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January 30, 2024

Behavioral Health Spending in the New York State FY 2025 Executive Budget

The New York State Executive Budget Proposal for fiscal year (FY) 2025 has generated great excitement and, like the 2024 proposal, demonstrates Governor Kathy Hochul’s commitment to increasing access and quality of care at all levels. The budget promises to reward innovation and to reward programs that embrace the current challenges of behavioral health care while investing in an increasingly integrated and technology-driven future. It represents an opportunity for growth and evolution for many providers. This alert summarizes some of the more impactful components of the proposed budget’s mental hygiene provisions.

Office for People With Developmental Disabilities

Employment. A $6.7 million investment to prioritize access to employment opportunities for persons with disabilities before recommending alternative supports and services through a multiagency collaboration led by the New York State Office for People With Developmental Disabilities (OPWDD).

More Independent Living Settings. Greater flexibility for the performance of certain tasks within a nurse’s scope of practice by unlicensed employees of certified OPWDD providers in noncertified community-based settings, such as a person’s private home or apartment. This will increase independent living opportunities for persons who otherwise were dependent on levels of care only available in a congregate care setting. 

Additional $15 Million to Develop Housing. Expanded independent living opportunities for individuals with intellectual and developmental disabilities. 

New Service Opportunities. New investments of $30 million in FY 2025, $60 million annualized to fund OPWDD priority program reforms and new service opportunities for individuals who are entering the OPWDD service system for the first time and for individuals already receiving services but whose needs have changed. 

Expand Special Olympics NY. The budget includes a $1 million annual funding increase in FY 2025.

Office of Mental Health

Existing Residential Programs. A $43 million stipend increase for over 17,000 Office of Mental Health (OMH) supported housing units to keep pace with rising property costs. This follows FY 2024 budget legislation that made property pass through provisions available to OMH nonlicensed residential programs.

Workforce Initiatives. New initiatives address recruitment and retention challenges to grow the workforce through efforts such as job marketing, the creation of a job bank, and the creation of a Behavioral Health Fellowship Program. The initiatives will provide rural governments with workforce investments to support their communities. OMH also will develop new credentialing processes for mental health paraprofessionals to accelerate recruitment and retention for the mental health workforce.

988 Crisis Hotline Adds Maternal Mental Health Training. The 988 Crisis Hotline funding will be increased by $100,000 to create a specialized maternal mental health training program for providers, who can then respond to individuals experiencing maternal mental health challenges.

Maternal Mental Health Training. $1.5 million annually to expand Project TEACH (Training and Education for the Advancement of Children’s Health) for individuals during pregnancy and postpartum. This funding will enhance provider education, consultation, and awareness of mental health and substance use resources for direct care staff serving the perinatal population.

Establish Loan Forgiveness Program for Mental Health Clinicians Serving Children. Similar to the OMH 2023 loan forgiveness program, provides $4 million specifically for licensed mental health clinicians serving children and families in OMH and Office of Children and Family Services licensed settings.

Youth ACT Teams. $9.6 million to create 12 new youth Assertive Community Treatment (ACT) teams. 

Peer-to-Peer Youth Programs. $2 million annually to expand peer-to-peer supports, including teen mental health first aid and safe spaces outside of the home and school where youth can meet with peers and establish connections to professionals and trained adults to better address mental health and wellness challenges.

Partial Hospitalization Program. $2.8 million annually to enhance the Partial Hospitalization Program’s (PHP) children’s services rates by 25 percent and develop several new PHP programs.

Specialized Children’s Community Residence Programming. $1 million annually for training and specialized programs focusing on children with welfare system involvement. Funding will support two programs in children’s community residences in each OMH region to support reunification with families and build networks to mental health services.

Improve Mental Health Admission and Discharge Decisions by Hospitals. $7 million in funding to expand oversight and regulatory compliance activities within OMH licensed and unlicensed program settings, including inpatient programs. 

Expand Inpatient Bed Capacity. Funding for an additional 125 state-operated inpatient psychiatric beds (15 for children and adolescents, 85 for adults, and 25 forensic) and 75 Transition to Home Unit (THU) beds.

Individuals With Mental Illness and Involved in the Criminal Justice System. Additional supports for people with mental illness who are involved in the criminal justice system, including $6.2 million to provide mental health specialists and peers in mental health courts, $2.8 million to provide housing and supports to unhoused individuals, and $9.6 million to expand specialized Forensic Assertive Community Treatment (FACT).

Crisis Intervention Team Training. $187,000 to expand Crisis Intervention Team (CIT) training to promote better outcomes for interventions involving law enforcement.

Office of Addiction Services and Supports

Opioid Settlement Fund Investments. The State of New York has received payments from opioid manufacturers and distributors resulting from lawsuit settlements, and as a result, state and local municipalities are expected to receive more than $2 billion through 2040. Over $480 million in settlement payments will have been deposited in the state’s Opioid Settlement Fund through FY 2025. These funds are being used to support addiction programming and services throughout the State. The Office of Addiction Services and Supports (OASAS), as the lead agency and administrator of the fund and with the support and advice of the Opioid Settlement Fund Advisory Board, is collaborating with other state agencies to develop strategies and initiatives. 

Opioid Stewardship Investments. $200 million originally appropriated in 2023 has been appropriated for a number of harm reduction initiatives, including medication and treatment affordability programs, community-based harm reduction programs, and the development of a harm reduction training program for personnel from law enforcement agencies, correctional facilities, and the court system.

Recovery Community Centers. $5 million to support existing recovery community centers and their peer support programs, which are currently funded by federal grants that will expire in October 2024. 

The Justice Center for the Protection of People With Special Needs

Investigations Expansion. The executive budget includes an investment of $1.3 million to support an additional 18 staff across six different titles in the agency’s Investigations Unit. This funding anticipates the need for additional staff driven by mental health investments and process-time challenges.

Multiagency Provisions

Cost-of-Living Adjustment. A cost-of-living adjustment (COLA) to voluntary operated providers of services for OPWDD, OMH, OASAS, Office of Children and Family Services (OCFS), Office of Temporary Disability Assistance (OTDA), and New York State Office for the Aging (NYSOFA), who will receive a 1.5 percent increase. 

Minimum Wage. The executive budget invests an additional $57 million in state funds to support minimum wage increases, including indexing minimum wage to inflation, for staff at programs licensed, certified, or otherwise authorized by OPWDD, OMH, and OASAS.

Commercial Insurance Minimum Reimbursement Rates. Governor Hochul will pursue legislation to require commercial insurance companies to pay for state-licensed outpatient mental health and substance use services at least at the Medicaid rate.

If you have any questions regarding the content of this alert, please contact Keith Brennan, of counsel, at, or another member of the firm’s Health & Human Services Providers Team. The firm will be following developments in the budget, impacts on its clients and funding opportunities, rule changes, and other items stemming from budget provisions.


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