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Mental Health Update

May 2, 2023
Mental Health Update

Summary of the 2023-24 Health and Mental Hygiene Budget Legislation

While yesterday our sole focus was on the COLA for the not for profit workforce, today we are providing a full breakdown of the Health and Mental Hygiene Budget.  Listed below is MHANYS Senior Advisor, John Tauriello’s budget review.  Among the highlights are several parity provisions that passed the final budget (including allowing  commercial plans to be paid the same rate as Medicaid for School Based Mental Health Clinics), the inclusion of a Daniel’s Law Task Force, Maternal Mental Health Provisions and unfortunately the elimination of the Credentialing of the Qualified Mental Health Associate Title (we voiced our strong support for the Title).

Below is a summary of the provisions of interest to the mental health field in final 2023-24 Health & Mental Hygiene Budget legislation.




Medicaid Global Cap:

   Part A, Page 13:  This Part would extend the Medicaid Global Cap through March 31, 2025

Senate:  Would repeal the Global Cap.

Assembly: Would agree to a one-year extension of Global Cap.

Final Part A: Agrees with the Governor’s proposal to provide a one-year extension of the global cap through FY 2024–25. 


Prescriber Prevails:

Part D, p. 89 Would eliminate a prescriber’s ability to make a final determination of when a drug’s use is or is not clinically supported under the Medicaid program.

  Senate: intentionally omitted this Part.

Assembly: intentionally omitted this Part.

Final Part D: intentionally omitted this part.


 Rural Hospital Conversions:

 Part E, Section 3, page 185: Rural general hospitals with inpatient units that plan to convert to a “rural emergency hospital,” shall provide a community forum to receive public input on the anticipated impact of the hospital inpatient unit closures, and options to ameliorate anticipated impacts. Hospitals with psychiatric inpatient beds, must notify OMH and the local Director of Community Services of such conversions, and hospitals with inpatient SUD treatment services must notify OASAS.

Senate Agrees with the Governor’s proposal

  Assembly: Intentionally omitted this section.

  Final Part E: As in the Governor’s bill, rural general hospital conversions to rural emergency hospitals will require notification to OMH and the local Director of Community Services if there is an inpatient psych unit in the converting  hospital, and OASAS must be notified if there is a inpatient SUD program in that hospital. 


Managed long term care reform:

Part I, page 220. This part would extend, for a four-year period, the moratorium on approval of new managed long term care (MLTC) plans. During the moratorium existing plans are required to meet certain performance standards and if such standards are not met, DOH has the authority to select new MLTC plans through a competitive bidding process.  Importantly, DOH must consult with the Commissioners of OMH, OASAS, OPWDD and the Office of Children and Family Services in developing the content and criteria for the competitive selection process (see p. 227).

  Senate would extend the MLTC plan moratorium for a four-year period, but rejects many related provisions and does not require DOH to consult with OMH, OASAS, OPWDD or OCFS in developing the competitive bidding process.

  Assembly would extend moratorium for a four-year period, but omits some performance standards, and does not require DOH to consult with OMH, or other state agencies in developing the competitive bidding process.

 Final Part I:  The moratorium on new or expanded MLTCP’s will be extended through March 31, 2027. As in the Governor’s bill, MLTCPs that are classified as a “poor performer” by CMS, or have an excessive volume of penalties, deficiencies, sanctions or enforcement actions, shall not be eligible for a contract.  The final agreement does not authorize DOH to re-bid for the continuation of existing certificates of authority and therefore requirements in the Governor’s bill to consult with OMH and other state agencies are not included  in the final bill. 



Managed-care reforms “Pay and Resolve”

Part J, page 247.  This Part generally would require health plans to pay claims for in-network hospital emergency services and resulting inpatient admissions, before determinations of medical necessity are finalized. The hospital would be required to refund overpayments to the health plan only if services are ultimately determined not to be medically necessary or emergent.

Senate: Part J was intentionally omitted.

Assembly: Part J was intentionally omitted.

Final Part J:  intentionally omitted.



