MHANYS has put together a series of recommendations to the Executive on how to support community services and the workforce during the federal budget cuts.
One of the recommendations that stands out is the idea of a Psychiatric Hospital Closure Commission. Given the fiscal crisis we will be facing over the next several years, we need to continue to spend on community services and supports. New York currently has 24 psychiatric hospitals that house less than 3000 people. This is more hospitals than Texas, California, and Florida combined.
The money that it costs to operate these hospitals through heating, maintenance, and repair is astronomical. This money could be much better used for community mental health supports.
We are not suggesting that beds should close (that is a clinical decision made by the NYS Office of Mental Health) and that people should lose their jobs but we are saying that some of these facilities need to close or be consolidated, and utilized for alternative uses. We also recognize that good clinical work is being done in these hospitals but the money could be better spent on an array of community support services so that individuals discharged from hospitals or prisons have a path to recovery through more services and better compensation for workforce and providers.
This is also not unprecedented. Governor Hochul has created a Prison Redevelopment Commission that has been successful in closing several prisons and utilizing them for alternative uses. It was done because of a dwindling prison population. The same is true in mental health.
One of our recommendation is that Governor Hochul create a Psychiatric Hospital Rightsizing Commission to look at alternative uses for hospitals that could be closing.
It is Number 1 among our 8 recommendations.
MHANYS Recommendations for Mitigating & Planning for Federal Impacts
As New York State evaluates the full impact of HR1 on the state budget via cuts to the Essential Program, Medicaid, and SNAP, MHANYS recommends that New York State consider the following recommendations. These recommendations would help alleviate regulatory and administrative requirements facing community based human services not-for-profits providers who will likely see an influx of individuals in need as a result of HR1.
We strongly believe that the cornerstone of recovery oriented services is a valued mental health workforce. It is important to make sure that whatever changes happen due to HR1 that priorities should be funding for the workforce and for provider agencies that continue to face double digit increases in running their programs. If there is any additional funding in the coming year’s executive budget, we recommend that it be put to a targeted inflationary increase (TII).
1) Right Sizing the State Psychiatric Hospital System for the Future
New York State currently operates 24 State Operated Psychiatric Hospitals and has recently approved the construction of yet another new facility in 2026. According to our friends at The Alliance for Rights and Recovery, New York, with a population 19.9 million, operates more hospitals than those that are funded by the three most populous states combined: California (39.4 million) operates 5, Texas (31.3 million) operates 11, and Florida (23,372,215) operates 6.
In the 1950’s, over 95,000 people were confined in these hospitals. Only a handful of facilities have closed since the 1950’s yet the total number of individuals in these hospitals total less than 3,000 today. This amounts to an average of less than 116 people in each facility. The cost of running these hospitals on a daily basis for such an incredibly small census needlessly place an incredible strain on a budget that is expected to face huge cuts in the coming year.
There are 800,000 people in the public mental health system. Of which less than 3000 are in state operated facilities. According to the 2025 OMH 5.07 plan, 27.2% of the ten billion dollars that make up our state’s mental health budget funds state operated programs. If you include New Yorkers who reside in our state psychiatric facilities and those who utilize state operated programs, that comes to a total of 56,000. This leaves 63.8% for the 752,000 receiving community mental health services. The ratio is incredibly one-sided and has led to a vastly underfunded community mental health system going back many decades.
For many years, the State has been propping up these facilities that house in many cases less than a hundred people in facilities that used to house thousands of individuals. The cost of heating, lighting, air conditioning, maintenance, and renovation are consistent and place a daily financial burden on the New York State Office of Mental Health.
At the same time, New York’s placement as the nation’s top operator of state psychiatric hospitals is not only a cost issue but also a legal and ethical one. The closures of unnecessary hospitals would allow funding to be reinvested into desperately needed community-based mental health services, without which some individuals will inevitably require hospitalization as they relapse. Importantly, the state in its analysis of comments on regulations proposed by the Department of Financial Services (DFS) has admitted that there are NOT sufficient community-based behavioral health services to ensure network adequacy. In the DFS Assessment of Public Comments of revised proposed regulations, published by DFS on November 21, 2024, in the State Register (I.D.# DFS-08-24-00001-RP), addressing network adequacy and access standards for behavioral health services, DFS stated that “…there are not sufficient numbers of these [behavioral health] providers in the state.” DFS later states that “…at present there is not [behavioral health] provider sufficiency. The Department cannot at this time provide a date by which the determination of provider sufficiency will be made.”
