Directs the state comptroller to conduct an audit of the department of health and other agencies to ensure that the agency meets its responsibilities to review and assess Medicaid managed care organizations for compliance with federal and state requirements to maintain adequate health care providers within network, and to meet mental health and substance use disorder parity requirements.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8781
SPONSOR: Steck TITLE OF BILL:
An act to amend the executive law, in relation to directing the state
comptroller to conduct an audit of the department of health and other
agencies to ensure that the agency meets its responsibilities to review
and assess Medicaid managed care organizations for compliance with
federal and state requirements to maintain adequate health care provid-
ers within network, and to meet mental health and substance use disorder
parity requirements
PURPOSE OR GENERAL IDEA OF BILL:
Directs the state comptroller to conduct an audit of the department of
health and other agencies to ensure compliance with federal and state
requirements.
SUMMARY OF PROVISIONS:
Section 1: The executive law is amended by adding a section 41-b.
At least once every three years, the state comptroller shall conduct an
audit of the department of health, and any other department, bureau,
board, commission, authority or any other agency or instrumentality of
the state deemed necessary by the state comptroller for the purpose of
ensuring the state meets its responsibility to review and assess managed
care organizations that provide health insurance coverage through the
New York state Medicaid program, for compliance with federal and state
mental health and substance use disorder parity requirements.
Section 2: Upon completion of such audit, the state comptroller shall
publish a report that details the results including a determination of
the state's effectiveness in measuring and evaluating Medicaid managed
care organizations for compliance with statutory and regulatory require-
ments pursuant to article forty-four of the public health law. Such
requirements to be considered and evaluated shall include annual reports
of complaints of fraud and abuse, as well as a plan to remedy such defi-
ciencies submitted by Medicaid managed care organizations, managed care
organization compliance in maintaining a network of health care provid-
ers adequate to. meet the needs of plan enrollees, and adherence to
federal and state mental health and substance abuse disorder parity
requirements by managed care organizations. The state comptroller shall
also determine if each Medicaid managed care organization is compliant
with federal and state requirements and provide through explanations
detailing the reason, or reasons for each Medicaid managed care organ-
ization compliance determination.
(b) The state comptroller shall provide such report to the governor, the
attorney general, the temporary president of the senate, the speaker of
the assembly, the minority leader of the senate, the minority leader of
the assembly, the chair and the ranking member of the senate committee
on alcoholism and substance use disorders, the chair and the ranking
member of the assembly committee on alcoholism and drug abuse, the
chairs and the ranking members of the senate and the assembly committees
on health, and the chairs and the ranking members of the senate and the
assembly committees on mental health, no later than the first day of
July of the year immediately succeeding the effective date of this
section. Subsequent reports detailing results and determinations of the
comptroller shall be completed and published officials at least once
every three years, following publication of the first such report on or
before the first day of July.
Section 3: Identifies effective date.
JUSTIFICATION:
According to the Center for Medicaid & Children's Health Insurance
Programs (CHIP) research studies indicate that many individuals with
Mental Health (MH) conditions and Substance Abuse Disorders (SUDs)
struggle to access treatment and support. A survey found that most indi-
viduals with MH conditions and SUDs have more difficulty accessing
treatment for these conditions than they do accessing treatment for
physical health conditions. In addition, reports show that the MH and
SUD treatment needs of child and adolescent enrollees as well as enrol-
lees from minority groups are often not being met. States have a gener-
al responsibility to administer the state plan in compliance with feder-
al law and are required to provide an assurance of compliance with
parity requirements when submitting Alternative Benefit Plan or CHIP
state plans.
Within New York, The New York State Department of Health, Division of
Managed Care (DMC) is responsible for coordination of efforts to improve
quality and regulatory oversight of managed care plans and the implemen-
tation of the mandatory Medicaid managed care program. DMC monitors
health maintenance organizations (HMOs), prepaid health services plans
(PHSPs), HIV Special Needs Plans (HIV/SNPs), Primary Care Partial Capi-
tation Providers (PCPCP), Workers' Compensation preferred provider
organizations (PPOs), and managed long-term care (MLTC) plans. Health
Maintenance Organizations are certified jointly by the Department of
Health and the New York State Department of Financial Services.
New York State and federal parity laws require most comprehensive health
insurance plans to cover medically necessary mental health services and
manage mental health or substance use benefits as they manage medical
and surgical benefits, without additional limitations. However, The
Departments of Labor, Health and Human Services and the Treasury issued
a 2022 report to Congress that suggested otherwise, "The report's find-
ings clearly indicate that health plans and insurance companies are
falling short of providing parity in mental health and substance-use
disorder benefits, at a time when those benefits are needed like never
before," said U.S. Secretary of Labor Marty Walsh.
