined eligible for Medicaid or Child Health Plus until they reach the age 6 due to another proposal for those up to age 19 (Part M)
• Scope of Practice/Transfer of Authority to DOH- Permits medical assistants to administer immunizations in outpatient settings under the supervision of  a physician, NP or PA;  
• Establishes medication tasks by certified medication aides (CMAs) in regulation, provides an RN supervises a CMA and allows RN to assign medication related task to a CMA; 
• Transfers the definitions of medical misconduct for licensed physicians, PAs and specialist assistants (SAs) from the Education law to Public Health law and shifts regulatory authority from SED to DOH including DOH taking over responsibility of certifying the qualifications of professionals who own and operate medical entities; 
• Allows PAs to practice without supervision of a physician if they have practiced more than 8000 hours within the same or substantially similar specialty that they seek to practice without supervision in and if they meet certain other criteria (employed by rural emergency or general hospital, non-surgical D&TC or primary care practice in certain specialties) and the proposal itemizes the tasks that PAs may perform independently (Part N)
• Healthcare Stability Fund- Authorizes DOH and the Division of the Budget (DOB) to make additional investments from the Healthcare Stability Fund including an increase from $20 million to up to $40 million for FQHCs and D&TCs; Such investments may be made as increased rates of payment, lump sum payments or state directed payments; Increases the amount of funding that may be provided to hospitals and nursing homes to up to $1.5 billion from the Fund and provides that all funding is subject to available monies with in the Fund and to federal financial participation (Part O)
• Targeted Inflationary Increase- Provides a 1.7% targeted inflationary increase for the period of 4/1/26-3/31/27  for eligible mental hygiene and other human services programs under OMH, OASAS, OPWDD, OCFS, OTDA and SOFA; The language specifies that each local government unit/direct contract provider receiving funding must submit a written certification attesting how such funding will be or was 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 service costs prior to supporting any salary increases or other compensation for executive level job titles (Part P)
• Integrating Behavioral Health Services- Creates a new section of mental hygiene law and amends public health and social services law to authorize a single licensure of comprehensive integrated behavioral health services; Specifically, OMH and OASAS will be given the authority to issue a joint license to providers who deliver both mental health and addiction services pursuant to regulations developed by the agencies governing licensing, corporate, programmatic, reimbursement, physical plant, incident reporting and information sharing requirements; OMH and OASAS would set the rates for the services covered under the joint license (Part Q)
• Gambling Addiction Insurance- Makes technical amendments to replace “substance use disorder” with “substance-related and addictive disorder”; Aligns the insurance law with the mental hygiene law and recent changes to the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) to ensure individuals with gambling disorders receive the same coverage and protections as substance use disorders to prevent delays or denials for treatment (Part R)
• Adult Home Advocacy & Adult Home Resident Council- Eliminates the  Adult Home Advocacy and Adult Home Resident Council programs at the Justice Center for the Protection of People with Special Needs (Part S)

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Other responses (to the Governor’s executive budget proposal) worth noting:

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