Medicaid Waiver, eligibility expansion:

Part K, page 256. This Part would expand Medicaid services to incarcerated persons and persons in psychiatric hospitals (i.e., IMD‘s) to align state law with the health equity reform 1115 waiver amendment that was submitted by the State to CMS last year.  This expansion would be subject to the Federal waiver approval.

Senate: Includes this amendment to provide expanded Medicaid services for incarcerated persons and persons in IMDs as may be permitted but would include a requirement to convene a workgroup to study and report on applicable issues.

 Assembly: Would include expanded coverage to incarcerated persons but does not include this expanded Medicaid coverage to persons in IMDs. 

  Final Part K: Consistent with the Governor’s proposal, includes limited authority for Medicaid to reimburse for services received in correctional facilities AND in institutions for mental diseases (IMDs), to the extent consistent with a federally-approved 1115 waiver,  and as long as FFP is available for such expenditures. 



Expansion of Medicaid Buy-in Program: 

Part N, page 288. Subject to federal approval, the Medicaid Buy-In Program would be expanded by increasing both the resource and income limits from 250% of the federal poverty limit to 2250%. Persons above the 250% level would pay a premium, based on a sliding scale.  The current age limitation of 65 would be removed, thereby including all otherwise eligible people who are 16 years of age or older. However, the program would be capped at 30,000 eligible participants. The stated intent is to allow more working people with disabilities to enter the workforce without fear of losing health/Medicaid benefits.

This Part would be effective on January 1, 2025 and will cost $60M annually. 

  Senate: Includes this Part.

Assembly: Accepts expansion of Medicaid Buy-in, but also imposes limitations on monthly premium payments to ensure parity with the ACA (e.g., the monthly premium for someone earning 500% or more of the applicable federal poverty line shall be $1148, but shall not exceed 8.5% of person’s monthly income).

Final Part N:  As in the Governor’s budget proposal, the final agreement expands the Medicaid Buy-in for employed, severely disabled persons over the age of 16, with a sliding scale premium that starts for those whose income exceeds 250% of the federal poverty line.  As in the Governor’s proposal, the expanded Buy-in a program would be capped at 30,000 eligible participants.



Transformation V, health care capital funding:

Part P, page 320. This Part would establish the 5th Transformation healthcare capital funding program, totaling $1 billion new dollars. Similar to the last round of Transformation, programs licensed or funded by OMH and OASAS would be eligible for such grants.

Up to $500 million would be awarded without competitive bid for traditional capital projects  “to build innovative, patient-centered models of care, increase access to care, to improve the quality of care, and to ensure financial sustainability” of providers.  An additional $500 million would be available for “technological and tele-health, transformation projects.

Senate: Increases the pool by $200M to a total of $1.2 billion and Includes up to $700M for capital projects, including the development of service capacity in underserved areas, and including at least $150M of the $700 M shall be set aside for a broad range of community based health and behavioral health services.

$500M would be available for technological and tele-health transformation projects, “which shall include projects related to improving cyber security” of which at least $100M would be made available to a broad range of community-based providers, including behavioral health providers

  Assembly: Includes $1 billion funding for such Capital Projects. At least $50 million in the Assembly bill must be awarded to community based health and/or mental hygiene providers.

Final Part P: Includes a total of $990M for the healthcare facility transformation program, and continues to include behavioral health programs licensed or funded by the “O” agencies. 

Expands the types of programs eligible for funding beyond traditional Capital projects to also include “debt retirement, working capital or other non-capital projects that facilitate furthering transformational goals.”

As in the Governor’s bill, $500 million of the $990M would be set aside for “technological and telehealth transformation projects”, including projects related to improving cyber security.


Expanded Medicaid authorization to certain mental health practitioners:

Part Q, Section 2,  page 324. This Part would expand behavioral health services by authorizing Medicaid reimbursement for licensed mental health counselors and licensed marriage and family therapists.   Effective January 1, 2024.

  Senate: Includes Part Q.

Assembly: Modifies the Governor’s proposal to also include licensed creative arts therapists.

Final Part Q: Authorizes Medicaid reimbursement for services provided by licensed mental health counselors and licensed marriage and family therapists. 


Interstate Medical licensure compact, and the nurse licensure compact:

Part W, section 30, page 374 and section 31, page 399. 

