NY State Senate Bill 2025-S8309

Senate Bill S8309

2025-2026 Legislative Session

Relates to outpatient mental health and substance use disorder services and Medicaid fee-for-service

download bill text pdf

Current Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 30, 2025	referred to health

2025-S8309 (ACTIVE) - Details

See Assembly Version of this Bill:: A8055
Current Committee:: Senate Health
Law Section:: Social Services Law
Laws Affected:: Amd §§364-j & 365-m, Soc Serv L

2025-S8309 (ACTIVE) - Summary

Returns outpatient mental health and substance use disorder services to Medicaid fee-for-service.

2025-S8309 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8309

SPONSOR: BROUK
 
TITLE OF BILL:

An act to amend the social services law, in relation to returning outpa-
tient mental health and substance use disorder services to Medicaid
fee-for-service

 
PURPOSE:

This legislation would return outpatient mental health and substance use
disorder services to Medicaid Fee-For-Service (FFS) for reimbursement.

 
SUMMARY OF PROVISIONS:

Section 1: Amends the social services law to require that outpatient
mental health and substance use disorder services are reimbursed under
FFS Medicaid, subject to federal approval.

Section 2: Amends the social services law to require that the savings
realized from the return of outpatient mental health and substance use

disorder services back to FFS Medicaid are reinvested in community based
behavioral health services overseen by the Office of Mental Health and
the Office of Addiction Services and Supports. This section also
requires that information regarding the funds available for reinvestment
from the return of these services to FFS Medicaid be included on the
State Department of Health's website and itemized in the annual state
budget beginning April 1, 2026.

Section 3: Establishes the effective date.

 
JUSTIFICATION:

The State began carving in behavioral health services into the state's
Medicaid managed care program in 2015. This shift has been a failure
with serious negative outcomes. Managed care means that middlemen
(managed care plans) are paid to reimburse providers for Medicaid bene-
fits for vulnerable New Yorkers with mental health and substance use
disorder service needs. Many'rnanaged care plans have been found to
violate state laws, regulations or contract provisions while New Yorkers
wait to obtain care from a community-based provider that has to employ
full-time staff who do nothing but deal with health plans and chase
reimbursement from delinquent insurers. When plans fail to reimburse
providers on time and in full, providers are unable to pay adequate
wages to staff, increase the amount of care they provide to match
demand, or manage ever increasing operating expenses associated with
running these programs.

New York State could save hundreds of millions of dollars per year by
carving out outpatient mental health and substance use disorder services
from the state's Medicaid managed care program where managed care plans
are permitted to keep (at a minimum) 11% of the funds they are paid by
the state for profit and 'administrative expenses' despite the fact that
there is no value add associated with employing these companies.

This savings from returning these services to FFS Medicaid should be
properly directed to actual mental health and substance use disorder
services for New Yorkers, not to health insurance plan administration
and profits. It is urgent that New York State carve outpatient behav-
ioral health service reimbursement out of Medicaid managed care as this
legislation provides.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

This legislation will save the state hundreds of millions of dollars by
no longer paying managed care plans to reimburse for outpatient behav-
ioral health services.

 
EFFECTIVE DATE:;
This act shall take effect October 1, 2025.

2025-S8309 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8309
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               May 30, 2025
                                ___________
 
 Introduced  by  Sen.  BROUK  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the social services law, in relation to returning outpa-
   tient mental health and substance use disorder  services  to  Medicaid
   fee-for-service

