Behavioral health professionals said the state must make a major Medicaid policy change in next year’s budget to remove for-profit middlemen from Medicaid services for people with mental health or substance abuse disorders — one they estimate will save hundreds of millions of dollars annually.
They argue the state’s reliance on private insurers to pay for Medicaid services has created long wait lists and delayed payments to providers, which has created steep barriers to access mental health and addiction care.
Lauri Cole, executive director of the the state Council for Community Behavioral Healthcare, said returning those services to a fee-for-service model could save up to $400 million per year.
“The state employs these insurers and their middlemen and pays them handsomely to manage or gatekeeper services,” Cole told Spectrum News 1.
Former Gov. Andrew Cuomo made major health reforms to the state health system over a decade ago that expanded managed care for Medicaid services. In other words, he handed over the day-to-day oversight of the services to insurers — or for-profit companies and their Managed Care Organization proxies that serve as middlemen.
Cole said that model isn’t working and must be changed to protect Medicaid services at risk.
“We have provided a way for the state to ensure it can save $400 million that is scarce and really belongs back in the systems of care that take care of New Yorkers with these mental health and substance use conditions,” she added.
Many behavioral health organizations and advocacy groups are pressuring Gov. Kathy Hochul to include the change in her executive budget proposal to be released next month. Several have sent the governor letters about the issue since October.
State Assembly Mental Health Committee Chair Jo Anne Simon said she also backs a carveout for mental health and addiction services from Medicaid Managed Care.
“We have this money in the system,” the assemblywoman said Thursday. “Let’s just use it for people who need that care and not to just pay for somebody moving papers around the desk.”
Supporters also say it’s a critical priority next session as both parties focus on affordability, and as the need for those services is at an all-time high.
But the fight won’t be easy, as health plans largely oppose the idea.
New York Health Plan Association President and CEO Eric Linzer argues a Medicaid managed care carveout in behavioral health services won’t save money or improve care.
“The previous fee-for-service structure provided no oversight or accountability of services and little if any coordination of care for individuals with behavioral health challenges and acute or chronic conditions,” he said in a statement Thursday. “Health plans take an integrated approach and are measured annually on multiple quality and outcome metrics, including those for behavioral health and member satisfaction with the care they receive. The Department of Health’s most recent report on managed care in New York stated that ‘managed care plans continue to surpass national benchmarks [for quality], especially in behavioral health.’ This proposal would be a significant step backwards to a system that failed patients and threaten the care for hundreds of thousands of vulnerable New Yorkers.”
Advocates will also fight for behavioral health workers to get a 2.7% Cost of Living Adjustment increase next year.
“So it’s essentially just trying to keep pace — it’s not an even an increase,” said Allegra Schorr, president of the Coalition of Medication Assisted Treatment Providers & Advocates. “It’s just trying to not fall behind because the fields have been really underfunded for years and years.”
Assemblymembers held a hearing in New York City on Wednesday about the workforce shortage plaguing behavioral health care.
Assemblywoman Simon said the rate of turnover in the industry is as high as 30% across the state because of low pay and rising costs of living.