These interstate compacts would allow physicians and nurses to be licensed in multiple states through a streamlined process, and provide an enhanced ability to provide services across state lines.

Senate: intentionally omitted.   

  Assembly: intentionally omitted.

Final Part W: omitted from final budget. 


State Oversight of the Professions: 

 Part CC, page 489. This Part would transfer the oversight of licensed health and mental hygiene professionals from the State Education Department to the Department of Health.  (A similar proposal was rejected by the legislature last year.)

Senate: intentionally omitted part CC.

  Assembly: intentionally omitted part CC.

Final Part CC: intentionally omitted part CC.


COLA for Human Services Providers:

Part DD, page 1048. This part would provide a 2.5% cost-of-living adjustment (COLA) for fiscal year 2023-24 for community-based human services providers, including OMH and OASAS licensed and funded behavioral health programs. (It should be noted that 2.5% is significantly below the 8.5% rate of inflation, as determined by the applicable Consumer Price Index – Urban, (CPI-U) published by the Bureau of Labor Statistics of the federal Department of Labor.)

Senate: Provides for an 8.5% COLA in fiscal year, 2023–24, and would authorize a prospective annual COLA equal to the CPI –U from the previous July.

 Assembly: includes the 8.5% COLA, but does not provide for a prospective annual increase based upon the CPI – U.

Final Part DD: Includes a 4% COLA for the fiscal year 2023–24.  There is no authority for future fiscal year COLAs. 


Credentialing of Qualified Mental Health Associates:

Part GG, page 1055.  This part would create a new “qualified mental health associate“ credential for certain paraprofessionals who provide mental health services, including counseling and supportive assistance to persons with mental illness and their families. OMH would establish approved courses of study, requirements for on-the-job experience, and other criteria for credentialing. Effective immediately upon enactment.

  Senate: intentionally omitted part GG.

Assembly: intentionally omitted part GG.

Final Part GG: Part GG was intentionally omitted.    


CCBHCs – certified community behavioral health clinics:

Part HH, page 1057.  This part would authorize OMH and OASAS to jointly license certified community behavioral health clinics (CCBHCs).

A new “Indigent Care Program” also would provide state funds to qualified providers (a minimum of 3% of visits must be persons who are uninsured), that suffer losses due to uncompensated care ($22.5M available in July 1, 2023- June 30,2024).  If Federal share is not available, payments will be limited to State share only payments.

Effective immediately upon enactment. 

   Senate: Includes Part HH. 

   Assembly: Includes Part HH but rejects proposal to authorize OMH and OASAS to receive criminal history information. Also, the Assembly would increase funding for the indigent care program by $10 million/year.

Final Part HH:  Part HH with minor amendments was included in the final budget. Those amendments would authorize the Justice Center to receive criminal history information and to facilitate a single process, jointly with OMH and OASAS, to review criminal history and make suitability determinations for prospective employees or volunteers at CCBHCs. 


Parity/insurance reforms for behavioral health services:

Part II, page 1063. This part would amend the Insurance and Public Health Laws to improve reimbursement for behavioral health services through both commercial insurance and Medicaid reimbursements.  Part II includes six Subparts A-F, as follows:

   Subpart A: Effective January 1, 2024, expands required minimum inpatient hospital coverage to include “sub-acute care in a medically-monitored residential treatment facility.”  Minimum requirements for outpatient care coverage is expanded to include mobile crisis intervention services (without pre-authorization, and regardless of in network participation); outpatient care coordination services, and critical time intervention services and ACT services provided by facilities under the jurisdiction of OMH following discharge from the hospital or ER.

This subpart also would require reimbursement for Article 31 licensed school-based mental health clinic services, at negotiated rates or no less than the applicable Medicaid rate and without regard to network participation status. Insured persons shall not be charged for school-based clinic services (except for copayments, coinsurance, or deductibles under the terms of their policy).   Effective January 1, 2024, applicable to policies or contracts issued, renewed or amended after that date. 


   Final Subpart A:  Subpart A was included in the final budget, with the following amendments applicable to commercial health insurers:

  – Expanded the Governor’s Subpart A by requiring commercial insurers (in all policies that include inpatient care coverage) to cover mobile crisis intervention services provided under the jurisdiction of DOH and  OCFS (the Governor’s proposal was limited to mobile crisis services provided under the jurisdiction of OMH and OASAS). 

