Albany, NY – State lawmakers joined a broad range of mental health and substance use disorders advocates representing care recipients, family members, and providers from across New York State to demand a carve out of most Office of Mental Health (OMH) services and/or Office of Addiction Services and Supports (OASAS) substance use disorder services from the state’s Medicaid Managed Care program. 

Tens of thousands of New Yorkers with Medicaid Managed Care insurance are struggling mightily to obtain the mental health or substance use disorder services and supports they need and deserve from community-based agencies that are currently forced to transact business with mostly for-profit insurance companies that employ tactics designed to delay or deny care for Medicaid members, and to delay or deny reimbursement to the community-based agencies that serve them.

Many Managed Care Organizations (MCOs) hired by the state to manage mental health and substance use disorder Medicaid benefits have failed to meet a contract requirement that holds them to spending 96% of the funds they receive from the state, on actual services for Medicaid beneficiaries. Despite this requirement and for many years, New York State failed to enforce this requirement while insurers sat on the funds, depriving the OMH and OASAS systems of care of scarce taxpayer dollars that should have been spent on Medicaid members. New York State is now collecting the funds back from the MCOs but for years, New Yorkers who need mental health services, and the systems of care charged with serving them were deprived of hundreds of millions of dollars during periods of high opioid overdose rates, and a youth suicide rate that continues to increase.

Currently, Managed Care Organizations (MCO) insurer claims denial rates are three times the rate of denials in the fee-for-service system, and client appeals challenging insurer denials are overturned 64% of the time for substance use disorder services, and 52% of the time for mental health care. At the Tuesday event, State Senator Nathalia Fernandez, the Chair of the Alcoholism and Substance Use Disorders Committee, highlighted proposed legislation (S.8309A/A.8055A) that would return reimbursement of these services to the Medicaid fee-for-service system.

The recently approved New York State Budget failed to address New York’s ongoing access to care crisis by including a carve out of these services from the state’s Medicaid managed care program. A new letter from stakeholders notes the implementation of a draconian federal policy that will not enforce federal parity regulations designed to ensure mental health and substance use disorder services are treated similarly to physical health services. This policy combined with anemic NYS regulatory oversight of MCOs is a serious threat to the continued viability of the public mental hygiene system. It is yet another reason why lawmakers must act immediately to streamline the process, save NYS $400M annually, and immediately improve access to care for New Yorkers in need of low cost, high quality behavioral health care.

Assemblymember Jo Anne Simon (AD-52), Chair, Assembly Committee on Mental Health: 

“New Yorkers seeking mental health and substance use disorder care should not be forced to navigate endless red tape. My legislation with Senator Brouk would help restore timely access to care, reduce administrative burdens on providers, and save New York State an estimated $400 million annually. At a time when federal threats to mental health services continue to grow, New York must invest in care for people, not profits for middlemen.”

State Senator Samra Brouk (SD-55), Chair of the Committee on Mental Health: 

“As Chair of the Senate Mental Health Committee, I know that New Yorkers with mental health and substance use disorders are struggling to receive the care they need. My bill with Assemblymember Simon, S8309/A8055, will restore reimbursement of these services to the Medicaid fee-for-service system to invest in care for New Yorkers in crisis instead of insurance company profits.”

State Senator Fernandez (SD-34), Chair of the Committee on Alcoholism and Substance Use Disorders Committee:

“New Yorkers seeking mental health and substance use disorder services should not be delayed by a system that makes care harder to access and harder to provide. Our local providers need stability, timely reimbursement, and a structure that allows them to focus on the critical work of serving people in crisis. I thank Senator Brouk and Assemblymember Jo Anne Simon for championing this initiative and standing with community-based organizations across the state.”

Lauri Cole, Executive Director of NYS Council for Community Behavioral Healthcare:

“Right now, thousands of New Yorkers on Medicaid are stuck on waitlists and cannot get access to mental health and substance use disorder services. That’s disgraceful and it’s why the 175 members of the New York State Council for Community Behavioral Healthcare, along with a broad range of stakeholders, are calling on state leaders to carve most mental health and substance use disorder services out of the state's Medicaid managed care program. 

