On January 9, 2024, the federal Centers for Medicare and Medicaid Services (CMS) finally approved New York State’s 1115 waiver amendment to establish the New York Health Equity Reform (NYHER) Program. That application, which is the successor to the state’s Delivery System Reform Incentive Payment (DSRIP) Program that expired in March 2020, was first described in a concept paper issued by the Department of Health (DOH) in August 2021, and was filed with CMS in September 2022. The approved waiver amendment, which expires on March 31, 2027, includes most of the features included in the original application, but not all.

The overall goals of NYHER include:

  • Health-Related Social Needs: Investments in health-related social needs (HRSN) via greater integration between primary care providers and community-based organizations, with a goal of improved quality and outcomes.
  • Health Equity: Improving quality and outcomes of enrollees in geographic areas that have a longstanding history of health disparities and disengagement from the health system, including through an incentive program for safety net providers with exceptional exposure to enrollees with historically worse health outcomes and HRSN challenges.
  • Integrated Care: Focus on integrated primary care, behavioral health, and HRSN with a goal to improve population health and health equity outcomes for high-risk enrollees, including kids/youth, pregnant and postpartum individuals, the chronically homeless, and individuals with substance use disorder (SUD).
  • Workforce: Workforce investments with a goal of equitable and sustainable access to care in Medicaid.
  • Regional Approaches: Developing regionally focused approaches, including new value-based purchasing (VBP) programs, with a goal of statewide accountability for improving health, outcomes, and equity.

These goals are embodied in four new initiatives: (1) HRSN, (2) a Health Equity Regional Organization (HERO), (3) Medicaid Hospital Global Budget Initiative, and (4) Strengthen the Workforce. Each will be examined in turn.

Health-Related Social Needs

This will include grants for infrastructure and services, as follows:

HRSN Infrastructure

DOH will identify thirteen Social Care Networks (SCNs), which are contracted entities in each of eight regions outside New York City, and one in each of the five boroughs. The SCNs will provide HRSN screening and referral services to otherwise eligible Medicaid beneficiaries that are targeted populations for HRSN services.  The waiver amendment authorizes up to $500 million for such purposes. Funding will be available for technology investment, development of business or operational practices, workforce development, and outreach.

DOH issued a Request for Applications (RFA) for the thirteen SCNs on January 16.  Applications are due by March 27.

HRSN Services

The waiver amendment authorizes up to $3.173 billion for the provision of increased coverage of certain HRSN services, in two tiers. All Medicaid beneficiaries will be eligible for Level 1 services, which include referrals to existing HRSN programs. Level 2 HRSN services will be provided to Medicaid beneficiaries who meet certain criteria such as: (1) Medicaid high utilizers, (2) individuals enrolled in a New York state designated Health Home, (3) individuals with SUD, (4) individuals with serious mental illness, (5) individuals with intellectual and developmental disabilities, (6) individuals who meet the Department of Housing and Urban Development’s definition of homeless, (7) pregnant persons, up to 12 months postpartum, (8) post-release criminal justice-involved population with serious chronic conditions, SUD, or chronic Hepatitis-C, (9) juvenile justice involved youth, foster care youth, and those under kinship care, (10) children under the age of 6, and (11) children under the age of 18 with one or more chronic conditions. SCNs will work in conjunction with managed care plans to provide referrals for HRSN services. Covered HRSN services will include housing supports, case management, nutrition supports, and transportation.

Health Equity Regional Organization

The waiver amendment authorizes up to $125 million for the HERO, a contracted statewide entity designed to develop regionally focused approaches to reduce health disparities, advance quality and health equity for overall populations, and support the delivery of HRSN services. In support of the demonstration amendment’s aim of reducing health disparities, the HERO will: (1) perform data aggregation, analytics, and reporting; (2) conduct a regional needs assessment and planning; (3) convene regional stakeholder engagement sessions; (4) make recommendations to support advanced value-based arrangements and develop options for incorporating HRSN into VBP methodologies; and (5) conduct program analysis, such as publishing initial health equity plans and health factor baseline data on Medicaid populations. The HERO will assist New York in developing and designing VBP goals to address HRSN and the most impactful health equity priorities.

