January 12, 2026
NYS Council Insider’s Note: We just got word that this Friday at 9:30, DoH will be hosting a stakeholder Webinar to discuss New York’s recent federal award and participation in the Rural Healthcare Transformation Fund Program. No registration details are available yet but if you are interested, we suggest you block 9:30 – 11:00 or so on your calendar and we will send you the announcement as soon as we see it.
See NY’s RHTP Project Summary. Also the NYS Council’s formal recommendations for use of some of the RHTP that we submitted in September. You will note that the award summary (attached) seems to coincide with 3 of the BH-related recommendations we submitted to DoH for inclusion in its 2025 proposal to CMS.
———-
RURAL HEALTH TRANSFORMATION PROGRAM
HealthAffairs, 1/2026
|
CMS has officially announced FY2026 Rural Health Transformation (RHT) Program awards to all 50 states, launching the first year of this $50B investment in rural health. You will note that NYS is just one of 3 states that has NOT published its RHTP application online – all we have is a summary from CMS, and an article published by Politico last month that repeats the high level proposals the state proposed. The resource (linked for download) builds on a previous November 2025 RHT Program Summary of State Applications. Sellers Dorsey experts created a high-level summary to provide a clear look at each state’s initiatives and the funds they were awarded for Year 1. Our Sellers Dorsey Summary Covers:
|
—————-
STATE OF THE STATE TOMORROW, 1/13/2026
The Governor will deliver her annual State of the State address tomorrow at 1pm in Albany. This is the first opportunity to hear about the Governor’s policy and budget priorities for the coming year. Governor Hochul has already previewed some of these priorities in press events over the past week or so. These priorities include: cracking down on tech companies by instituting child protections in social media and apps; new gun control measures; huge investments in child care and a commitment to universal pre-K statewide; and more. We have not heard anything on health care yet.
You can watch the Governor’s address by webcast at 1pm on the Governor’s website here: https://www.governor.ny.gov/programs/2026-state-state
The Governor will lay out the details of her proposals in the Executive Budget, which we expect will be released on Tuesday, 1/20.
As always, please be in touch with any questions.
——————————
Federal News and Information
220,000 Fewer Workers: How Trump’s Cuts Affected Every Federal Agency
New data offers the first clear view of the impact of the buyouts and firings.
By Emily Badger, Francesca Paris and Alicia Parlapiano, NY TIMES, 1/9/26
——————–
APA and NYSPA file lawsuit against EmblemHealth for ‘Ghost Networks’
Becker’s Hospital News, 1/12
The American Psychiatric Association and the New York State Psychiatric Association filed a lawsuit in federal court Dec. 30, 2025, against New York City-based EmblemHealth, alleging the insurer operates a deceptive “ghost network” of mental health providers.
The complaint accuses EmblemHealth of falsely inflating the size of its mental health provider network by listing clinicians who are not available to see patients. According to the filing, the insurer allegedly misrepresented in-network offerings “to attract more members, and therefore more premiums and/or administrative fees.”
The associations further allege that a majority of EmblemHealth’s directories include duplicate entries for the same mental health provider — in one case, a single psychiatrist appeared 29 times. The directories also list nonphysician providers, such as nurse practitioners and social workers, and include providers affiliated with private entities.
The lawsuit describes this as a systemic issue that obstructs members’ ability to obtain timely and effective mental health treatment, often forcing patients to pay out-of-network rates or forgo care altogether. The filing states that approximately half of the listed psychiatrists are either telehealth-only or serve only hospital inpatients.
The plaintiffs are pursuing injunctive relief and unspecified monetary damages.
When reached by Becker’s, a spokesperson for EmblemHealth declined to comment, citing the pending litigation.
———————-
Congress Faces Risk of a Partial Government Shutdown
Congressional leaders have until the end of the month to reach a bipartisan deal to keep parts of the federal government open and funded, or they risk a partial government shutdown. Last fall, the nation experienced the longest government shutdown in U.S. history, risking harm to nonprofits that partner with the federal government to provide critical services to millions of Americans. The 2025 political stalemate ended after Congress and the White House enacted a spending package that included a short-term continuing resolution (CR) to keep the government open until January 30. The spending package also included full-year spending bills for federal agencies related to agriculture, military construction, veterans affairs, and the legislative branch. Read more about the harmful impacts of a government shutdown.
This week, Congress is expected to vote to enact three more spending bills to provide full-year funding for the Interior Department, Environmental Protection Agency, U.S. Army Corps of Engineers, and U.S. Departments of Commerce and Justice. Meanwhile, congressional leaders are continuing to negotiate over the remaining six spending bills that are needed. Before the expiration of the CR at the end of the month, Congress will likely vote on another legislative package including a CR and any of the remaining full-year spending bills on which congressional leaders can reach a bipartisan agreement. It is unclear at this time whether the CR will continue funding through the end of the fiscal year, or if it will provide only short-term resources.