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 3 of section 364-j of the social services  law,
 is amended by adding three new paragraphs (d-4), (d-5) and (d-6) to read
 as follows:
   (D-4)  SUBJECT  TO FEDERAL APPROVAL, OUTPATIENT MENTAL HEALTH SERVICES
 AS DETERMINED BY THE  COMMISSIONER  OF  THE  OFFICE  OF  MENTAL  HEALTH,
 PROVIDED TO INDIVIDUALS WITH MENTAL ILLNESS AT FACILITIES OR IN PROGRAMS
 LICENSED  PURSUANT  TO  ARTICLE  THIRTY-ONE OF THE MENTAL HYGIENE LAW OR
 CLINICS SERVING INDIVIDUALS WITH MENTAL  ILLNESS  LICENSED  PURSUANT  TO
 ARTICLE  THIRTY-ONE OF THE MENTAL HYGIENE LAW, OR DUALLY LICENSED PURSU-
 ANT TO ARTICLE TWENTY-EIGHT OF THE PUBLIC HEALTH LAW AND  ARTICLE  THIR-
 TY-ONE OF THE MENTAL HYGIENE LAW SHALL BE ADMINISTERED AND MANAGED UNDER
 FEE-FOR-SERVICE IN THE MEDICAL ASSISTANCE PROGRAM.
   (D-5)  SUBJECT  TO FEDERAL APPROVAL, OUTPATIENT SUBSTANCE USE SERVICES
 AS DETERMINED BY THE COMMISSIONER OF THE OFFICE  OF  ADDICTION  SERVICES
 AND  SUPPORTS,  PROVIDED  TO  INDIVIDUALS WITH SUBSTANCE USE DISORDER AT
 FACILITIES OR IN PROGRAMS LICENSED PURSUANT TO ARTICLE THIRTY-TWO OF THE
 MENTAL HYGIENE LAW OR CLINICS SERVICING INDIVIDUALS WITH  SUBSTANCE  USE
 DISORDERS  LICENSED PURSUANT TO ARTICLE THIRTY-TWO OF THE MENTAL HYGIENE
 LAW, OR DUALLY LICENSED PURSUANT TO ARTICLE TWENTY-EIGHT OF  THE  PUBLIC
 HEALTH  LAW  AND  ARTICLE  THIRTY-TWO OF THE MENTAL HYGIENE LAW SHALL BE
 ADMINISTERED AND MANAGED UNDER FEE-FOR-SERVICE IN THE MEDICAL ASSISTANCE
 PROGRAM.
   (D-6) SUBJECT TO FEDERAL APPROVAL, COMPREHENSIVE MEDICAID CASE MANAGE-
 MENT SERVICES PROVIDED TO INDIVIDUALS WITH MENTAL ILLNESS  OR  SUBSTANCE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11629-01-5

 S. 8309                             2
 
 USE  DISORDER SHALL BE ADMINISTERED AND MANAGED UNDER FEE-FOR-SERVICE IN
 THE MEDICAL ASSISTANCE PROGRAM.
   §  2.  Section 365-m of the social services law is amended by adding a
 new subdivision 6 to read as follows:
   6. (A) PURSUANT TO APPROPRIATIONS WITHIN THE OFFICE OF  MENTAL  HEALTH
 AND  THE  OFFICE  OF  ADDICTION SERVICES AND SUPPORTS, THE DEPARTMENT OF
 HEALTH SHALL REINVEST SAVINGS REALIZED THROUGH THE TRANSITION OF  OUTPA-
 TIENT  MENTAL  HEALTH  AND  SUBSTANCE  USE DISORDER SERVICES PURSUANT TO
 PARAGRAPH (D) OF SUBDIVISION THREE OF SECTION THREE HUNDRED SIXTY-FOUR-J
 OF THIS TITLE FROM THE MANAGED CARE MODEL TO THE  MEDICAID  FEE-FOR-SER-
 VICE  SYSTEM FOR THE PURPOSE OF INCREASING INVESTMENT IN COMMUNITY BASED
 BEHAVIORAL HEALTH SERVICES, INCLUDING RESIDENTIAL SERVICES CERTIFIED  BY
 THE OFFICE OF ADDICTION SERVICES AND SUPPORTS.
   (B)  THE  COMMISSIONER  SHALL  INCLUDE INFORMATION REGARDING THE FUNDS
 AVAILABLE FOR REINVESTMENT FROM THE TRANSITION OF OUTPATIENT  BEHAVIORAL
 HEALTH  SERVICES FROM MANAGED CARE TO FEE-FOR-SERVICE ON ITS WEBSITE AND
 THE FUNDS SHALL BE INCLUDED IN EACH YEAR'S  ANNUAL  BUDGET  ITEMIZATION,
 BEGINNING APRIL FIRST, TWO THOUSAND TWENTY-SIX.
   §  3.  This  act shall take effect October 1, 2025; provided, however,
 that the amendments to section 364-j of the social services law made  by
 section  one of this act shall not affect the repeal of such section and
 shall be deemed repealed therewith.

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