Mental Health Update

Earlier this week, we sent out an update on the ‘top of the trees’ budget narrative on behavioral health in the State Budget.  Listed below is a deeper dive from our Counsel, John Tauriello on behavioral health impact across the divide of health care and behavioral health.

We are incredibly supportive of many of the Governor’s initiatives especially around teen mental health first aid. We truly believe that training will be a generational initiative that will change the lives of young people and help eradicate the stigma of mental health issues.  We are also supportive of the Governor’s–First Responder Behavioral Health Center of Excellence. This will create a peer to peer and innovative practice model for our first responders.  It is desperately needed and we applaud the Governor for including it in the budget.

There are several other initiative we support including integrated behavioral health licensure certification and gaming insurance addiction coverage as well as necessary funding for the Joseph P. Dwyer veterans peer to peer initiative, the innovative peer driven INCENT teams, funding increases for 988, funding increases for CTI  and SOS teams and the Mental Health/OASAS ombuds program.

There are also several initiatives that we are opposed to including the so called ‘pre authorization’ of mental health and other medications.  An individual in concert with their prescriber should make their medication decision, it should not be based on an insurance plan formulary. In addition, we are concerned about the proposed cuts to residents programs in adult homes. Cuts to the EQUAL program and the Adult Home Residency advocacy program makes no sense. These program are value added by giving adult home residents a voice in their decision making process and helping to support them when they transition to other community and housing programs.  These programs need to be restored in the 30 day amendment process.

We have also discussed our concerns about the 1.7% TII (formerly COLA) increase falling short of the CPI of 2.7% and that the Medicaid Managed Care Carve Out was not included in the proposed budget.

Lots of important work ahead.

The 2026-27 State Fiscal Year Executive Budget proposal is for a $260 billion budget (all funds), an increase of $1.6 billion or 0.7% from the mid-year revised spending. State operating funds are proposed to rise to $157.4 billion, an increase of $8.6 billion.  The State Operations increase is based on reduced federal support for the administration of health, food and other programs. The Governor’s Medicaid and School Aid recommendations account for 65% of the spending increases:

While balanced for this fiscal year, any out year budget gaps that may occur are expected to be lower compared to the levels projected in the FY 2026 Mid-Year Update to the Financial Plan. If the FY 2028 Budget is balanced with recurring savings, the budget gaps for FY 2029 and FY 2030 would be reduced to $3 billion in FY 2029 and $6.5 billion in FY 2030. The Overall breakdown provided in the Budget Briefing Book shows:

I. Aid to Localities Appropriations

• New Funding for Youth Mental Health Programs/Initiatives: The FY 2027 Executive Budget includes over $20 million to bolster the State’s youth mental health framework. This includes an investment of $17.5 million to expand the Teen Mental Health First Aid Training program to all tenth grade students statewide, $1.8 million to ensure access to behavioral health services for LGBTQ+ youth, $664,000 to ensure Indigenous students have access to mental health care, $500,000 to increase the number of youth safe spaces programs, and $100,000 to recognize schools responding to youth mental health needs. The Executive Budget also directs OMH to develop a framework for evidence-based care for professionals working with children.
• Behavioral Health Supportive Housing Programs. The FY 2027 Executive Budget includes $65 million to increase rates for OMH supportive housing programs to ensure that providers have sufficient resources to maintain housing capacity, avoid costly emergency room visits and inpatient care, and support recovery. This includes $38 million to increase stipends for scattered-site Supportive Housing units and $26.8 million to increase rates for Single Room Occupancy (SRO) units.
• Proposes to retain $18 million for community mental health loan repayment.
• Proposes $83 million for Safe Options Support teams, Critical Time Intervention Teams and CPEPs; an increase of $3 million
• Maintains $2.8 million for Intensive and Sustained Engagement Teams (INSET)
• Maintains $8 million for the Joseph P Dwyer Veteran Peer to Peer Program
• Maintains $74 million for reinvestment from the managed care systems
• Maintains $8.5 million for MH/SUD ombudsman program and parity implementation and enforcement
• Adds $1.8 million for 9-8-8 earmarked for LGBTQ+ call-line support
• Adds $1 million for a First Responder Behavioral Health Center of Excellence in OASAS
• $22.5 million for the indigent care expenses of Certified Community Behavioral Health Clinics

II. Analysis of Article VII Health and Mental Hygiene Provisions

Part A: Medicaid Global Cap Extender:
The Medicaid global cap would be extended for an additional year, through fiscal year 2027–28.