Congress, Administration Target Fraud for New Hearings and Investigations
Last week, the U.S. House of Representatives’ Committee on Oversight held a hearing on Fraud and Misuse of Federal Funds in Minnesota to discuss alleged fraud in the state’s social services programs and previous actions during the coronavirus pandemic, potentially through government contracts with a nonprofit in the state. Further hearings are expected related to fraud allegations related to federally supported daycare programs in Minnesota, identified by and spread by an online influencer.
In response to the viral allegations, the Trump administration froze more than $10 billion in childcare and development funds used to subsidize childcare for low-income families in five states (California, Colorado, Illinois, Minnesota, and New York) – a moved blocked by a federal court last Friday. Vice President Vance announced a Department of Justice (DOJ) new assistant attorney general position focused on investigating fraud. In a highly unusual move, Vice President Vance said the new DOJ position would be run out of the White House and report to the president. Additionally, Treasury Secretary Bessent announced Initiatives to Combat Rampant Fraud in Minnesota, and the Internal Revenue Service will soon launch investigations into the tax-exempt status of nonprofits involved in the alleged fraud. These actions may be a starting point for additional investigations in other states.
Federal FastView
-
- DOJ Investigates Government Contractors for DEI Practices: The U.S. Department of Justice (DOJ) launched investigations into several major companies and organizations that contract with or receive funding from the federal government. The investigations target diversity, equity, and inclusion (DEI) practices based on the Administration’s novel argument that such practices violate the False Claims Act (FCA). DOJ’s actions stem from an executive order signed in January 2025 directing federal agencies to identify companies, nonprofits, and other entities for referral to DOJ and follow a corresponding DOJ memo from May 2025.
- Public Service Loan Forgiveness (PSLF) Legislation: Last month, Sen. Kim (D-NJ) introduced the PSLF Payment Completion Fairness Act (S.3487) to remove a current requirement that PSLF applicants be employed in a public service job at the time of forgiveness. This requirement unfairly disqualifies public servants who have completed at least ten years of dedicated service and meet all other requirements but may have been laid off or switched jobs by the time their applications are approved. Reps. Houlahan (D-PA) and Fitzpatrick (R-PA) previously introduced a House companion (H.R. 3267). NCN endorsed the bill.
RURAL HEALTH TRANSFORMATION PROGRAM
HealthAffairs, 1/2026
| CMS has officially announced FY2026 Rural Health Transformation (RHT) Program awards to all 50 states, launching the first year of this $50B investment in rural health. You will note that NYS is just one of 3 states that has NOT published its RHTP application online – all we have is a summary from CMS, and an article published by Politico last month that repeats the high level proposals the state proposed. The resource (linked below for download) builds on a previous November 2025 RHT Program Summary of State Applications (attached document). Sellers Dorsey experts created a high-level summary to provide a clear look at each state’s initiatives and the funds they were awarded for Year 1. Our Sellers Dorsey Summary Covers:Confirmed FY2026 RHT award amounts for all 50 statesState-specific RHT initiatives, including technology, workforce, behavioral health, and moreContext on how funding is structuredEasily accessible state RHT plan information |
—————————-
From Politico, 1/12/26:
CODE RED: The nation’s largest health care union is seeing red.
Members of 1199SEIU United Healthcare Workers East are rallying in Albany today with Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie to mark the launch of their new “Code Red” campaign, which will call for a $2 billion state investment to insulate New York against the health care cuts in Trump’s One Big Beautiful Bill Act.
The money would support the continuation of Medicaid rate increases for hospitals and nursing homes that were funded last year by a tax on managed care organizations, which the federal government ordered New York to phase out by March. It would also pay for additional rate hikes of 3 percent for hospitals and 4 percent for nursing homes, as well as $800 million to help financially distressed hospitals that primarily serve patients on Medicaid or without insurance.
Helen Schaub, the union’s New York policy director, said the state could kickstart the investment using its reserves, then would ideally find a recurring revenue source for permanent Medicaid rate increases.
“We’ve been operating on a year-to-year basis for many years,” Schaub told Playbook.
Schaub said the union is not “fixating” on any one funding mechanism, though the organization believes that eliminating Medicaid managed long-term care plans could save the state a couple billion dollars annually.
The new campaign is being backed by the Healthcare Education Project, a joint advocacy effort by the union and the Greater New York Hospital Association. —Maya Kaufman
—————-Advertisement from Feldesman, LLP:
Are your policies strong enough to meet federal grant requirements? |
|
Federal grants come with strict ethical and compliance obligations—and failing to meet them can put your funding and reputation at risk. This webinar goes beyond theory, providing practical guidance to turn complex regulatory requirements into clear, compliant policies for your organization. Using plain language and real-world scenarios, Feldesman attorney Phillip Escoriaza will break down the why and how of legal and regulatory requirements into policies you can implement now. Take this crash course in federal standards of conduct and learn how to:
Bonus: Sample policies and tools are included for all registrants. Whether you’re developing policies for financial management, mandatory reporting or whistleblower protections, you’ll gain the clarity and tools you need to confidently meet federal expectations and minimize risk. |