Too many New Yorkers with these conditions are losing the battle to access the care they need and deserve while providers focus on battling insurance companies - middlemen the state pays handsomely to 'manage' care. But the data is clear: instead of improving our system of care, insurers appear to be lining their pockets with taxpayer dollars by delaying or denying services, and delaying reimbursement to providers so they can earn interest on the funds the state pays them to reimburse for actual services rendered. New Yorkers have waited ten years for this change, and we’re hoping that our leaders in Albany will finally establish the carve out and remove these state-sanctioned barriers."

"Recovery is hard enough without having to fight your insurance company just to access care. Medicaid is the single largest payer of substance use disorder treatment in the country, covering nearly 47% of individuals living with SUD, and for many people it is the primary pathway to treatment, medication and long-term recovery support. Yet far too often, individuals and providers are met with inappropriate claim denials, delayed reimbursements, and provider networks that don’t actually exist. These systemic barriers delay access to lifesaving care, strain community providers, and undermine recovery at the exact moment people are ready to ask for help. Treatment for SUD or mental health should not be treated differently than any other healthcare service, which is why behavioral health services must be carved out from Medicaid managed care. We need a system that prioritizes timely access to care and supports recovery, not one that creates additional barriers for people seeking help during the moments they need it most." - Christopher Assini, CRPA-P, Director of Policy, Friends of Recovery - NY 

"Medicaid Managed Care works for some New Yorkers, but not all.People with the need for ongoing, long-term services have not been well served through managed care.Taking behavioral health services out of the management of insurance companies is the right thing to do for people who need more than annual check-ups and prescriptions from time to time." -Lara Kassel, Coordinator, Medicaid Matters New York

"Our network of families and young people impacted by lack of access to behavioral health services need the legislature to carve out outpatient mental health and substance use services from the state's Medicaid Managed Care program, " said Paige Pierce, CEO of Families Together in New York State."By passing S8309A/A8055A, we can shift $400 million away from insurer profits towards the beleaguered mental health and substance use service delivery system; without this bill, the state leaves for-profit managed care organizations in control of Medicaid, the biggest payer of behavioral health services in the state, while forcing families and providers to fight their deny-and-delay business tactics that obstruct access to care. We must carve out behavioral health this session!"

“NAMI NYS believes that all people with mental health conditions deserve accessible, affordable, and comprehensive health care. Medicaid pays for vital services that people with mental health conditions rely on, such as medications, psychotherapy, intensive and inpatient treatment, peer support, and crisis care. Unfortunately, Medicaid Managed Care has been plagued by denials, bad incentives, and operational deficits for behavioral health providers. Returning behavioral health to a fee-for-service model supports the workforce, returns money to the state, and expands access to mental health services for all individuals and families affected by mental health conditions." James Norton, MCJ, Government & Community Affairs Director, National Alliance on Mental Illness New York State

"We urge state leaders to do right by New Yorkers with mental health needs by carving behavioral health services out of Medicaid managed care," said Raysa S. Rodriguez, Executive Director of Citizens' Committee for Children of New York. "This is a critical opportunity for state leaders to reduce known barriers entrenched in the managed care system that result in unnecessary red tape, delayed care, and denied services. Advancing this proposal would enable New York to invest hundreds of millions of dollars into the services children, families, and communities desperately need, rather than in the pockets of managed care companies. New York families deserve better, and CCC continues to stand with partners demanding State leaders pass S.8309-A (Brouk) and A.8055-A (Simon)."

