We write today to ask you to join the call for Governor Hochul to carve out Behavioral Health from Medicaid Managed Care and reinvest those savings back into the system as part of this FY 2026 State Budget as described by S8309/A8055 sponsored by Mental Health Committee Chairs Senator Brouk and Assemblymember Simon.

New York’s behavioral health system is at a breaking point. While the need for care grows, community-based providers are drowning in administrative demands from Medicaid Managed Care Organizations (MCOs) while hundreds of millions of dollars are siphoned out of the system to support profits. Families who should be receiving timely services instead face disruptions, denials, and further traumatization caused by paperwork disputes and insurer gatekeeping.

We ask for inclusion of proposed language in the FY 2026 Executive Budget that would remove most outpatient mental health and substance use disorder services from the state's Medicaid managed care program, returning responsibility for reimbursement of these claims to the state's Medicaid Fee for Service (FFS) system.

Now is the time. Why? By removing managed care plans from the equation, NY can:

1) remove unnecessary barriers to care
2) simplify and streamline the reimbursement process; and
3) return scarce resources to the OASAS and OMH systems of care to address workforce shortages and address gaps in services. (estimates are at $400M/year in savings for NYS)

Managed Care Organizations emerged from a stratagem early in the Cuomo tenure to save money and increase efficiency by shifting Medicaid management and administration responsibilities from state government to the private sector.  This effect has not worked.  Most MCO's operate out of compliance with parity laws, deny claims, delay payments, and siphon hundreds of millions of dollars intended for direct behavioral health services for individuals and families in need.  Their mission is not to provide services but to maximize profits, and profit-seeking has proven to be incompatible with the state’s mission of ensuring the best care is delivered to those who need it as efficiently as possible.  The results of the MCO experiment are clear and final: it has failed, and in no area more so than behavioral health.

Hence, there is no better place to commence extricating New York from the failed MCO experiment than behavioral health.  The success we expect to see here shall spur further unwinding of MCOs from state-sponsored health care and save Medicaid dollars to be used as intended by eliminating overhead costs and private profit-taking.

Please help us by adding your voice to ours and urge Governor Hochul to take this common-sense measure to improve behavioral health care in New York.  Thank you for your consideration.