Albany, NY – Governor Hochul vetoed a bill sponsored by Assemblywoman Amy Paulin which would permanently carve out school-based health centers (SBHCs) from Medicaid Managed Care, which has the potential to cause fiscal stress to SBHCs, affecting the healthcare for the many New York children who rely on SBHC’s for primary care.

SBHCs provide comprehensive physical, chronic, mental, and dental health services to over 350,000 New York youth, regardless of insurance status or ability to pay. They play a crucial role in ensuring that all children receive the care they need.

“SBHCs increase access to health services for children, reduce ethnic and racial disparities in healthcare, and improve school attendance and performance,” said Assemblywoman Amy

Paulin. “They provide care to every child who enters their door, regardless of insurance status or ability to pay and serve as a critical point of care for the state’s most vulnerable children who may otherwise fall through the cracks.”

Since 1985, SBHCs have operated under a "carve out" from Medicaid Managed Care (MMC), receiving direct fee-for-service reimbursements from New York State. However, recent proposals have threatened to end this arrangement, potentially forcing SBHCs to negotiate with managed care plans.

Although the intention of transitioning SBHCs to MCC is to create efficiencies while maintaining quality health care, the reality of this transition may prove otherwise. The Connecticut Department of Social Services (DSS) recently did an analysis of Connecticut’s MCC program and concluded that, based on the potential disruption and cost of transitioning a well- performing program to managed care, DSS should explore targeted areas to reduce costs instead of pursuing a transition to comprehensive managed care.

According to the report, while Medicaid Managed Care often reduces medical service costs, there is little evidence that managed care would reduce Connecticut’s overall state Medicaid costs after accounting for managed care administrative spending. The results were also mixed on whether managed care would improve access to services or health outcomes.

"I am incredibly disappointed by the Governor's decision to veto our bill that would have halted the transition of School Based Health Center from the current fee-for-service model to Managed Care. For decades, SBHCs have been an incredibly important component of our healthcare

system providing essential primary care to some of the most vulnerable children in our State within the school setting," said State Senator Gustavo Rivera. "If the transition is fully implemented as the Executive intends, these already embattled health centers could face further financial constraints, which could severely limit the critical services they offer to the hundreds of thousands New York families they serve. I urge Governor Hochul to reconsider this shortsighted transition, work with the Legislature and save SBHCs from a grim future."

“A shift from Medicaid fee-for-service to Medicaid Managed Care will have disastrous effects on the vital care SBHCs provide,” said Paulin. “The change could introduce administrative hurdles and delay care for students who rely on these services. I will be reintroducing and seeking to again pass this bill in the Legislature, and hope that Governor Hochul will sign it into law. We must support the financial stability of SBHCs which are essential in advancing health equity for New York’s most vulnerable children.”

A.8862/S.7840 was passed in the New York State Senate by Senator Rivera.