����������

This week, the Alliance for Rights and Recovery joined the ���������� State Council for Community Behavioral Healthcare, Families Together in ���������� State, the Citizens’ Committee for Children, and other statewide advocacy organizations for an advocacy day at the State Capitol calling on ���������� to carve behavioral health services out of Medicaid managed care and return them to a fee-for-service system. Advocates stressed that the current managed care system continues to create harmful barriers to services while destabilizing the providers people rely on for support.

For years, individuals seeking mental health and substance use services have faced long waitlists, repeated prior authorizations, narrow or “ghost” provider networks, delayed approvals, and outright denials of service. At the same time, providers across the state continue to experience delayed and denied payments for services they have already delivered, forcing community organizations to spend valuable time and resources fighting insurance claims rather than supporting people in need. These administrative burdens contribute directly to workforce shortages, staff burnout, program closures, and worsening access to services statewide.

The legislation being advanced by Senator Samra Brouk and Assemblymember Jo Anne Simon, S.8309A/A.8055A, would remove most behavioral health services from Medicaid managed care and return them to a fee-for-service system. Advocates estimate the proposal could save ���������� approximately $400 million annually by reducing unnecessary administrative costs and insurer fees, with savings reinvested directly into community-based mental health and substance use services.

The Alliance strongly believes people should be able to access mental health and substance use services when they need them without having to navigate endless bureaucratic barriers. Community providers should also be paid promptly for services they have already delivered so they can continue investing in staff, peer support, crisis services, housing supports, and recovery-oriented services.

We will continue working alongside advocates, providers, and legislative leaders to push for passage of S.8309A/A.8055A before the end of session and ensure ���������� builds a behavioral health system centered on access, accountability, recovery, and community-based support rather than delays, denials, and administrative roadblocks.

Behavioral Health Groups Lobby to Leave Medicaid Managed Care System, Citing Millions in Savings
By Amanda D’Ambrosio | Crain’s Healthcare | May 20, 2026

Behavioral health providers are making an end-of-legislative-session push to exempt themselves from the Medicaid managed care system — a move they say would save the state $400 million in administrative fees to insurers and improve patients’ access to care.

Mental health and substance-use provider groups lobbied lawmakers at the state Capitol on Tuesday to pass a measure that would carve them out of Medicaid Managed Care, a program that deploys third-party private insurers to coordinate services for Medicaid enrollees and pay providers. The legislation would move outpatient behavioral health services to a fee-for-service model, restoring a payment system that was in effect until a decade ago.

Under the proposal, the state would be required to reinvest savings from the switch into the mental health and substance-use system.

The push comes as other providers, including  and , maneuver to get out of Medicaid’s managed care system, which was designed to control high Medicaid spending by coordinating services and unnecessary expenses. Critics argue that the system has not only failed to reduce costs and improve services, but has also placed strain on providers and worsened access to care.

The legislation to carve behavioral healthcare providers out of the managed care program, sponsored by mental health chairs Sen. Samra Brouk and Assemblywoman Jo Anne Simon, was not included in Gov. Kathy Hochul’s executive budget nor the legislature’s one-house budget proposals, making it unlikely to pass this session.

Still, providers and the bill sponsors are continuing to advocate for the bill before the end of the legislative session in mid-June, saying that reforms are urgently needed to ensure vulnerable ����������ers have access to services and treatment.

“The reality is that managed care has broken our system,” said Lauri Cole, executive director of the ���������� State Council for Community Behavioral Healthcare, a lobbying group that has led the campaign to exempt mental health and substance-use services from the Medicaid Managed Care Program.

���������� shifted most mental health and substance-use services into the Medicaid managed care system in 2015. The move stemmed from a recommendation by former Gov. Andrew Cuomo’s Medicaid Redesign Team, which was convened to control the state’s growing Medicaid costs.