  – Added a provision that the new minimum requirements for coverage for follow up outpatient care under this subpart shall be required to commence “no later than 30 days following discharge” from an OMH licensed or operated hospital or the emergency department of a general hospital. 

  – The definition of “assertive community treatment services” is amended to eliminate the requirement that such ACT services be “designed for an individual with a serious mental health condition who is at risk for hospitalization,” and adds a provision that such services shall be primarily provided by a multidisciplinary mental health treatment team licensed by OMH.

  – The definition of “critical time intervention services“ is amended to require that such services shall be provided by an OMH-licensed provider.

–   Requires that care coordination services provided to persons discharged from hospitals or ER‘s after discharge shall continue “until the insured is stabilized.“

 – A new definition of “residential facility“ is added and defined to include crisis residence facilities and OMH-licensed community residences for eating disorders. 

 – Explicitly provides that commercial insurance coverage for mobile crisis intervention services must include the following mental health and SUD services: (1) telephonic crisis triage and response; (2) mobile crisis response to provide intervention and facilitate access to other behavioral health services; and (3) mobile and telephonic follow-up services after the initial crisis response until the insured is stabilized.

  – Clarifies that mobile crisis coverage is not limited to persons who are experiencing a behavioral health crisis, but also includes those who are at “imminent risk of experiencing” a behavioral health crisis. Also, provides that a behavioral health crisis, shall include “instances in which an insured cannot manage their primarily psychiatric or substance use related symptoms without de-escalation or intervention.” Further clarifies that mobile crisis intervention services providers may not charge or seek any reimbursement from an insured, except for in-network copayments, coinsurance or deductibles for which the insured is responsible under the terms of the policy. 


   – Finally, Subpart A also includes the provisions in the Governor’s bill which require that reimbursement rates, for outpatient care provided at OMH-licensed school-based mental health clinics, shall be at a negotiated rate or at the Medicaid rate. 

   Subpart B: Generally prohibits insurers from performing pre-authorization or concurrent reviews within the first 30 days of Mental Health inpatient or residential care, but the provider must notify the insurer of the admission and treatment plan, within two days of admission, must perform daily clinical reviews, and must participate in consultations with the insurer. Exceptions would be made allowing concurrent reviews of individuals who meet clinical criteria, where admission is at a facility designated by OMH for concurrent review, in consultation with DOH and DFS.  OMH-designated medical necessity criteria would be required to be used by insurers, as well as evidence-based and age-appropriate clinical review criteria approved by OMH, in consultation with the Division of Financial Services and DOH.     This subpart shall become effective one year after it becomes law.

Final Subpart B:  Expands Subpart B pre-authorization prohibitions to apply to all  “crisis residence facilities” licensed or operated by OMH. Under the Governor’s bill  only medically- monitored crisis residential facilities had prohibitions against pre-authorization.

   Sections 4 and 5 of Subpart B from the Governor’s bill were intentionally omitted from the final bill – these sections would have required commercial insurers to use clinical review criteria designated by OMH in consultation with DFS and DOH, for utilization review and level of care determinations.

   Subpart C: Payment parity will be required for tele-health services provided by providers licensed by OMH, 0ASAS, or OPWDD, without regard to the physical location of the attending practitioner or the patient.  Effective immediately upon enactment and applicable to claims submitted on or after such date.

  Final Subpart C: Subpart C was intentionally omitted.  

  Subpart D: Insured persons would be authorized to bring private legal actions to address state law parity violations. Penalties would equal damages or $1000, whichever is greater.   Effective immediately upon enactment.

Final Subpart D: Subpart D was intentionally omitted.   

   Subpart E: Would prohibit prior authorization of detoxification or treatment of substance use disorders, including buprenorphine and opioid overdose reversal medications.  Effective immediately and applies for policies, issued, renewed, amended, or modified after such date.

  Final Subpart E: Subpart E was included. 

