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Alliance Alert: For more than a decade, ����������’s experiment with Medicaid managed care for behavioral health services has created barriers to services for people seeking mental health and substance use treatment. As highlighted in this article by Senator Samra Brouk and Assemblymember Jo Anne Simon, the system has too often prioritized administrative complexity and insurance company profits over timely access to support.

The Alliance for Rights and Recovery continues to strongly support legislation S8309A (Brouk) / A8055A (Simon) to carve behavioral health services out of Medicaid managed care and return most outpatient mental health and substance use services to a fee-for-service model. Removing insurance middlemen would help ensure providers are paid directly and more quickly, reduce administrative burdens on community-based organizations, and allow the state to redirect approximately $400 million annually back into the Office of Mental Health (OMH) and the Office of Addiction Services and Supports (OASAS) systems.

This change is essential to addressing long wait lists, inaccurate provider directories, and repeated denials of services that have become hallmarks of the managed care system. ����������ers deserve a behavioral health system where public dollars go directly to services that support recovery, not to unnecessary administrative overhead.

The Alliance will continue pushing for passage of this legislation alongside our other legislative priorities throughout this week’s Week of Action, as advocates across the state meet with lawmakers and urge them to strengthen ����������’s behavioral health system in the final stages of budget negotiations.

Call to Action: Contact Your Lawmakers Today

With the State Senate and Assembly preparing to release their one-house budget proposals, advocates are urging lawmakers to include the behavioral health carve-out legislation in their budgets.

Please contact your State Assemblymember and State Senator and ask them to urge Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins to include S8309A / A8055A in their one-house budget bills.

State Assembly Switchboard: 518-455-4100

State Senate Switchboard: 518-455-2800

After a decade of failure, it is time to remove the insurance middlemen and reinvest those resources into the care people need.

For those interested in learning more about policy changes, budget developments, and the future of mental health and substance use services in ����������, we encourage you to register for and attend the Alliance’s upcoming Executive Seminar. The event will provide in-depth updates on state and federal policy and equip leaders with the knowledge needed to strengthen services and advocacy efforts across the state.

It’s Time to Put Mental Health Care over Insurance Company Profits
By State Senator Samra Brouk and Assemblymember Jo Anne Simon | Empire Report | March 5, 2026

Our mental health system is at a breaking point. ����������ers need more services, especially students, older adults, immigrants and LGBTQ+ people targeted by Trump. One solution is to scrap our current billing system for Medicaid behavioral health care, which has been a disaster. It delays care, bogs down providers, and costs the state a whopping $400 million so that for-profit insurance plans can line their pockets.

Over a decade ago, ���������� made a fateful decision to move behavioral health services from “fee-for-service” and into the  The promise was better care coordination, mental health and primary care integration, new payment arrangements and cost savings. The insurance plans had over 10 years to figure out how to get it right. They haven’t. Instead, it’s been a total failure. ����������ers struggling with mental health and substance use disorders are paying the price and so are ���������� taxpayers.

The evidence of managed care’s failure is overwhelming. After a decade with this model, 43% of mental health clinics still maintain waiting lists.  during that time. Meanwhile, state Attorney General Letitia James  were inaccurate “ghost networks” filled with practitioners who don’t actually see patients, or don’t exist at all.

Here’s what also boggles the mind: the state pays insurance companies to serve as middlemen between Medicaid and behavioral health providers. These companies keep at least 11% for “administrative expenses” and profit which totals approximately $400 million per year—while adding no measurable value to patient care. This is simply not a justifiable use of taxpayer money.

The quality of services is equally appalling. Since 2019, managed care plans have received over 320 citations for violations, including noncompliance with mental health parity laws, delayed and denied payments owed to providers for services rendered, and failure to spend allocated funds on actual care. The state has recovered over $500 million from insurers who hoarded money instead of paying for services already provided, in violation of a  that the plans spend 96% of the premiums they receive on actual care. There continues to be widespread plan evasion of this contract requirement.  shows that when ����������ers with substance use disorders have their claims denied but then are sent to an external appeal, they prevail 64% of the time, proving insurers were wrong nearly two-thirds of the time.

Community-based providers spend between $200,000 and $1 million annually just managing managed care—employing staff whose sole job is chasing reimbursement, appealing denials, and navigating red tape. These are resources that should be spent hiring clinicians, opening clinics, and reducing waiting lists. Instead, they’re funding compliance with a system that systematically obstructs care.

We have a solution:  legislation that would return most outpatient mental health and substance use disorder services to Medicaid fee-for-service (FFS) reimbursement. This course correction could save lives and the state $400 million dollars per year.

Our bill is straightforward. By returning these services to FFS, we eliminate the middleman. Providers get paid directly and on time. Administrative burdens decrease dramatically. The $400 million currently going to insurer profits gets reinvested in actual health care. The current FFS program already has checks and balances, so ����������ers get the services to address their needs, nothing more. The denial rate in FFS is approximately 20%, as compared to over 60% in managed care, which gets two-thirds of their denials overturned anyway.

We already have proof this model works and the technology to implement it. In 2023, ���������� carved pharmacy benefits out of managed care, saving hundreds of millions of dollars while improving access and eliminating network restrictions.

Our bill would require that savings from this transition be reinvested into community-based behavioral health services overseen by the Office of Mental Health and the Office of Addiction Services and Supports. This creates an efficient process for ����������ers to receive essential mental health and addiction care while ensuring that every taxpayer dollar goes directly to care, not corporate profit.

We urge our colleagues in the Legislature, many of whom cosponsor our bill, to prioritize the needs of ����������ers over insurance company profits and include the behavioral health carve out in the state budget. We need the Governor to champion this effort which will affordably improve mental health.

After a decade of system failure, ����������ers in crisis deserve better. The managed care experiment has failed on every metric that matters—access, quality, fiscal responsibility, and outcomes. It’s time to move to something different. It’s time to invest in care, not insurance company profits.

����������ers are counting on us to do what’s right.

State Senator Samra Brouk represents the 55th Senate District. Assemblymember Jo Anne Simon represents the 52nd Assembly District. They both serve as the Chair of the Mental Health Committees in their respective houses.