As Families in Crisis Struggle to Reach Services, Medicaid Cuts Threaten to Make It Worse

Hochul’s proposed Medicaid cuts include $125 million from Health Homes, a program that connects the neediest New Yorkers with medical care, food assistance, and more.

Eliza Fawcett   ·   April 9, 2024
State Senator Gustavo Rivera, a major opponent of Hochul's cuts to Health Homes, speaks at a rally for health workers on April 17, 2023.
State Senator Gustavo Rivera, a major opponent of Hochul's cuts to Health Homes, speaks at a rally for health workers on April 17, 2023. | NYS Senate Media Services

Five years ago, Kristen Shelley was living in “crisis mode.” Her seven-year-old son, Kaysen, had been expelled from first grade. He was “hitting, biting, not on meds, not stable,” she said. While she struggled to find him mental health care in Schenectady, he cycled through hospitalizations.

“I could never, ever let my guard down,” Shelley, 51, told New York Focus.

A sliver of hope emerged when her family enrolled in Medicaid Health Homes, a care management program that serves more than 170,000 New Yorkers with complex health conditions and mental health needs. For Shelley, that meant a care manager who found Kaysen a new school and helped manage his behavioral health care. The program became a stabilizing force in their lives, she said.

As Albany debates Medicaid spending levels through ongoing heated budget negotiations, Health Homes is caught in the crosshairs. Facing a 40 percent surge in costs over the last three years, Governor Kathy Hochul proposed cutting more than $1 billion from some parts of New York’s health insurance program for low-income residents. The Senate and Assembly countered with multibillion-dollar increases to Medicaid and no cuts. They propose using an accounting trick — taxing and then repaying health insurers — to obtain an additional $4 billion from the federal government to fund Medicaid.

Hochul dubbed fixing New York’s mental health system “the defining challenge of our time” before releasing her state budget proposal, but her suggested cuts would take about $125 million out of Health Homes, leaving it with just under $200 million. The Department of Health says the cut would “focus care management on the most severe, acute patients.” The program has already been significantly scaled back; as recently as 2023, its budget clocked in at over $500 million.

Health Home providers across the state say that the cut would be devastating — and undermine the governor’s commitment to addressing New York’s mental health crisis. They fear that dismantling a support structure that thousands of families rely on would drive an uptick in emergency room visits and hospitalizations, and destabilize regional networks of social services.

“You can’t take apart the community-based mental health supports and say you’re supporting mental health,” said Bill Gettman, the CEO of Northern Rivers Family of Services, a mental health agency in eastern and central New York. “It’s a total disconnect.”

State Senator Gustavo Rivera, a Bronx Democrat and chair of the chamber’s health committee, said the proposed cut is “one of the many perplexing, and honestly frustrating, changes that the governor is proposing to make to the Medicaid program.”

As of Tuesday, the future of Health Homes was still uncertain.

“We’re still part of the conversation,” Rivera said. “It’s one of the things we’re insisting should be restored. And the governor’s resisting that.”

New York launched its Medicaid Health Home program in 2012, taking advantage of a new flow of federal funding under the Affordable Care Act, and it added a program specifically for children in 2016. Today, dozens of Health Homes across the state work with hundreds of care management agencies, bringing services to more than 170,000 New Yorkers — about 30,000 of them children. Care managers help families create care plans, find providers, navigate enrollment and eligibility, and even plan transportation to medical appointments.

Many families struggle to find mental health services or complete the necessary paperwork, said Nicole Bryl, the CEO of Children’s Health Home of Upstate New York, which operates in 55 counties. The program serves as a “gateway to care,” she said.

“You can’t take apart the community-based mental health supports and say you’re supporting mental health.”

—Bill Gettman, Northern Rivers Family of Services

“When you’re working with a care manager, these families get an extra layer of support,” she said, adding that such managers can validate families’ frustrations and help them find needed services.

To be eligible for Health Homes, an individual must be enrolled in Medicaid and have two or more chronic conditions, like a substance use disorder and diabetes, or a single qualifying chronic condition, like HIV/AIDS or sickle cell disease. The program aims to expand enrollees’ access to preventative care and social services, thus reducing emergency room visits and extended hospital stays — and lowering overall health care costs.