   Subpart F: Finally, the bill would require the promulgation of regulations to ensure adequate provider network access for mental health and substance use disorder services.  These requirements shall include appointment availability standards for initial and follow up visits, time and distance standards that take into consideration reasonable proximity to the enrollee’s residence, established service delivery patterns, the geographic area, and the availability of telehealth services.

In addition, minimal referral and reimbursement requirements are required for out-of-network services provided by OMH or OASAS licensed providers, at no less than the applicable Medicaid rates in effect.  Effective immediately upon enactment.   

Final Subpart F:  Subpart F was amended to provide that the Superintendent of DFS, in consultation with the Commissioners of Health, Mental Health, and Addiction Services and Supports, shall propose regulations setting forth standards for network adequacy for mental health and SUD treatment services, including: ”sub-acute care in a residential facility, assertive community treatment services, critical time intervention services, and mobile crisis intervention services.“ However, unlike the Governor’s bill, the final language does NOT specify in detail that the regulations must include standards for:  timely access, appointment availability standards, time frames for visits and follow-up visits, time and distance standards, and in-network cost sharing rates, etc. 

Such regulations must be proposed by December 31, 2023. 

   Similarly, the Commissioner of Health shall propose network adequacy regulations for the above-referenced mental health and SUD treatment services, in consultation with DFS, OMH, and OASAS, by December 31, 2023.


Penalties Increased for Mental Hygiene Law violations:

Part JJ, page 1095. This Part would increase the ability of OMH to impose greater penalties to help ensure providers comply with applicable law or the terms of their operating certificates. Penalties are increased from $1,000 to $2,000 per violation, the $15,000 penalty limit per day would be eliminated, and penalties may be considered “at the individual bed level for beds closed without authorization” in inpatient settings.

(It is believed that this Part has been included to provide OMH with greater tools to ensure that general hospitals that closed inpatient psychiatric unit during the pandemic, will reopen such units.)   Effective immediately upon enactment.

Senate: Includes Part JJ and would also include mitigating factors for those hospitals as a defense, including: government declared emergencies, unforeseen disasters, catastrophic events, and the frequency and nature of noncompliance. However, the inability to secure proper staff is not a defense if it is foreseeable and prudently could be planned for.

Assembly: intentionally omitted Part JJ.

Final Part JJ: Includes authorization for the Commissioner of Mental Health to impose greater civil penalties for holders of OMH operating certificates who violate the terms of an operating certificate or applicable law. Penalties may be imposed of up to $2,000 per day or up to $25,000 per violation. Also penalties may be considered “at the individual bed level for beds closed without authorization” at inpatient settings. 

  New language also provide that civil penalties imposed under this section of law shall account for factors, including:  officially declared emergencies, unforeseen disasters, or catastrophic events, as well as the frequency, duration, scope, and nature of noncompliance. 

  Further, for violations of the terms of operating certificates, it shall not be a defense that the operator was unable to secure proper staff or other necessary resources, if such needs were forseeable and “could be prudently planned for or involved routine staffing needs.”


Daniel’s Law Task Force:

New Part OO

   OMH in collaboration with OASAS shall establish a 10-member Daniel’s Law task force to study crisis responses and diversion for persons experiencing a mental health, alcohol use, or substance use crisis in the state. The task force shall host at least three Statewide town halls. 

   OMH shall prepare a written report, summarizing the opinions and recommendations of the task force regarding the effectiveness of crisis response and diversion programs in the state, and make recommendations for expansion of such programs, while limiting arrests or incarcerations. The report shall be submitted to the Governor and he Legislature by December 31, 2025. 

  $1M is appropriated in the Aid to Localities Budget for the operation of the task force.


Maternal Mental Health Workgroup:

New Part PP  

   A Maternal Mental Health Workgroup shall be established within OMH. In addition to representatives from state agencies, the workgroup shall include representatives from “statewide mental health organizations, maternal healthcare provider organizations, healthcare provider organizations, the health insurance industry, and communities that are disproportionately impacted by under diagnoses of maternal mental health disorders.  

  A final report containing recommendations related to maternal mental health and perinatal and postpartum mood and anxiety disorders shall be submitted to the Governor and the Legislature no later than December 31, 2024. 

  $250,000 is appropriated in the Aid to Localities Budget for this workgroup.