Over a decade ago, mental health and substance use disorder services were moved into Medicaid managed care. This has resulted in a broken system, which is highly inefficient, hampers access to essential services for New Yorkers and allocates scarce resources to health insurance plan middlemen which provide no value and have devastated this system of care.

Under the Medicaid managed care model there are long waiting lists for behavioral health services in many communities across New York and payments to the providers who are rendering these lifesaving services are being denied or delayed by health plans. This, while providers are facing increased costs and struggling to retain their workforce. There have been over 300 citations by state agencies against these insurers for violations and the State Attorney General found most health plans listed false or “ghost” provider networks to their enrollees seeking mental health and addiction care.

Enough is enough. The state is wasting taxpayer dollars by paying these insurance middlemen. New York State can save $400 million per year by removing OMH and OASAS outpatient, rehabilitation, and residential services from the state’s Medicaid managed care program and moving billing for these services back to fee for service. This critical move will open up access to care by ensuring Medicaid members with managed care are not limited to receiving services from only those community agencies that have a contract with the Medicaid member’s insurer.

In under a month, Governor Hochul will release her Executive Budget for state fiscal year 2027. Please take action now to tell her that New Yorkers can no longer wait for this critical reform. Urge Gov. Hochul to Include a Medicaid Managed Care Carve Out of Mental Health and Addiction Care Services in her Executive Budget.