Clearly, the state has admitted, formally on the record, there are not sufficient behavioral health services to provide adequate treatment to those in need, at a time when there is a massive behavioral health crisis in the state. This admission, and the urgency of the unmet need for services, create significant legal, policy and moral responsibilities that the state must rapidly address. Closing unneeded, massively inefficient institutions would free up desperately needed resources to address the lack of adequate community-based mental health services, as the state has formally admitted on the record.
MHANYS and the Alliance are expecting that the Olmstead Plan that the state will release at year’s end will include recommendations to lower the number of hospitals and to use these savings to exponentially grow the community service system. In doing so, we would be following the example of New York’s historic Reinvestment Act of 1994 that closed five state hospitals and redirected hundreds of millions of dollars to expand access to rehabilitation, peer support, case management, transportation, and housing related supports.
In 2024 to address the needs of the dwindling prison population, Governor Hochul created a Prison Redevelopment Commission tasked with closing several State prisons across New York State. Under her leadership, fifteen prisons have closed and there is additional funding in the budget to close three more this year. MHANYS and the Alliance strongly urge support for a Psychiatric Hospital Commission similar in size and scope to the Prison Commission.
MHANYS Recommendations:
- Set up a Psychiatric Hospital Commission designed to close State hospitals and seek alternative uses for these hospitals similar to the Prison Redevelopment commission to review State Adult psychiatric facility closures. The State has closed over 15 prisons in the last several years and the 2025-26 state budget recommended the closure of three more prisons based on declining numbers.
- Create a Psychiatric Hospital Community Fund to provide proceeds to community mental health from facility closures.
- Work with the Empire State Development Corporation to look at alternative uses of these facilities.
2) Enhancing Compliance with Mental Health & Substance Use Disorder Parity Laws
New York is approaching the twenty-year anniversary of the signing of New York’s mental health parity law, Timothy’s Law. It has been seventeen years since the enactment of the 2008 federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA). The intersection of the laws was carefully constructed as the federal law only applies to large employers, while New York’s law covers small groups and large groups. Further, the federal parity statute does not require that behavioral health services be covered, but if behavioral health services are covered they must be in full parity with physical health services. Because New York State’s statutes actually do require that behavioral health services be covered, therefore, such policies must ensure full parity for such behavioral health services under the federal parity law. In tandem, the original federal and state parity laws and the ensuing laws passed since, including but not limited to the Affordable Care Act and the 2021 Consolidated Appropriations Act at the federal level, strive to achieve the full implementation of parity.
Yet, the promise of parity remains unfulfilled. The lack of compliance by insurers and health plans inhibits and delays access to care and treatment amidst an extraordinary mental health crisis, particularly among our youth. These laws have required insurers and health plans to cover mental health and substance use disorder care at the same level of access and benefits as physical health, and not impose financial requirements or treatment limitations that are more stringent than those for physical conditions. Full compliance with behavioral health parity laws will have a positive impact, not only on the health of New York’s residents, but also would reduce the state’s health and Medicaid expenditures.
MHANYS commends the New York State Office of Mental Health for its recent analysis of Medicaid Managed Care plans’ non-quantitative treatment limitations, which showed improved adherence to applicable laws and regulations with citations issued for corrective actions.
MHANYS Recommendations:
- Establishment of a centralized cross-agency unit working on parity enforcement and compliance, including audits of insurers and Managed Care plans, coordinating enforcement actions and sanctions, reviewing data collected and reported publicly, and issuing guidance to enhance compliance. Enforcement is the cornerstone to helping New York State achieve the full promise and implementation.
- Additional information around the $1 million appropriation in the FY 2025-26 budget for compliance monitoring to understand if this appropriation is sufficient.