"The New York State Psychiatric Association (NYSPA) joins fellow mental health, family and consumer advocacy organizations urging New York State to return outpatient mental health and substance use disorder services back into Medicaid fee-for-service," said Rachel A. Fernbach, Esq., NYSPA Executive Director and General Counsel. "The ten-year experiment carving these services into Medicaid managed care has proven detrimental to the ability of New Yorkers to secure essential mental health and substance use disorder care in a timely fashion. In the last six years, over 300 citations have been issued by state regulators against Medicaid managed care companies for serious violations, including failure to pay required rates and inappropriate claim denials. Now is the time for New York State to transition these services back into fee-for-service as we continue to contend with a nationwide mental health crisis and looming federal cuts that will impact the entire health and mental health systems."

“New Yorkers seeking mental health and substance use services should not have to fight through endless red tape just to access support. Medicaid managed care has created unnecessary barriers including denied services, repeated prior authorizations, ghost networks, delayed payments, and months-long waits that leave people without support until they are in crisis,” said Luke Sikinyi, Vice President of Public Policy at the Alliance for Rights and Recovery. “Carving behavioral health services out of managed care will help ensure funding goes directly to services, stabilize providers and the workforce, and allow people to get timely, community-based support before their needs escalate into hospitalization, homelessness, or involvement with the criminal legal system.”

"The Association for Community Living supports the proposal to carve out behavioral health services from Medicaid managed care and return them to a more transparent and accountable fee-for-service system," said David Boodram, Director of Governmental Affairs, ACL. "Our members see firsthand how reimbursement delays and administrative barriers undermine care, strain providers, and jeopardize housing stability and recovery for New Yorkers living with serious mental illness. Returning these services to fee-for-service would improve access to care while saving the State hundreds of millions of dollars that can be reinvested directly into behavioral health services and workforce support rather than unnecessary insurance administration.

“New York’s behavioral health system cannot function effectively while it remains subject to the persistent barriers created by Medicaid Managed Care,” said Allegra Schorr, President of the Coalition of Medication Assisted Treatment Providers and Advocates (COMPA). “Providers across the state are facing inaccurate and delayed payments, along with frequent denials for services that are clinically appropriate and already rendered. These administrative burdens are not just frustrating – they directly undermine our ability to deliver timely, life-saving care.

“Carving behavioral health services out of Managed Care is essential to stabilizing the treatment system and ensuring accountability. Without meaningful reform, we risk further restricting access to care at a time when the opioid crisis continues to devastate communities. Overdose rates remain disproportionately high in communities of color, underscoring longstanding inequities in access to treatment. Reduced access will only deepen these disparities and lead to more preventable deaths. New York must act now to remove these barriers and protect both providers and the patients who depend on them.”

“MHANYS joins a broad array of statewide behavioral health and family consumer advocacy organizations in calling on New York State to carve OMH and OASAS community-based mental health and substance use services out of Medicaid Managed Care," said MHANYS CEO Glenn Liebman. "As New York State contends with major changes to Medicaid and public health insurance programs as result of recent federal action, carving these services out and back into Medicaid Fee-For-Service will generate upwards of $400 million for the community-based system. The system is under tremendous stress amidst the mental health crisis and providers facing workforce challenges, including 20%-30% vacancy rate and a 25% annual turnover on average, as well as rising operational and programmatic costs. The experiment of carving these services into managed care has not yielded the promised results. To the contrary, over 300 citations have been issued against managed care companies by state regulators since 2019 and survey data from providers confirms protracted delays in being reimbursed and staff time and resources spent on administration. New Yorkers and their families deserve a system that ensures high quality care without endless bureaucratic red tape and delays."

"Too many New Yorkers seeking substance use disorder and mental health services face delays, confusion, and disruptions in care at the very moment they need help. Community-based providers spend significant unreimbursed time and resources helping people in need of services navigate prior authorizations, coverage issues, and inconsistent administrative requirements across plans, time that could otherwise be spent supporting people in treatment and recovery. A Medicaid Managed Care carve-out would help reduce these administrative burdens, strengthen continuity of care, and improve timely access to services for New Yorkers across the state.”

Jihoon Kim, LMSW, CRPA-P, President and CEO, InUnity Alliance