Summary of Executive Budget Proposal-
January 24, 2022
NYS Council members,
We are incredibly proud of our advocacy over the past 15 months that resulted in the proposal (discussed below) that would return $222 million in critical resources to OMH and OASAS (if enacted as written). We need to protect this proposal as well as the related proposal we advocated for that would move the state’s process for identifying MCOs to a competitive bid process.
Just about every other state in the country utilizes a competitive process, but this would be a first for NYS. Because competitive bidding threatens the business of every Medicaid MCO in the state (competitive bidding has also been called “selective contracting” because some MCOs will NOT be selected and will lose out on the business), the MCOs will argue publicly, as they already started to, that it will be disruptive to enrollees and threaten access to care. We will need to be ready to argue that quite the opposite is likely– competitive bidding can achieve desired outcomes like cost control and quality improvement because MCOs will be forced to compete against one another for the first time, and the state can weed out MCOs with inadequate provider networks, low quality scores, and poor records of complying with state requirements.
For your convenience, I pasted the summary document we sent to all members on Friday regarding the Competitive Bid provision in the executive budget proposal (below).
To protect these proposals, the NYS Council is convening a meeting this Friday bringing together association leads from across the healthcare sector who represent populations (and providers) that are carved-in to Medicaid managed care. Our goal is to identify like-minded advocacy organizations that want to support these proposals and then lead an effective campaign to defend the competitive bid proposal, and advocate for additional protections for care recipients and providers that transact business with MCOs.
Stand by for more.
January 23, 2022
Summary of SFY 2023 Health/MH Article VII Executive Budget Proposal- Part FF & Aid to Localities OMH/OASAS Funding Behavioral Health Reinvestment from MMC Proposal
This Executive Budget proposal amends the social services law enacted in 2014 (section 365-m) regarding reinvestment of savings from the behavioral health carve into Medicaid managed care to state that pursuant to appropriations within OMH and OASAS, DOH shall reinvest savings realized through the transition of the behavioral health population from Medicaid FFS to MMC, including savings realized through recovery of premiums from managed care providers which represent a reduction of spending on qualifying behavioral health services against established premium targets for behavioral health services and the medical loss ratio applicable to special needs managed care plans for the purpose of increasing investment in community based behavioral health services, including residential services certified by OASAS.
The proposal keeps existing language in the law stating that the methodology used to calculate the savings shall be developed by DOH and DOB in consultation with OMH and OASAS and includes that in no event shall the full annual value of the reinvestment exceed the value of the premiums recovered from managed care providers which represent a reduction of spending on qualified behavioral health services.
Current language is retained which states that within any fiscal year where appropriation increases are recommended for reinvestment, insofar as managed care transition savings do not occur as estimated, then spending for such reinvestment may be reduced in the next year’s annual budget itemization.
Reinvestment Funds Accounting in Annual Report (Regulation Requirement Removed)
The proposal also removes the requirement for DOH to promulgate a regulation to distribute funds. Instead, the proposal states that the Commissioner of DOH shall include information regarding the funds available for reinvestment in the annual report required under section 45-c of Part A of Chapter 56 of the laws of 2013.
Funds Included for Reinvestment in SFY 2022-23 Executive Budget Aid to Localities Bill
The budget allocates $74 million from MMC plans recoupments for reinvestment through OMH and allocates $37 million from MMC plan recoupment for investment through OASAS for SFY 2022-23. This totals $111 million (state share) and $222 million gross ($148 million for OMH and $74 million for OASAS over two years).
The proposal would take effect immediately upon enactment.
Please let us know if you have any questions.
(Sent Friday to all NYS Council members)
January 21, 2022
Summary of Part P of HMH Article VII Executive Budget SFY 2023
Requires Competitive Bid Process for Medicaid Managed Care Plans
The SFY 2022-23 Executive Budget includes a proposal to change the way the State
selects and contracts with Medicaid managed care plans including mainstream
managed care plans (MMCs), managed long term care plans (MLTCs), Medicaid
advantage plans (MAPs), and health and recovery plans (HARPs). Under this
proposal the state would follow what is done in other states across the country by
utilizing a competitive procurement process to select the plans that it contracts with
to administer benefits to enrollees under Medicaid. The proposal projects out-year
savings of $100 million state share ($200 million gross) in SFY 2024 if enacted.
The proposal states that effective April 1, 2022 and expiring on the date the
Commissioner of Health publishes on the State Health Department (DOH) website a
request for proposals (RFP), there shall be a moratorium on processing or
approving new applications by managed care plans, including applications seeking
authorization to expand the scope of eligible enrollee populations.
However, such moratorium will not apply to application submitted prior to January
1, 2022, applications seeking approval to transfer ownership or control of an
existing plan, applications seeking authority to expand an existing plan approved
service area, applications seeking authority to form or operate a plan through an
entity certified under sections 4403-c or 4403g of public health law (comprehensive
HIV special needs plans and developmental disability individual support and care
coordination organizations, respectively), or applications demonstrating to DOH’s
satisfaction that it is appropriate to address a serious concern with care delivery
(lack of adequate access to a plan in an area, or special needs services).
