On February 1st, Governor Kathy Hochul submitted her second Executive Budget to the Legislature, covering New York State Fiscal Year (FY) 2024, which will run from April 1, 2023 to March 31, 2024.
This year, the Division of the Budget (DOB) forecasts a “spectrum of uncertainty” around New York State’s fiscal position. To date, New York’s economy has outperformed previous expectations, resulting in significantly higher-than-expected tax receipts for the last two fiscal years. However, DOB now forecasts a “mild national recession” and accompanying declines in wage growth, resulting in reduced projections of tax receipts starting in FY 2024.
Overall, the Executive Budget proposes total spending of $227.0 billion, up from a projected $221.6 billion in FY 2023 (itself an increase from the original FY 2023 projection of $216 billion). The budget now includes outyear gaps totaling $22 billion over the next three years (FY 2025 through 2027).
The Budget includes major health proposals outlined in the Governor’s State of the State, including:
- A $1 billion investment in increased inpatient and outpatient behavioral health care capacity;
- A new round of capital funding for health care transformation (totaling $1 billion);
- Reforms to the Certificate of Need (CON) process;
- A new process for DOH to conduct oversight of “material transactions” involving less-regulated health care providers and affiliates such as management services organizations (MSOs);
- New requirements for insurance plans to provide coverage of behavioral health services, including for plans to pay out-of-network licensed clinics the Medicaid rate if an in-network option is not available; and
- Creating an option for experienced physician assistants (PAs) to practice independently, and making other scope of practice expansions for nurses, PAs, and pharmacists.
It also includes a variety of other proposals, such as:
- A 5% increase to Medicaid inpatient hospital, nursing home, and assisted living program rates;
- A 2.5% cost of living adjustment (COLA) for eligible human services providers;
- A proposal to require managed long-term care (MLTC) plans to meet performance standards, including contracting with the minimum number of licensed home care services agencies (LHCSAs) and fiscal intermediaries (FIs), and authorizing the Department of Health (DOH) to conduct a competitive bid process to select MLTCs if not enough plans meet the standards;
- Creating a streamlined joint licensure for Certified Community Behavioral Health Clinics by the Office of Mental Health (OMH) and the Office of Addiction Supports and Services (OASAS);
- Insurance reforms, including:
- Prohibiting insurers from making prospective denials for emergency services and associated inpatient admissions;
- Establishing that a site of service review (i.e., a review of whether a service needed to be provided in a hospital-based outpatient setting) is a utilization review and must follow the associated procedures; and
- Repeating the proposal from last year’s Executive Budget to shift responsibility for health care professions regulation from the State Education Department to DOH.
Other major proposals from the State of the State, such as the Future of Health Care Commission, integrated licensure streamlining, and Medicaid primary care rate increases, may be implemented through administrative authority.
SPG’s detailed summary is available here. The full FY 2024 budget materials are available on the Division of the Budget’s website here.