New York Medicaid Health Homes Seek 15% Funding Increase

New York's Medicaid Health Home providers are calling for higher reimbursement rates, arguing that better funding for care coordination can prevent costly hospitalizations, reduce emergency room visits, and improve patient outcomes.

The New York Health Home Coalition is requesting a 15% reimbursement increase in the state's upcoming budget, representing approximately $29 million in additional funding.

The request comes as providers struggle with rising operational expenses, workforce shortages, and reimbursement rates that advocates say have remained largely stagnant since 2018.

According to reporting by WXXI News on October 13, the program currently serves more than 188,000 adults and children with complex medical, behavioral health, and substance-use needs.

What Are Medicaid Health Homes?

Despite the name, a Medicaid Health Home is not a residential facility or nursing home.

It is a care coordination program designed to help Medicaid beneficiaries with significant healthcare needs access and manage services across multiple providers.

These services can include:

• Coordinating primary and specialty medical care.
• Connecting patients with behavioral health treatment.
• Helping patients obtain substance-use treatment.
• Arranging referrals and follow-up appointments.
• Supporting medication management and treatment adherence.
• Connecting individuals with housing, transportation, and other community resources.
• Helping prevent avoidable emergency room visits and hospitalizations.

The objective is straightforward: patients with complex needs should not have to navigate the healthcare system alone.

Why Providers Are Requesting More Funding

The New York Health Home Coalition argues that current reimbursement has failed to keep pace with inflation.

Coalition Executive Director Laurie Lanphear says rates have remained stagnant since 2018, while cumulative inflation has exceeded 30%.

This creates a significant challenge for agencies attempting to recruit and retain qualified care managers.

The coalition is seeking both a 15% reimbursement increase and improved compensation for care management workers.

Although New York has provided certain targeted increases, including a 2.7% adjustment to Health Home Plus rates, advocates argue that broader funding remains necessary.

The Financial Case for Preventing Hospitalizations

One of the most important arguments for investing in care coordination is its potential to reduce overall Medicaid spending.

Hospital admissions, repeated emergency department visits, and poorly managed chronic conditions can generate substantial costs.

For illustration, consider a hypothetical program serving 10,000 high-need Medicaid beneficiaries.

If improved care coordination prevented just 200 hospital admissions annually, and each avoided admission represented $15,000 in otherwise payable healthcare costs, the gross avoided expenditure would total approximately $3 million annually.

Those figures are illustrative, not measured savings from New York's Health Home program. Actual savings depend on the services avoided, patient risk, reimbursement arrangements, and program operating costs.

Nevertheless, the example demonstrates why healthcare financing should consider more than the direct expense of care management.

A program that costs money to operate may still reduce total healthcare spending when it successfully prevents more expensive medical events.

The Opportunity for Value-Based Payment

Traditional healthcare reimbursement often compensates providers for individual services rather than the total outcome of a patient's care.

Value-based payment models offer a different approach.

Under an appropriately structured shared-savings arrangement, providers may receive additional compensation when they improve outcomes and reduce avoidable expenditures against agreed benchmarks.

Health Homes, physician groups, behavioral health providers, and Independent Practice Associations could potentially participate in coordinated arrangements that reward improved patient stability and lower avoidable utilization.

Such arrangements require appropriate contracting, measurable quality standards, and safeguards against withholding necessary care.

Why Behavioral Health Coordination Matters

Individuals experiencing serious mental illness, substance-use disorders, and multiple chronic medical conditions frequently require services from several different organizations.

When those services are disconnected, patients may miss appointments, experience treatment interruptions, or receive inadequate follow-up after hospitalization.

Effective care coordination can help connect outpatient behavioral health providers, primary care physicians, hospitals, and community support services.

The goal is not simply to reduce spending. It is to improve continuity of care while helping patients remain stable in their communities.

A Broader Question for New York Medicaid

New York faces an ongoing challenge: how can the state control healthcare spending without limiting access to necessary services?

One answer may be to invest more strategically in programs that demonstrate reductions in avoidable utilization.

The Health Home Coalition's proposal raises an important policy question.

Should Medicaid reimbursement be evaluated only by the immediate cost of providing a service, or should policymakers also consider the downstream healthcare expenditures that service may prevent?

For programs focused on patients with complex medical and behavioral health needs, that distinction is particularly important.

Looking Ahead

The proposed 15% reimbursement increase has not yet been enacted. It is a request for consideration in New York's next state budget.

As budget negotiations approach, policymakers will need to evaluate provider workforce pressures, patient access, measurable outcomes, and the potential long-term financial impact of care coordination.

For New York's Medicaid program, strengthening effective community-based services may prove to be an important part of reducing avoidable hospital utilization while preserving access to care.

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Sources

• "WXXI News — Medicaid Health Homes Seek Additional State Funding" (https://www.wxxinews.org/new-york-public-news-network/2026-10-13/program-for-medicaid-patients-in-new-york-seeks-infusion-of-state-funds)
• "CMS — New York Health Home Plus State Plan Amendment NY-26-0029" (https://www.medicaid.gov/medicaid/medicaid-state-plan-amendments?filter%5Bfield_state%5D%5Bin%5D%5B%5D=786&filter%5Bfield_topics%5D%5Bin%5D%5B%5D=3046&limit=10&sort=field_approval_date%3Adesc)