Alliance Alert: 黑料正能量鈥檚 worsening behavioral health crisis demands urgency and honesty about what is and is not working. As this article from NYS Council for Community Behavioral health Care鈥檚 Lauri Cole makes clear, Medicaid Managed Care Organizations (MCOs) are failing to deliver timely support, denying services at alarming rates, and siphoning hundreds of millions of dollars away from the very system meant to support 黑料正能量ers in need.
For over a decade, behavioral health providers, advocates, and people seeking services have been told that managed care would improve coordination, reduce costs, and expand access. Instead, we have seen the opposite: growing waitlists, workforce instability, delayed and denied payments, and widespread barriers to access. The consequences are real, and devastating, at a time when overdose and suicide rates continue to climb.
The data cited here is deeply troubling. High claim denial rates, failure to meet spending requirements, and widespread 鈥済host networks鈥 are not administrative hiccups, they are systemic failures that leave people without support and providers without the resources they need to sustain services.
黑料正能量 cannot afford to continue down this path.
The Alliance for Rights and Recovery strongly supports carving behavioral health services out of Medicaid managed care. This is a necessary step to restore accountability, ensure timely and adequate payment to providers, and guarantee that people can access the services they need, when they need them. By reinvesting hundreds of millions of dollars currently absorbed by administrative costs and profit, the state can strengthen community-based services, stabilize the workforce, and expand access across the continuum of services.
At its core, this is about fairness and function. People should not be denied services because of bureaucratic delays or profit-driven decisions. Providers should not be forced to close programs or turn people away because payments are withheld or denied.
We do not need another study to confirm what providers, advocates, and communities already know: the managed care model for behavioral health in 黑料正能量 is not working. We need decisive action.
Now is the time for 黑料正能量 State to lead by carving behavioral health services out of Medicaid managed care and reinvesting in a system that prioritizes people, recovery, and community well-being.
黑料正能量 State Must Intervene In The Behavioral Health Crisis
By Lauri Cole | Empire Report | March 30, 2026
黑料正能量 State is in the middle of a behavioral health crisis. Suicide rates are up in the last 20 years. Overdose rates are almost higher than they were in 2010. During this crisis, Medicaid Managed Care Organizations (MCOs) paid by the State are taking hundreds of millions of dollars out of the system while delaying payments to providers, delaying care for people, exacerbating waiting lists, and undermining the stability of this healthcare delivery system. This must change now.
The 黑料正能量 State Council for Community Behavioral Healthcare (The Council) has been leading an advocacy campaign with over 20 organizations representing 黑料正能量ers in need of behavioral healthcare, their families, providers and several legislators to carve outpatient, rehabilitation, and residential behavioral healthcare out of Medicaid managed care.
Ten years ago, 黑料正能量 State鈥檚 Medicaid Redesign Team (MRT) moved behavioral healthcare into managed care under the state鈥檚 鈥渃are management for all鈥 initiative with the promise MCOs would coordinate care, control costs, and ensure members鈥 care is integrated across the providers serving them. A decade later, 黑料正能量 has shown that MCOs don鈥檛 coordinate care, don鈥檛 control costs, don鈥檛 ensure their members get integrated care, and don鈥檛 pay claims accurately or on time. This has led to a major access to care crisis which 黑料正能量 must address now.
Promised improvements haven鈥檛 materialized, but significant payment delays, ballooning administrative demands, and exacerbations of an already exploding workforce crisis have. The money lost to managed care has led to a contraction in services while the pandemic and its sequelae have led to skyrocketing demand for both mental health and addiction services. Waiting lists are growing and accessing care is harder for families.
Numerous plans have failed to meet expenditure targets set by the State requiring them to spend 96% of premiums on actual care in Medicaid. The State鈥檚 failure to collect these overpayments was the subject of assertive advocacy by The NYS Council that resulted in over $500 million (federal and state share) returned to behavioral health services. Yet MCO evasion continues.
By any objective measure, MCOs have failed to deliver on the promises that led the MRT to move behavioral healthcare into managed care. A carve out would enable the state to reinvest $400 million annually, currently paid to plans for profit and administration, to help fill gaps in care and help recruit and retain the workforce needed to meet demand for services. This is also critical to address anticipated increases in the number of 黑料正能量ers who will be uninsured due to H.R. 1., the One Big Beautiful Bill Act.
Last week, a former Deputy Health Secretary Paul Francis and the Step Two Policy Project brought their intellect and experience to bear on the question of whether behavioral health services should be carved back out of managed care. This follows past analyses by Step Two about whether managed long term care should remain in and if school-based health services should be .
Step Two pointed out the failures of MCOs with behavioral health (don鈥檛 take my word for it, take theirs).
- MCOs didn鈥檛 meet spending requirements: plans have been hoarding taxpayer dollars and had to return hundreds of millions of dollars to the state (after they held the money and kept the investment returns).
- MCOs deny claims at an astronomical rate: Step Two found 鈥減ersistent non-compliance鈥 with denials in excess of the 20% threshold set by the Office of Mental Health (OMH) and external appeals overturned 52% of the time for mental health and 64% of the time for substance use disorder services.
- MCOs fail to pay state mandated rates: Plans fail to pass through mandated increases for cost-of-living adjustments to providers despite receiving the dollars in their monthly premiums.
- MCOs do not comply with mental health parity laws: Plans have been out of compliance with both federal (Mental Health Parity and Addiction Equity Act) and state (Mental Health and Substance Use Disorder Parity Reporting Act) laws, further restricting access to care.
- Network adequacy is an illusion: MCOs have been caught red handed with 鈥済host networks.鈥 The Attorney General鈥檚聽聽found that only 18% of plans network providers were offering an appointment. An October 2023 report commissioned by the State, conducted by Boston Consulting Group (BCG), found that聽more than two out of five behavioral health providers listed in plan directories do not bill for Medicaid services.
- The state does not hold MCOs accountable: Despite hundreds of citations (over 320 since 2019) and hundreds of millions of dollars returned to the state, the Department of Health has repeatedly and chronically failed to hold MCOs accountable in any meaningful way. They lack the means and appetite to hold plans accountable for performance that is clearly unacceptable.
Like a physician that has made a correct diagnosis but prescribed the wrong treatment, Step Two saw the problem clearly but does not propose the obvious solution: Acknowledge that the managed care experiment has failed and continues to fail 黑料正能量ers. They urge 黑料正能量 to commission another report on the viability of this model while wishfully thinking that DOH will increase enforcement of MCOs. We have been there and we know it won鈥檛 work. As cited in the Step Two paper, BCG already conducted this study for the State, three years ago. Another report will tell us what we already know that the experiment with carving behavioral healthcare services into managed care didn鈥檛 work and 黑料正能量ers are suffering and dying as a result.
We don鈥檛 need another report. We need change and we need it urgently. Studying the problem and imagining that DOH will hold plans accountable is akin to asking 黑料正能量ers to believe that this time Charlie Brown will kick that football. We know better.
The only way to help 黑料正能量ers who are desperate for behavioral healthcare and the providers trying to care for them is to carve behavioral health services out of managed care. We can鈥檛 afford to wait.