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January 19, 2024

CMS Approves NYS 1115 Waiver Amendment (New York Health Equity Reform)

After more than a year of negotiations with the New York State Department of Health (DOH), on January 9, 2024, the Centers for Medicare and Medicaid Services (CMS) announced its approval of the New York Health Equity Reform (NYHER)—an amendment to New York’s State’s current Medicaid 1115 Waiver.1

Before expiring on March 31, 2027, NYHER will make more than $6.6 billion available for the New York State Medicaid program to advance health equity and reduce health disparities. In its 239 pages, the final approval details how NYHER will focus its funding on health-related social needs (HRSN), the establishment of a Health Equity Regional Organization (HERO), the Medicaid Hospital Global Budget Initiative, and investments to strengthen New York State’s health care workforce. This alert summarizes the amendment’s four main components and details what health care and social care providers should expect in the months ahead. 

Health-Related Social Needs

Nearly half of NYHER’s budget is allocated to the provision of HRSN services, which are services that aim to address unmet needs related to an individual’s adverse social conditions in order to improve their access to health services. NYHER sets forth HRSN funding into infrastructure and services.

HRSN Infrastructure

$500 million in funding has been allocated to support establishing infrastructure to deliver HRSN services through social care networks (SCNs). There will be one SCN in each of New York State’s nine regions. Contracted through managed care plans, these SCNs will organize HRSN screening assessments and referral services delivered primarily by local social care providers. Funding has been allocated for SCN creation, business and operations development, and workforce development.

HRSN Services

$3.173 billion in funding has been allocated to fund two levels of HRSN services. All services provided under NYHER must have a reasonable expectation of improving or maintaining the health or overall functioning of the Medicaid beneficiary. Which level an individual member will receive will be based upon screening assessments.

  1. Level 1 Services 

Level 1 services will be available to every enrolled individual. Based on the individual’s screening, Level 1 services will provide case management and referrals to state, federal, and local programs—outside the scope of NYHER—to assist in addressing the individual’s HRSN.

  1. Level 2 Services

Certain higher risk “targeted eligible” Medicaid beneficiaries who meet predetermined and documented clinical and social risk factors, will be eligible for an enhanced list of services, based upon their medical need as determined through screening and assessment. The expansive list of Level 2 services may include:

  • Case management above and beyond Level 1 services, including connection to health care and social care programs, such as legal assistance, childcare, education, and employment
  • Housing supports, such as air conditioners, home modifications, rent or temporary housing, security deposits, transition or moving expenses, and utility costs
  • Nutrition supports, including nutritional counseling, prepared meals, medically tailored meals, and cooking supplies
  • Transportation for covered HRSN services and case management activities

The DOH must submit protocols for HRSN infrastructure and services to CMS for approval and inclusion in NYHER. In the coming months, providers should expect the DOH to develop the screening assessments and Level 2 eligibility criteria as well as a procurement process to select the nine SCNs.

Medicaid Hospital Global Budget

NYHER creates the Medicaid Hospital Global Budget Initiative in New York State and commits $2.2 billion for certain financially distressed hospitals to focus on population health and health equity, improve quality of care, and promote alternative payment models. The DOH must submit its plan to implement a Medicaid Hospital Global Budget model, or it may choose to apply for participation in the new multipayor model from the Center for Medicare and Medicaid Innovation (CMMI) called States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. While the DOH develops the implementation protocol, qualifying hospitals that elect to participate will need to submit a letter of intent (LOI) with the DOH to receive funding.

Eligible hospitals are those that meet all of the following criteria:

  • Are private not-for-profit hospitals with a Medicaid and uninsured payor mix of at least 45 percent
  • Are located in Bronx, Brooklyn, Queens, or Westchester Counties
  • Had an average operating margin less than or equal to 0 percent in calendar years 2019–2022 (excluding COVID-19 relief funding)
  • Received state-only subsidies due to financial distress in fiscal years 2023 and 2024

Workforce Investments

With the goal of promoting health equity, addressing HRSN, and providing sustainable access to care for Medicaid beneficiaries, the NYHER allocates $694 million to strengthen the health care workforce. New York State will implement two workforce initiatives under NYHER:

  1. Student Loan Repayment for Qualified Providers

This initiative will provide “qualified” health care providers who work in certain shortage professions between $50,000 and $300,000 in student loan repayment in exchange for a four-year full-time commitment to a patient panel that includes at least 30 percent Medicaid beneficiaries or uninsured patients. New York State will provide loan repayments directly to the student loan servicer. Qualified providers under this initiative include psychiatrists, primary care physicians, dentists, nurse practitioners, and pediatric clinical nurse specialists.

  1. Career Pathways Training (CPT)

New York State will contract with workforce investment organizations (WIOs) to implement, manage, and provide oversight of the $645.75 million Career Pathways Training (CPT) program, which will be organized into no more than three regions. After defining WIO criteria and eligibility, New York State will select WIOs through a selection process. 

NYHER provides two pipelines for CPT training: 1) the Health Care Career Advancement Pipeline for individuals currently employed at a NYS health care provider and 2) the New Careers in Health Care Pipeline for those unemployed or not employed by a NYS health care provider. Regardless of entry into program, participation is conditioned on a three-year commitment in their new professional title working for NYS health care providers enrolled in the Medicaid program that serve at least 30 percent Medicaid beneficiaries or uninsured patients.

CPT education programs will include:

  • Nursing titles (e.g., licensed practical nurse, associate registered nurse, registered nurse to bachelor of science in nursing, nurse practitioner)
  • Professional technical titles (e.g., physician assistant, licensed mental health counselor, master of social work, credentialed alcoholism and substance abuse counselor, certified pharmacy technician, certified medical assistant, respiratory therapist) 
  • Frontline public health workers (e.g., community health worker, patient care manager or coordinator)

Health Equity Regional Organization

The last of NYHER’s main components is the establishment of a single, contracted statewide entity called the Health Equity Regional Organization (HERO). The HERO will be provided $125 million in waiver funding to develop regionally focused approaches to reducing health disparities, advancing health care quality and equity for overall populations, and supporting the delivery of HRSN services. 

The HERO will coordinate data from various sources to assess and address areas for improvement in health care quality and equity outcomes, including the identification of disparities in health care delivery. HERO activities will encompass data aggregation, regional needs assessment and planning, stakeholder engagement, making recommendations to support advanced value-based purchasing arrangements, and program analysis.

Attorneys on Barclay Damon’s Health & Human Services Providers Team will continue to monitor developments related to NYHER.

If you have any questions about the content of this alert, please contact Herb Glose, partner, at; Bridget Steele, counsel, at; Ron Oakes, associate, at; or another member of the firm’s Health & Human Services Providers Team.

1Section 1115 of the Social Security Act allows the Department of Health & Human Services (HHS) to waive certain Medicaid program requirements and provide federal funding to states, such as New York, to pilot demonstration projects that promote the objectives of the Medicaid program.

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