New Competitive Bid Process
The proposal requires the use of a competitive bid process based on an RFP and
proposals submitted to DOH for the selection of qualified managed care plans to
participate in the managed care program pursuant to a contract with DOH. The
language applies to MMC, MLTC, MAP and HARP plans and notes that DOH is
authorized to contract directly with comprehensive HIV special needs plans (SNPs)
without a competitive bid process.
The Governor’s proposal includes additional criteria that must be considered as part
of the new competitive bid process beyond the current standards in place. The
current standards include:
• Designating the geographic areas, as defined by DOH in the RFP, to be served
and the number of eligible participants in a designated area;
• Including a network of health care providers in sufficient numbers and
geographically accessible to service program participants;
• Describing the procedures for marketing in program locations;
• Describing the quality assurance, utilization review and case management
mechanisms to be implemented;
• Demonstrating the applicant’s ability to meet data analysis and reporting
• Demonstrating financial feasibility; and
• Including other information deemed appropriate by DOH.
The new criteria includes:
• Accessibility and geographic distribution of network providers taking into
account the needs of persons with disabilities and differences between rural,
suburban and urban settings;
• Which major public hospitals are in the plan’s network;
• Demonstrated cultural and language competencies for the population;
• The corporate organization and status of the bidder as a charitable
• The ability of a bidder to offer plans in multiple regions;
• The type and number of products the bidder proposes to operate;
• Whether the bidder participates in products for integrated care for dual
• Whether the bidder participates in value based payment arrangements,
including delegation of significant financial risk to clinically integrated
• The bidder’s commitment to participation in managed care in the state;
• The bidder’s commitment to quality improvement;
• The bidder’s commitment to community reinvestment spending (to be
defined in the RFP);
• Past performance in meeting managed care contracts or other federal/state
requirements for current or previously authorized plans, and if DOH has
issued any statements of findings, deficiency, sanctions or enforcement,
actions for non-compliance, and whether the bidder addressed and issues in
a timely manner; and
• Other criteria deemed appropriate by the Commissioner of DOH, which is to
be developed with the Commissioners of the Office of Mental Health (OMH),
the Office of Addiction Services and Supports (OSAS), the Office for People
with Developmental Disabilities (OPWDD) and the Office of Children and
Family Services (OCFS), as applicable.
The language also states that the Commissioner shall not be limited in evaluating
proposal content or criteria on a pass-fail, scale, or other methodological basis, in
consultation with other Commissioners referenced above.
DOH is required to post on its website the RFPs and a description of the proposed
services, the criteria, the manner by which proposals should be submitted, the
manner by which a managed care plan may continue to participate in the program
pending awards through the competitive bid process and upon award, list the
managed care plans DOH plans to contract with and later the final slate of
contracted managed care plans.
The Commissioner of DOH is required to make awards for each product, for which
proposals were requested, to at least 2 managed care providers in each geographic
region defined by DOH in the RFPs (as long as at least 2 applied) and shall have the
discretion to add more based on need for access up to 5 contracts in each region.
Contract term periods shall be determined by the Commissioner of DOH and may be
renewed, or modified without a new RFP to ensure consistency with federal/state
law changes, regulations or policies. The Commissioner is authorized to terminate
awarded contracts for cause including violations of contract terms, state/federal
laws or loss of necessary state/federal funding.
Within 60 days of DOH issuing the RFPs, a managed care plan previously approved
to participate in the managed care program, shall submit its intent to complete such
proposal. A plan that fails to do so, indicates its intent not to complete a RFP, fails to
submit a proposal within the required timeframe, or is not awarded the ability to
continue to participate in the program, shall upon the direction of DOH, terminate
its services and operations in accordance with the contract with DOH and shall be
required to maintain coverage for such a period of time as determined by DOH to
ensure a safe and orderly transfer.
DOH is authorized to reissue RFPs if needed to ensure access to a sufficient number
of managed care plans.
Special Needs Managed Care Plans
The proposal states that the Commissioner of DOH, shall jointly with the
Commissioners of OMH and OASAS select a limited number of special needs
managed care plans capable of managing the behavioral and physical health needs
of Medicaid enrollees with significant behavioral health needs.
Managed Long Term Care Plans
A competitive bid process would also be required for selecting MLTC plans under
this proposal pursuant to the existing criteria required for the approval of a plan
application for a certificate of authority. The proposal includes additional criteria to
be considered, similar to other plans as described above and a similar moratorium,
RFP and award process. Specific to MLTCs, the moratorium on new plan approvals
during the RPP process shall not apply to applications seeking to operate under the
Program for All-Inclusive Care for the Elderly (PACE) model or to serve dual eligible
The proposal also states that for the period of April 1, 2022 until March 31, 2022,
DOH shall establish and enforce by means of premium withholding equal to 3% of
the base rate, an annual cap on total enrollment for each MLTC plan, based on a
percentage of each plan’s reported enrollment as of October 1, 2020.
Please let us know if you have any questions.