Perspective on Recent Developments in New York State Behavioral Health Reform

Since the last issue of Behavioral Health News, as summarized by the excellent update above written by Dr. Jorge Petit and Jenna McCready, the State has moved forward to aggressively implement managed behavioral health. This article presents a perspective on some of the developments.

RFQ for Behavioral Health Benefit Administration – Managed Care Organizations and Health and Recovery Plans (HARPS)

The broad outlines of the final RFQ follow the December draft. Happily, consumers, providers and advocates have discerned significant concerns for the stability of the behavioral health system throughout the final RFQ’s 160-pages. Chief among these are three important clarifications: (1) HARPS and Managed Care Companies (MCOs) will be required to fund all behavioral health Medicaid services at current rates for a 2-year period beginning January 1, 2015; (2) To address immediate concerns about reduced access to services, the RFQ requires MCOs to contract with all behavioral health providers who serve a minimum of five of their enrollees; (3) MCOs are required to hire senior staff with behavioral health expertise. Taken together, these three elements will promote a reasonable transition period for MCOs, the provider community and consumers to develop the understanding, systems and relationships needed in the emerging managed behavioral care system.

HARP eligibility criteria are spelled out in detail in the RFQ. On the mental health side, the criteria are broad and inclusive (including all persons who reside in OMH-funded housing and all persons with SSI who have participated in any OMH-licensed program (including outpatient program such as Adult Mental Health Clinics, PROS, ACT, TCM and PMHP in the year prior to enrollment). On the substance abuse side, the criteria are more narrowly drawn, requiring two or more inpatient or outpatient detoxifications or one primary SUD inpatient stay within a year of enrollment or two or more inpatient admissions with SUD primary diagnosis and related medical diagnoses. Outpatient participation in 822s, for example, does not automatically qualify an individual for HARP enrollment.

1915(i) waiver services are described in the RFQ. These include a welcome list of rehabilitation services, including employment and vocational supports, peer and family support services, self-directed care services, residential supports and crisis and short-term crisis respite care and services. These services will be offered to HARP enrollees who meet specified eligibility criteria as assessed by a “neutral third party.” Some from the advocacy, provider and consumer communities have expressed concern that, as presented in the RFQ, 1915 (i) services will not be available to non-HARP enrollees.

Four Related RFPs

In concert with the release of the MCO/HARP RFQ, four additional RFPs for related demonstration programs have recently been issued. Taken together, they target high need individuals, many of whom are heavy users of behavioral health services. Once again, they promote innovation to meet the behavioral, medical and social service needs of high need individuals to reduce health care costs and improve their health and living status.

Delivery System Reform Incentive Payments (DSRIP)

This multi-billion-dollar Federal fund is being distributed by the State to encourage innovation that will result in a significant reduction of Medicaid hospital costs – both emergency room and inpatient. The behavioral health community has a key role to play in achieving the savings that the State envisions. While the final DSRIP RFP has not yet been released, in reading the preliminary material it is clear that behavioral health providers, in partnerships with hospitals and primary care programs, will create the kind of innovative programs that can impact hospital costs. The preliminary DSRIP description indicated that the Commissioners of Health, OMH and OASAS will have the authority to waive regulations in approving projects. We can expect that the behavioral health community to develop crisis intervention and hospital-to-community transition programs that will not only reduce costs but will also improve the lives of those we serve.

OMH and the Medicaid Redesign Team (MRT) have also issued an RFP for a Crisis and Transitional Housing Pilot Initiative for Adults with Serious Mental Illness. In this 2-year demonstration project, participating agencies will establish short-term crisis beds to divert consumers from emergency room and inpatient services. Each participating provider agency will establish three beds with a short length of stay. Providers will develop a mix of services designed to stabilize consumers so that they can return to their regular housing and services.

The Division of Long-Term Care of the New York State Department of Health has issued The New York State Balancing Incentive Program Innovation Fund (BIP). The primary goal of this 16-month demonstration program is to increase the number of Medicaid recipients served in non-institutional settings by either helping them transition from long-term institutional care back to community-based services, or to prevent increasingly fragile individuals currently in community-based services from having to move to long-term care institutions. Again, a premium is placed on innovative approaches to achieve the desired outcomes. With a large and growing cohort of aging recipients, this RFP is another opportunity to address significant needs in the behavioral health community.

Finally, the Medicaid Redesign Team has issued an RFP for a Supportive Housing Health Home Pilot Project. The purpose of this two-year demonstration is to assist homeless and unstably housed health home enrollees in obtaining affordable and stable housing. Funding can be used to pay for rental subsidies directly or for the services needed to help recipients qualify for such housing. An initiative of the MRT Affordable Housing Workgroup, this pilot program clearly envisions stable housing as a key element in reducing health care costs.

Proposed Revised OASAS Regulations

In the midst of all of this activity, OASAS has released new Draft 822 regulations for outpatient treatment programs. The draft contains a number of suggested changes that may be of concern to the substance use community. It is easily accessed on the OASAS website; comments are being accepted until May 1st.


While this article has focused on recent developments in the transition to managed behavioral care, it is crucial to understand that beginning in January of 2015 behavioral health is being subsumed into an overall managed healthcare system. The recent action of the Department of Health and the Offices of Mental Health and Alcoholism and Substance Abuse Services should be viewed in this context as the State realizes its vision of an integrated and responsive healthcare system. Clearly the transition offers both challenges and important opportunities.

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