- MHANYS urges the Executive to review the gaps created by the pause of the federal parity enforcement regulations, review New York State law and regulations, and consider including provisions in the FY 2026-27 Executive Budget to address gaps that should be filled. One legislative proposal MHANYS supports in concept is S8426-A by Senator Brouk/A8839 by Assemblymember Simon, which seeks to codify the protections the federal regulations sought. MHANYS is reviewing this legislation in greater detail but urges the Executive to consider including it in the FY 2026-27 Executive budget.
- Support the establishment of task force consisting of not only representatives of the Department of Health, the Department of Financial Services, the Office of Mental Health, the Office of Addiction Services and Supports, as well as the New York State Office of Attorney General but also of relevant stakeholders, including but not limited to mental health consumer advocacy organizations, providers, insurers/health plans. The task force should hold public hearings and forums around New York State (similar to the 5.07 plan meetings) to collect testimony on the current trends, issues, and challenges with compliance and achieving the full implementation of the parity laws. After 20 years, we owe it to New Yorkers to undertake a complete review to understand the progress but also illuminate the remaining gaps and challenges with a plan to act swiftly.
3) Workforce: Creation of Credentialed Mental Health Support Specialist, Expansion of the use of Peers
New York State’s behavioral health and human services not-for-profits and the state’s public mental health system are facing a workforce crisis. The demand for mental health and substance use disorder services has never been higher, yet adults, children, and families are facing waitlists, limited access to care, and a workforce that is struggling to meet the growing need, despite New York State’s commitment to supporting these services. New York must make meaningful investments to close treatment gaps, eliminate disparities, and improve access to services by making investments in the workforce and addressing inflated operating expenses that service providers must pay. In addition to funding cost-of-living adjustments/targeted inflationary increases that at least meet the CPI, New York needs a pipeline of individuals entering the workforce, which is why the creation of the credential of mental health support specialists and expansion of use of peers is so imperative. New York faces shifting demographics and fewer individuals graduating from high school in the next decade. This will exacerbate the workforce challenges.
While OPWDD and OASAS both have credentialed paraprofessionals, the mental health system currently does not. New York State is also an outlier as other states have established a credential for mental health paraprofessionals. The establishment of this credential would provide an entry level professional role into the public mental health system and career ladder that would assist with recruitment and retention challenges. These paraprofessionals would help with the workload by handling tasks that are not within the scope of practice or work of licensed professionals or peers. The list of tasks includes: assist client skill development; conduct housing inspections; provide transportation for clients; support with employment, job searches, and accommodations; engagement and family support; psychiatric rehabilitation assessment; recovery planning; crisis intervention; implement non-clinical elements of care plans; service planning and coordination; psychoeducational interventions; support in health management, social activities, and community integration; maintain documentation, comply with regulations; collect information for functional status screenings and eligibility determinations, and provide advice and guidance on day-to-day problems.
As important is the expansion of certified peers who bringing important lived experience into their roles with an ability to build a sense of trust that is paramount for reaching out to individuals in need and linking them to services and supports.
MHANYS Recommendations:
- Proceed expeditiously with the creation of the Credentialed Mental Health Support Specialist
- Review regulations and guidance to maximize use of peers
- Develop links between Credentialed Mental Health Support Specialists and tuition free community colleges for individuals interested in careers in mental health
4) Community College
On August 12th Governor Hochul had a press event where she highlighted the new budget initiative that provides tuition free programs at SUNY and CUNY for various disciplines. Mental health professions were not mentioned. There was a broad mention of nursing and allied health fields. We would urge clarification to insure that allied health fields include mental health.
MHANYS Recommendations:
- Get clarification to ensure that allied health fields include mental health as part of tuition free community colleges
- Advocate with Department of Labor to expand the list of high demand fields to include programs leading to certification and degrees in the mental health field
5) Employment
Expansion of employment opportunities for persons with serious mental illness will not only have significant benefits for persons with mental illness, but also save state dollars in many other areas. Among the many advantages of an individual being meaningfully employed include:
- personal financial stability and funds to pay for daily living expenses,
- funds for housing or improved housing, thereby reducing the need for state-funded community residence beds, other state subsidized housing, and reducing homelessness,
- employer health insurance, rather than Medicaid,
- sense of purpose, personal self-confidence and self-esteem,
- meaningful work can improve one’s outlook and overall mental health,
- reducing isolation, expanding social interaction, creation of a social network with fellow employees,
- the development of skills that can translate into other more meaningful employment opportunities,
- reductions in need for SNAP and state safety net expenses,
- intuitively we believe that stable employment would reduce interactions with law-enforcement for persons with mental health issues.