“If you put a child in a hospital bed at $3,500 a day, and you’re doing care management for a few hundred dollars a month, it’s a no-brainer,” said Gettman of Northern Rivers. “It has been working. It’s keeping kids out of foster care, keeping kids out of psych centers, keeping kids out of hospitals.”

Research bears that out: The New York Health Home program has been linked to decreases in emergency department visits and hospitalizations for people with substance use disorders, as well as improved access to care among patients with diabetes. One multi-year study found a 43 percent decrease in inpatient mental health discharges among 10,000 enrollees, in addition to increased use of mental health outpatient treatment.

There have been challenges along the way, too. A 2018 Citizens Budget Commission report noted that while Health Homes “lead to better outcomes and long-run cost savings for many with complex conditions,” a sharper targeting of eligible individuals could make the program stronger and more cost-effective.

Patrick Orecki, CBC’s director of state studies, who worked on the report, said that New York’s Health Home program launched with broad eligibility standards and initially faced some difficulty in finding eligible people to enroll, but has proven effective in helping those with the most severe conditions.

“Our key finding was that the people with the most complex and complicated needs benefited the most from the arrangement,” Orecki said.

The state, for its part, is hesitant to give the impression that it would leave these people behind.

“Care management services offered by health homes serve an important role in the Medicaid program and the Department is committed to ensuring the ongoing operation of this valuable program,” Cadence Acquaviva, a Health Department spokesperson, said in a statement. “The FY25 Executive Budget prioritizes funding for health homes that serve those New Yorkers most in need, while also ensuring responsible overall levels of Medicaid spending.”

Health Home providers say they’ve been left in the dark about how the proposed cut would be implemented.

“We can’t get clarity from the governor’s office or the Budget Division or even the Health Department,” Gettman said. “So I don’t know what’s going on.”

The fight over Health Homes and other services, like the Consumer Directed Personal Assistance Program, comes down to a disagreement over the sustainability of New York’s Medicaid program. While Hochul wants to staunch its “spiraling costs,” many Democratic lawmakers want to see even deeper investments, particularly following cuts during Governor Andrew Cuomo’s administration. In dollar terms, it’s the largest area of disagreement in this year’s budget fight.

The outcome could depend in large part on the viability of the legislature’s tax scheme. Rivera said on Friday that there had been “good progress” on that proposal, including ongoing discussions with the state and federal governments. He was hopeful that Hochul and the legislature could reach an agreement on the tax this week, enabling a final compromise.

Bill Hammond, senior health policy analyst at the Empire Center, a fiscally conservative think tank, noted that New York has the best funded Medicaid system of any state. Compared to previous administrations, Hochul’s attempts to curb the program are “very modest,” he said. And when it comes to Health Homes, he said, it could make sense to narrow the program’s scope.

“It would be prudent to carefully analyze how effective that program is and to reconfigure the program as necessary to make sure that it’s cost effective,” he said.

Rivera sees Hochul’s proposal differently: a “penny wise and pound foolish” cut that would come at a high cost to New Yorkers — and to the state.

“If you don’t provide that coordinated care, those folks are going to wind up in emergency rooms, those folks are going to wind up in nursing homes — which I’ll remind everybody, costs us more,” he said.

A woman stands with her teenage son in front of a ring that says Easter.
For Kristen Shelley and her son, Kaysen, Health Homes has been a stabilizing force. | Kristen Shelley

That was Shelley and Kaysen’s experience when he was little. His regular suspensions and hospitalizations dominated their lives. Shelley often left work early to take him out of school, or drove for hours throughout the state, trailing ambulances as he was transported to inpatient facilities. That hasn’t happened for a few years now — a success she credits in part to his Health Home care manager.

Recently, Kaysen, now 13, called and asked her to pick him up because he was having a hard day at school, she said. But he soon called her back and said he’d been able to resolve the issue himself.

“I told him, ‘I’m just proud of you,’” she said. “It was huge growth there. But that’s because a lot of people have invested in him and he’s had a great team, and they’ve all collaborated together. And that’s what a care manager does.”

Julia Rock contributed reporting.

Eliza Fawcett is a freelance journalist who was recently a criminal justice project reporter for New York Focus. She has reported for The New York Times and the Hartford Courant.
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