Part B: Various Health related extenders:
Section 1.  Would extend the sunset of the Medicaid managed care program for a six-year period, until March 31, 2032.

Section 20. Telehealth Parity: Would extend payment parity for both Medicaid fee-for-service and managed care services, whether they are provided in-person or via telehealth, for two more years through April 1, 2028.

Part E: Elimination of the EQUAL Program
This Part would discontinue the Enhanced Quality of Adult Living Program (EQUAL Program). This program is designed to enhance the quality of life and living conditions of persons residing in adult care facilities, including adult homes. It is designed to improve and expand services and enhance the physical environment of these homes. Among the services and benefits funded by EQUAL include: providing needed clothing, resident training, improved food quality, expanded recreational activities, and capital improvements.

Part F (Section 4): Prescription drugs: Preferred drug list
This provision would amend requirements regarding the ability of prescribers to prescribe a drug that is not on the Medicaid “preferred drug list.”  It would require prescribers to consider “other clinical indications” identified by the “Drug Utilization Review Board,” rather than the “committee for the patient’s use of the non-preferred drug.” Under this section of law “other clinical indications” include considerations of the medical needs of special populations, including persons with mental health conditions, and persons with an opioid use disorder.

(Note: While this amendment is described “as a technical amendment,” it’s impact is not immediately clear and we will need to do further research to determine whether this change may impact prescribers’ ability to prescribe psychiatric drugs that are not on the preferred drug list.)

Part L (Section 2):  Medicaid Buy-In.
This provision would amend the Medicaid Buy-In Program for working persons with disabilities by amending the premium structure that must be paid by certain beneficiaries. The current premiums for persons whose net income is over 150% of the federal income poverty line, is $25 per month for an individual, and $50 per month for a couple (when both are eligible for Medicaid). The new premium structure, would be up to 3% of net earned income and 7 ½% of net unearned income, subject to federal approval.

Part M: Medicaid Managed Care Proposals:
Section 1. This provision would amend payments made to dually eligible individuals who have Medicaid/Medicare crossover claims, by eliminating exceptions for services provided by licensed psychologists and ambulance services

(Note: This may result in increased bills for such services.)

Sections 4-9: These provisions would repeal subdivision 4 of section 364-i of the Social Services Law, to eliminate presumptive Medicaid eligibility for children under age 19 who reside in lower income households, until a full Medicaid application review can be completed.

Section 13: This section would repeal continuous Medicaid and Child Health Plus eligibility for children under the age of six. (Currently, children under the age of six, who are determined to be eligible for Medicaid, shall continue to be eligible for 12 months after the eligibility determination or renewal, or until the last day of the month in which the child reaches age of six. Such eligibility continues without a redetermination of eligibility, to the extent consistent with applicable federal requirements.)

(Note: A proposal to carve out mental health services from Medicaid Managed-care was not included in the Executive Budget proposal.)

Part N: Expanded scopes of practice
This Part would expand the scopes of practice of medical assistants, certified medication aides, nurse practitioners, and physician assistants, under certain circumstances.

These provisions also would transfer the authority to enforce medical misconduct, as well as certifying the qualifications of professionals who own and operate medical entities, from the State Education Department to the Department of Health.

Part P: Targeted inflationary increase (TII) for community-based human services providers:
This Part would increase the targeted inflationary increase (formerly known as COLA) for mental hygiene and other human services providers for the 2026–2027 fiscal year by an additional 1.7%. This increase is unrestricted and applies to state payments, contracts, or “any other form of reimbursement for programs and services,” including Medicaid rates.

The total cost for this TII is $176 million.

Part Q: Integrated Behavioral Health Services Programs:
A new section 36.08 would be added to the Mental Hygiene Law to authorize the Commissioners of OMH and OASAS to jointly license “integrated behavioral health services programs.” These joint licenses would be a single licensed per provider.

The Commissioners shall promulgate joint regulations necessary for establishment, licensing, and operation of these programs. Also, the Commissioners would be authorized to establish rates for these services.

Part R: Gambling addiction insurance coverage:
Amendments would be made to the state Insurance Law to provide the same level of insurance coverage and protections for persons with gambling addictions as are provided for those with substance use disorders.

Part S: Eliminate the Adult Home and Residence for Adults Resident Advocacy Program.

This proposal would repeal section 553 (10) of the Executive Law, to eliminate the Adult Home Advocacy and Adult Home Resident Council, which provide legal assistance and protection of rights for persons residing in impacted adult homes, i.e., those with large numbers of persons with mental health needs or histories. This program is currently located within the Justice Center for the Protection of People with Special Needs.