CMS opens door for New York Medicaid investments

Centers for Medicare & Medicaid Services approved New York's amended Medicaid section 1115 demonstration on Tuesday, spurring the agency to invest in behavioral health and health equity initiatives.

The amendment, which expires March 31, 2027, allows the state to establish base rates for safety net hospitals and establishes the Medicaid Hospital Global Budget Initiative, so hospitals can focus on value not volume of care. CMS is dedicating $2.2 billion toward the initiative, primarily for financially vulnerable hospitals.

It also addresses workforce challenges by including a loan repayment program for clinicians working in community-based practices in underserved areas, according to a release. The agency is also authorizing $694 million toward recruitment and retention of Medicaid healthcare practitioners.

New York Medicaid Chief Operating Officer Amanda Lothrop told Fierce Healthcare in October that the amendment would increase funds to population health efforts.

Additionally, the amendment gives New York substance use disorder demonstration authority, as well as increasing provider payment rates and Medicaid managed care payment rates.

“As the nation’s largest insurer, CMS is proud to approve this critical demonstration amendment, which gets to the heart of Medicaid’s role as an innovator,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “The demonstration’s initiatives will provide a broad swath of health and social supports to underserved communities, improving their health and quality of life. We encourage other states to follow New York’s efforts to address health disparities.”

The agency's stated goal of the amendment is to improve health outcomes and further integrate primary care providers and community-based organizations.

Cait Kennedy, a healthcare consultant for healthcare startups, said she is most encouraged by the inclusion of more than $3 billion in investments for high-risk social needs (HRSN) services in a LinkedIn post describing her first reactions. As part of these benefits, individuals with high-risk pregnancies can receive nutrition intervention, like pantry stocking and meal delivery, for up to 11 months.

CMS is also granting pre-procedure and post-hospitalization housing for durations of six months to one year, which can be renewed per year.

HERO, a contracted statewide entity with a regional focus on reducing health disparities, will receive up to $125 million in expenditure authority, partly to incorporate HRSN into value-based purchasing methodologies and arrangements.

New York also said it plans to submit an amendment to the demonstration early this year to provide continuous Medicaid eligibility to children up to age six "regardless of income fluctuations or other changes that otherwise would effect eligibility," the amendment said