Behavioral health providers have for years  to financial challenges they’ve faced since the shift to Medicaid Managed Care. Many of those challenges stem from insurance claims delays and denials, with managed care organizations denying claims at three times the rate of providers in the fee-for-service system, according to the ���������� State Council for Community Behavioral Healthcare.

Patients can appeal claims denials, and arbitrators overturn the decisions 64% of the time for substance-use services in ����������, a report from the People’s Action Institute.

Even so, the delayed payments have placed financial burdens on providers and created long waitlists for care, Cole said, adding that access to care across the state has become a “unicorn.”

The insurance industry pushed back on claims that returning to fee-for-service would improve the mental health system. Eric Linzer, president and CEO of the ���������� Health Plan Association, a lobbying group that represents managed care organizations, said the carve-out would “neither save money for the state nor improve care for patients.”

“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,” Linzer said.

Cole recognized that more work is needed to get the proposal across the finish line, but encouraged lawmakers and the governor’s office to examine the issue. Nicolette Simmonds, a spokesperson for Hochul, said the governor will review any legislation that passes both houses.

“Gov. Hochul did not make the decision to employ for-profit insurers to manage care for vulnerable ����������ers,” Cole said. “She has a track record of prioritizing mental health and substance-use issues. … This is her opportunity, this is lawmakers’ opportunity, to make this right.”

Managed Care Model Delays and Denies Care, Advocates Say
By Johan Sheridan | ABC News 10 | May 19, 2026

ALBANY, N.Y. (NEXSTAR) — Healthcare advocates gathered at the Capitol on Tuesday to demand that ���������� remove most mental health and substance use services from private insurance management. They argued that the current Medicaid managed care model creates dangerous delays and barriers to care for the ����������ers who need the most help.

Medicaid services are administered through a managed care system where the state pays private, for-profit insurance companies a flat fee to coordinate and cover healthcare for beneficiaries. Advocates like Lauri Cole, the executive director of the ���������� State Council for Community Behavioral Healthcare, said the system creates unnecessary hurdles.

In the video above, Cole talked about the problem. “Medicaid Managed Care is drowning providers,” she said. Private insurers, she said, get hundreds of millions a year to manage care, but the result “is a pattern of delaying and denying care and delaying and denying reimbursement to the providers who serve vulnerable ����������ers.”

That’s why Cole and the other advocates—from groups like Families Together in ���������� State, the Alliance for Rights and Recovery, and the Citizens’ Committee for Children—are backing a bill—S8309A/A8055A—that would revert mental health and addiction services to a “fee-for-service” model.

The bill is sponsored by Democratic State Senator Samra Brouk and Democratic Assemblymember Jo Anne Simon. It’s an older structure where the state would pay medical professionals directly for each treatment or service rather than funneling money through private, third-party insurers.

Fee-for-service could save the state about $400 million annually by eliminating administrative fees to insurance agencies, proponents said. And the legislation, if passed, would require any savings from the transition to be reinvested in community-based behavioral health and addiction services.

As of now, the bill is stalled in the Health Committees in both the Senate and Assembly. If it passes both houses of the legislature and gets signed by the governor as currently written, it would take effect on October 1, 2026.

Advocates cited data showing that managed care denial rates for mental health hover at around 60%, and that clients successfully appeal about 64% of denials for substance use disorder services. In short, they claimed that clinics have to waste time chasing down payments or disputing bills rather than treating patients because insurers withhold or delay funds. And they said that the system is too difficult for families to navigate.

According to Alice Bufkin from the Citizens’ Committee for Children, for example, “It is clear that the system does not get easier and access is harder than ever before.”

The administrative burden of fighting these denials takes a toll on the system, according to Luke Sikinyi, vice president of public policy for the Alliance for Rights and Recovery. He said the current model contributes “directly to workforce shortages, burnout, program closures, and reduced access to services statewide.”

But according to Eric Linzer, president and CEO of the ���������� Health Plan Association, “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 cited a Department of Health claim that managed care plans surpass national benchmarks for quality.