Medicaid Hospital Global Budget Initiative

The waiver amendment recognizes that some financially distressed safety net hospitals in New York face substantial challenges in making additional necessary investments for delivery system reform. The Medicaid Hospital Global Budget Initiative will help these hospitals transition to a global budget to incentivize and enable them to focus on population health and health equity, improve quality of care, stabilize safety net hospital finances, and advance accountability through the adoption of a global budget alternative payment model. The waiver amendment authorizes up to $2.2 billion for certain financially stressed private not-for-profit hospitals located in in the Bronx, Kings, Queens, and Westchester Counties due to their significantly adverse health risk factors and health outcomes and Medicaid and uninsured payor mix of at least 45%. The actual Medicaid Hospital Global Budget Model to be used remains to be approved by CMS.

Strengthen the Workforce

The waiver amendment authorizes up to $694 million to support two workforce initiatives, Student Loan Repayment for Qualified Providers and Career Pathways Training (CPT).

Student Loan Repayment for Qualified Providers

The student loan repayment program will provide loan repayment for healthcare professionals working in certain healthcare workforce shortage professions, and who make a four-year full-time work commitment to a practice panel that includes at least 30% Medicaid and/or uninsured members. Available loan repayments include:

  1. Psychiatrists, with a priority on child/adolescent psychiatrists: Up to $300,000 per provider.
  2. Primary care physicians and dentists: Up to $100,000 per provider.
  3. Nurse practitioners and pediatric clinical nurse specialists: Up to $50,000 per provider.

Career Pathways Training

The CPT Program is designed to build up the allied health and other healthcare workforce by funding training and education that focuses on career advancement and unemployed individuals in order to create a reliable healthcare workforce pipeline to address health workforce shortages throughout the state. The CPT program will be organized into no more than three regions to support statewide implementation. CPT participation is conditioned on a three-year commitment of service to healthcare providers enrolled in the Medicaid program that serve at least 30 percent Medicaid members and/or uninsured individuals.

The CPT program will be organized into two career pipelines:  the Healthcare Career Advancement Pipeline, for individuals employed at a New York healthcare provider, and the New Careers in Healthcare Pipeline, for individuals who are unemployed or not employed by a New York healthcare provider. The CPT education and training offerings shall be limited to the course curriculums necessary to achieve the following professional titles, and any others added by the State with CMS approval:

  1. Nursing Titles: This includes Licensed Practical Nurse, Associate Registered Nurse, Registered Nurse to Bachelor of Science in Nursing, and Nurse Practitioner.
  2. Professional Technical Titles: This includes Physician Assistant, Licensed Mental Health Counselor, Master of Social Work, Credentialed Alcoholism and Substance Abuse Counselor, Certified Pharmacy Technician, Certified Medical Assistant, and Respiratory Therapist.
  3. Frontline Public Health Workers: This includes Community Health Worker and Patient Care Manager/Coordinator

The state will contract with Workforce Investment Organizations (WIOs) to implement the CPT program. WIOs will provide participant recruitment, coordination of training, supportive services, and meaningful case management support of the individuals to assure successful completion of their programs and job placement.

Additional Provisions

In addition to the foregoing, there are several other provisions of interest in the waiver amendment, as follows:

Provider Rate Increase

In return for the federal funding provided by the waiver amendment, New York State is required to increase and maintain Medicaid fee-for-service provider base payment rates and Medicaid managed care payment rates in primary care, behavioral health, and obstetrics care. If the Medicaid rate in any of these categories falls below 80% of the Medicare rate, the state must increase the rate by at least 2%, without reducing other service categories. The State is also required to invest approximately $199 million in rate increases, even if no Medicaid rates are below 80% of Medicare rates. CMS expects the State to prioritize the three core service domains listed above, but the State may invest into specialty rates such as dental services if the three service domains already have rates close to Medicare.