Likewise, in a 2023 Health Plans' mental health provider network direc-
tories Report, the New York Office of Attorney General found that 13
major health plans in New York have ghost mental health networks, with
only 14 percent of network providers accepting new patients, contrary to
their directory listings. In regards to Medicaid, in September of 2023
U.S. Department of Health and Human Services Office of Inspector General
conducted a review of the Medicaid managed care organization industry to
determine whether these companies were meeting their obligations to
serve children, older adults, and people with disabilities and their
families. Their objective was to determine whether NY's oversight-of
Centers Plan for Healthy. Living (CPHL) ensured compliance with Federal
and State requirements when CPHL denied access to requested services
that required prior authorization.
They determined that New York's monitoring was not effective. One of
the recommendations made to New York was-that they implement. proce-
dures to obtain and review information related to MCOs' initial denials
and internal appeals.
This bill will expand the insurance law by directing the office of the
state comptroller to conduct an audit of the department of health to
ensure that the agency meets its responsibilities to review and assess
Medicaid managed care organizations for compliance with federal and•
state requirements to maintain adequate health care providers within
network, and to meet mental health and substance use disorder parity
requirements These additions will add teeth to the existing laws and
will help to further ensure compliance with parity regulations.
PRIOR LEGISLATIVE HISTORY:
2023-24: A.09742
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8781
2025-2026 Regular Sessions
IN ASSEMBLY
June 2, 2025
___________
Introduced by M. of A. STECK, K. BROWN -- read once and referred to the
Committee on Governmental Operations
AN ACT to amend the executive law, in relation to directing the state
comptroller to conduct an audit of the department of health and other
agencies to ensure that the agency meets its responsibilities to
review and assess Medicaid managed care organizations for compliance
with federal and state requirements to maintain adequate health care
providers within network, and to meet mental health and substance use
disorder parity requirements
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The executive law is amended by adding a new section 41-b
2 to read as follows:
3 § 41-b. Audits of agencies by the comptroller. 1. At least once every
4 three years, the state comptroller shall conduct an audit of the depart-
5 ment of health, and any other department, bureau, board, commission,
6 authority or any other agency or instrumentality of the state deemed
7 necessary by the state comptroller, for the purpose of ensuring the
8 state meets its responsibility to review and assess managed care organ-
9 izations, including health management organizations, prepaid health
10 services plans, and HIV special need plans that provide health insurance
11 coverage through the New York state Medicaid program, for compliance
12 with federal and state mental health and substance use disorder parity
13 requirements.
14 2. (a) Upon completion of such audit, the state comptroller shall
15 publish a report that details the results of such audit including, but
16 not limited to, a determination of the state's effectiveness in measur-
17 ing and evaluating Medicaid managed care organizations for compliance
18 with statutory and regulatory requirements pursuant to article forty-
19 four of the public health law. Such requirements to be considered and
20 evaluated shall include annual reports of complaints of fraud and abuse,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09647-01-5
A. 8781 2
1 as well as a plan to remedy such deficiencies submitted by Medicaid
2 managed care organizations, managed care organization compliance in
3 maintaining a network of health care providers adequate to meet the
4 needs of plan enrollees, and adherence to federal and state mental
5 health and substance use disorder parity requirements by managed care
6 organizations. The state comptroller shall also determine if each Medi-
7 caid managed care organization is compliant with federal and state
8 requirements and provide thorough explanations detailing the reason, or
9 reasons for each Medicaid managed care organization compliance determi-
10 nation.
11 (b) The state comptroller shall provide such report to the governor,
12 the attorney general, the temporary president of the senate, the speaker
13 of the assembly, the minority leader of the senate, the minority leader
14 of the assembly, the chair and the ranking member of the senate commit-
15 tee on alcoholism and substance use disorders, the chair and the ranking
16 member of the assembly committee on alcoholism and drug abuse, the
17 chairs and the ranking members of the senate and the assembly committees
18 on health, and the chairs and the ranking members of the senate and the
19 assembly committees on mental health no later than the first day of July
20 of the year immediately succeeding the effective date of this section.
21 Subsequent reports detailing results and determinations of the comp-
22 troller shall be completed and published at least once every three years
23 following publication of the first such report on or before the first
24 day of July.
25 § 2. This act shall take effect immediately.
