CMS Approves New York’s Groundbreaking Section 1115 Demonstration Amendment to Improve Primary Care, Behavioral Health, and Health Equity

New, innovative efforts will establish base rates for safety net providers, address critical social needs for millions of Medicaid recipients, and grow the health care workforce across the state

Today, as part of the Biden-Harris Administration’s efforts to build a health care system that benefits all Americans, the Centers for Medicare & Medicaid Services (CMS) approved an amendment to New York’s Medicaid section 1115 demonstration that bundles a series of actions to advance health equity and strengthen access to primary and behavioral health care across the state. CMS’ approval allows New York to make large investments in wide-ranging Medicaid initiatives, including establishing sustainable base rates for safety net hospitals that serve the state’s most underserved communities; connecting people to critical housing and nutritional support services; enhancing access to coordinated and comprehensive treatment for substance use disorders (SUDs); and making long-term, sustainable investments in the state’s health care workforce.

“As the nation’s largest insurer, CMS is proud to approve this critical demonstration amendment, which gets to the heart of Medicaid’s role as an innovator,” said CMS Administrator Chiquita Brooks-LaSure. “The demonstration’s initiatives will provide a broad swath of health and social supports to underserved communities, improving their health and quality of life. We encourage other states to follow New York’s efforts to address health disparities.”

Medicaid section 1115 demonstrations allow CMS to approve innovative projects that promote the objectives of Medicaid, which provides health coverage to millions of low-income adults, children, pregnant people, and people with disabilities.

In New York’s demonstration, CMS is approving several initiatives to address health-related social needs as well as support greater integration between primary care providers, community-based organizations, and behavioral health specialists. This complements other Biden-Harris Administration efforts to strengthen the primary care infrastructure in this country, including the recently announced CMS Innovation Center’s Making Care Primary (MCP) and States Advancing All-Payer Health Equity Approaches and Development (AHEAD) models.

Additionally, in November 2023 the White House released the first ever Social Determinants of Health Playbook, which lays out an initial set of structural actions federal agencies are undertaking to break down silos that provide both health care and critical services and support equitable health outcomes. CMS also recently issued an informational bulletin on health-related social needs, as well as a Call to Action to Address Health-Related Social Needs, and a Medicaid and CHIP Health-Related Social Needs Framework. These resources build on the Biden-Harris Administration’s work to advance health equity by acknowledging that peoples’ social and economic conditions play an important role in their health and wellbeing.

The demonstration amendment also aims to support hospitals that help serve the most vulnerable populations and have significantly more adverse health risk factors and poorer health outcomes compared to other parts of the state. It includes funding to support a Medicaid Hospital Global Budget Initiative for a subset of financially distressed safety net hospitals looking to transition payment to rewarding value rather than volume of care provided. The demonstration will also help with establishing sustainable base reimbursement rates for safety net hospitals and addressing significant health care workforce shortages in safety net settings. The workforce initiatives include a loan repayment program for clinicians who commit to working in community-based practices in underserved areas, and enhanced training for under- and unemployed individuals who assist doctors and nurses as part of broader health provider teams. Additionally, New York will increase and sustain provider payment rates and Medicaid managed care payment rates for obstetrics, primary care, and behavioral health.

Across these and other efforts, CMS and the state will monitor progress through rigorous independent evaluations to determine outcomes and impacts.

Under the Biden-Harris Administration, more people than ever before have health care coverage. Demonstrations like New York’s — as well as similar efforts in Arkansas, Arizona, California, Massachusetts, New Jersey, Oregon, and Washington — make that coverage even more impactful by improving access and affordability.

For additional information on New York’s approval, visit Medicaid.gov.