MHANYS Recommendations:
- Tax credits for employers that hire individuals with mental health challenges
- Utilize Medicaid Buy-In more broadly to insure that individuals who are employed do not lose their Medicaid benefits
- Support the efforts of the New York State Office of Mental Health in creating a website in concert with the New York State Department of Labor that will list job posting available in New York for individuals interested in pursuing careers in mental health
6) Expansion of Telehealth
MHANYS has long supported the expansion and use of telehealth for the treatment of mental health and substance use disorders. This includes expansion of coverage of telehealth, including audio-only, under Medicaid and commercial insurance and health plans and the requirement for parity in reimbursement for telehealth visits.
The use of telehealth offers many benefits including the need for bricks and mortar facilities would be reduced, saving construction and renovation costs, as well as facility maintenance costs. Telehealth would improve services in areas where there are significant transportation issues such as rural areas and inner cities, and also have been proven to reduce missed/no-show appointments thereby enhancing compliance with treatment plans.
For some patients, it would expand the number of services received because using a FaceTime telehealth service is much easier and convenient than taking a bus or other transportation to a physical location. Telehealth would significantly assist in recruitment and retention because professionals and other employees would have more flexibility from where they provide services. Also, a portion of savings from reduced construction, renovation and facility upkeep costs could be used to improve salaries and/or fringe benefits.
Despite progress made in eliminating the stigma surrounding mental health and substance use disorders, many are apprehensive of entering the office of a psychiatrist, mental health professional or clinic. Telehealth provides an alternative for individuals to access care where they might have otherwise delayed or forgone treatment until reaching a crisis point and requiring a higher level of intervention and treatment in an inpatient setting.
A report issued last week by the New York State Comptroller recommended the expansion of telehealth to address workforce issues and access to care challenges, particularly in rural areas in particular.
MHANYS Recommendation:
- Review OMH’s regulations regarding use of telehealth and remove any barriers that inhibit its use and reimbursement
7) Revenue Raised From Casino Gaming: Investing in School Mental Health
Constitutionally New York State has an edict to provide lottery proceeds to the New York State Department of Education. No such provision exists for casino gambling. A good use of proceeds for casino gambling is for youth mental health in schools. It is consistent with the lottery proceeds that currently go to education. Youth mental health has been a priority of Governor Hochul since she has taken office. A similar funding stream for casino gambling dedicated to mental health could bring in millions of dollars for school mental health education. As we contend with a youth mental health crisis, we must do more to invest in school mental health literacy and access to services.
MHANYS Recommendation:
- Since there is no need for a constitutional amendment, create a budget item that provides a discretionary amount of money to the New York State Office of Mental Health from proceeds of casino revenue.
8) Regulatory Waiver Reform
Pursuant to 14 NYCRR Part §501.3, the Commissioner is authorized to grant a waiver of an OMH regulation that is not otherwise required by State or Federal law. Under the regulation, the Commissioner is permitted or grant a waiver of regulatory requirement under the following conditions:
“(i) the rights, health and safety of clients would not be diminished; (ii) the best interests of clients would be served; (iii) the benefits of waiving the requirement outweigh the public interest in meeting the requirement; and (iv) the purpose of the request is to implement/test innovative programs that may increase the efficiency or effectiveness of operations, to provide additional flexibility to better meet local service needs while maintaining program quality and integrity, or other purposes deemed appropriate by the Commissioner.”
Over the years, many providers have applied to OMH for these waivers for significant reasons and received approval. OMH should review the waivers granted on a singular basis to see if such waivers can be granted on a more systemic basis to similar situated providers. These waivers could provide needed relief to providers without impacting patient care amidst the dire fiscal circumstances confronting New York State and providers.
MHANYS Recommendations:
- Undertake comprehensive review of approved waiver applications to determine if there is systemic relief that should be granted to similarly situated providers.
- Establish a workgroup that includes community providers to review these recommendations with a focus on savings, unnecessary regulatory burden, and elimination of redundancy.