SUD Services

The waiver amendment authorizes the State to receive federal Medicaid matching funds for services delivered to beneficiaries residing in an institution for mental diseases (IMD) who have a SUD diagnosis. It includes a SUD Implementation Plan reflecting the State’s commitment to provide a full continuum of care for people with opioid use disorder (OUD) and other SUDs, and expanding access and improving outcomes in the most cost-effective manner possible. The SUD Implementation Plan describes the strategic approach and detailed project implementation plan, with timetables, programmatic content, and the key goals and objectives of the SUD demonstration. With this demonstration, beneficiaries will have access to a continuum of services at new settings that, absent this approval, would be ineligible for payment for most Medicaid enrollees.

The goals associated with the Implementation Plan include:

  1. Increased rates of identification, initiation and engagement in treatment for OUD and other SUDs;
  2. Increased adherence to and retention in treatment for OUD and other SUDs;
  3. Reductions in overdose deaths, particularly those due to opioids;
  4. Reduced utilization of emergency departments and inpatient hospital settings for OUD and other SUD treatment where the utilization is preventable or medically inappropriate through improved access to other continuum of care services;
  5. Fewer readmissions to the same or higher level of care where readmissions is preventable or medically inappropriate for OUD and other SUDs; and
  6. Improved access to care for physical health conditions among beneficiaries with OUD or other SUDs.

The milestones associated with those goals include:

  1. Access to critical levels of care for OUD and other SUDs;
  2. Widespread use of evidence-based, SUD-specific patient placement criteria;
  3. Use of nationally recognized, evidence-based, SUD program standards to set residential treatment provider qualifications;
  4. Sufficient provider capacity at each level of care, including medication assisted treatment (MAT);
  5. Implementation of comprehensive treatment and prevention strategies to address opioid misuse and OUD; and
  6. Improved care coordination and transitions between levels of care.

The SUD Implementation Plan also includes a Health Information Technology (HIT) Plan that details the necessary HIT capabilities in place to support beneficiary health outcomes to address the SUD goals of the demonstration.

Requests Not Being Approved at This Time

While the waiver amendment includes a broad range of approvals from CMS, not all of the components of the original application were approved, and other initiatives that are not included within the approvals are nonetheless discussed in CMS’ approval letter. These include the following:


While CMS approved reimbursement for individuals with a SUD diagnosis in an IMD, the State asked CMS to defer consideration of the serious mental illness (SMI) component of its SUD/SMI amendment until a later time, to provide additional time to consider meeting required milestones under the existing SMI reimbursement framework for stays of 60 days or less, and to continue discussions with CMS about providing services to SMI individuals who reside in a state mental health hospital or IMD for more than 60 days.


Similarly, New York and CMS continue to review the State’s request for limited coverage of certain services furnished to certain incarcerated individuals for up to 90 days immediately prior to the beneficiary’s expected date of release.

Patient Centered Medical Homes

During the course of the negotiations, the State requested the authority to direct its managed care plans to make Medicaid Patient Centered Medical Home payments to align with payments available to Medicare providers. CMS informed the state that no section 1115 authority was needed for the state to direct its managed care plans to make these payments, since primary care is a Medicaid state plan benefit. The State has indicated that it intends to require these payments pursuant to other authorities.

Continuous Eligibility for Children

In support of additional coverage expansion across the state, New York has indicated to CMS that it intends to submit an amendment to its demonstration in early 2024 to provide continuous Medicaid eligibility to children up to age six, regardless of income fluctuations or other changes that otherwise would affect eligibility.

Next Steps

While the approval letter and accompanying documents include more detail concerning all of the foregoing, several components of the waiver amendment require additional development by the State, and in some cases additional approval from CMS. If you have any questions concerning the NYHER program, please do not hesitate to contact the Albany Office of Farrell Fritz at (518) 313-1450.