Scroll Top

Gov. Hochul Unveils State Budget Proposal for FY 2023

On Tuesday, January 18, 2022, Governor Kathy Hochul released her proposed budget for State Fiscal Year 2022-23. The Governor has proposed a $216.3 billion budget, an increase to state spending of less than 2 percent over SFY 2021-2022. Below is an outline of proposals impacting health coverage.


Health Insurance
  • Compliance with the Federal “No Surprises Act.” The Executive Budget includes a number of statutory revisions reflecting the changes required by, or to be consistent with, the federal “No Surprises Act” (“NSA”). Specific changes include:
    • Emergency Medical Services and Surprise Bills. The proposal would:
      • Require disputes to be submitted to a dispute resolution entity (“IDRE”) within three years;
      • Amend the law to apply to all provider types, rather than just physicians and hospitals;
      • Add the in-network median rate as a factor that the IDRE must consider;
      • Eliminate the requirement that an individual complete an Assignment of Benefits form;
      • Eliminate the exceptions for safety net hospitals and specified emergency Current Procedural Terminology (“CPT”) codes; and
      • Require health plans to ensure that members are held harmless for surprise bill amounts beyond in-network cost sharing.

The Budget would also amend the external appeal law to include a reference to the No Surprises Act requirements.  These provisions would take effect immediately.

    • Provider Directories and Continuity of Care; Penalties. The Executive Budget proposes to amend the Insurance Law and Public Health law to:
      • Incorporate the provider directory requirements of the NSA into the Insurance Law consistent with recent Circular Letters;
      • Incorporate the continuity of care requirements of the NSA into the Insurance Law consistent with recent Circular Letters;
      • Incorporate requirements for providers to notify health plans of their provider directory information; and
      • Authorize the Superintendent to fine a health plan for violating federal law.


  • Telehealth Parity: The Executive Budget proposes to establish reimbursement parity for telehealth services by requiring health plans, including those in Medicaid, to reimburse providers for services delivered through telehealth on the same basis, and at the same rate, as services delivered in person. It is noteworthy that the Medicaid benefit parity is limited to “equivalent services” (as defined by regulation). Expressly excluded from such reimbursement are costs “not actually incurred” in the provision of telehealth services, including charges related to the use of a facility. Network adequacy requirements are also added for telehealth services.


  • Utilization Review; Requests for Medical Records. The Executive Budget proposes to remove the exception for health maintenance organization (“HMO”) products in the provisions prohibiting plans from requesting entire medical records for prospective and concurrent utilization review.  This provision would apply to services provided on and after 90 days after enactment.


  • Provider and Facility Credentialing Applications. The Executive Budget proposes to amend the Insurance Law to apply the existing provider application and termination provisions to all types of health insurance policies, rather than just managed care contracts, and adds requirements relating to facility applications and terminations. These provisions require: (1) notice of plans’ credentialing requirements; (2) plans to consult with facilities in establishing qualifications for participation; (3) plans to act on an application within 60 days of receipt of a complete application; and (3) if additional information is necessary and received, make a determination within 21 days of receipt of the additional information.  This provision would apply to applications received 90 days after enactment.


  • Coverage of Abortion Services. The Executive Budget proposes to require individual and group policies providing medical, major medical, or comprehensive coverage to cover abortions and to prohibit the imposition of copayments, coinsurance, or deductibles.  Deductibles may apply to high deductible health plans.  Religious exemptions would be permissible upon certification by the employer that it primarily serves and employs individuals who share the religious tenets of the employer.  Riders would be required to be issued to all enrollees of such groups.  Currently, these same requirements apply to medically necessary abortions.  The Executive Budget proposal would expand the requirements to include elective abortions.  This provision would take effect on January 1, 2023 and apply to policies issued or renewed on and after that date.


  • Contracting with Cancer Centers. The Executive Budget proposes to require health plans offering Medicaid, Essential Plan, and Qualified Health Plans to contract, as network providers, with national cancer institute-designated cancer centers in the plans’ service area for cancer-related inpatient, outpatient and medical services at the same terms and conditions as similar network providers, provided that such reimbursement is at no less than the Medicaid fee-for-service rate beginning January 1, 2023 (and is repealed on January 1, 2028). It is our understanding that this proposal is targeted to assist Memorial Sloan-Kettering.

*See also “Healthcare Access & Affordability” below.

Department of Financial Services (“DFS”) Funding

The DFS is funded entirely by assessments on insurers and banks.  Proposed funding for SFY 2023 decreases by $42,216,839 from 2021-22 funding to $396,939,124 with: $84,785,718 earmarked for the Administration Program; $92,897,741 earmarked for the Banking Program, and $219,255,665 earmarked for the Insurance Program. The sub-appropriations from DFS remain largely consistent with prior years.


Healthcare Access & Affordability
  • Expanding eligibility for the Essential Plan (“EP”). The Executive Budget proposes to expand the Essential Plan by:
    • Expanding eligibility from 200 percent of the FPL to 250 percent;
    • Guaranteeing coverage for women during pregnancy and for one year thereafter, regardless of any changes in income (newborn children of these women would be eligible for Medicaid for one year); and
    • Providing coverage for long term supports and services (“LTSS”)

These expansions are conditioned on federal approval. Expansion of eligibility to 250 percent and coverage of post-partum coverage would take effect on April 1, 2022.  Coverage of LTSS would begin January 1, 2023.

  • Prenatal and Post-natal care. The Executive Budget proposes to:
    • Add prenatal and post-partum benefits for the purposes of improving maternal health and reduction of maternal mortality to the Medicaid benefit package. Such benefits would be ordered by qualified practitioners.
    • Extend eligibility for postpartum women from 60 days post-partum to 12 months postpartum.
    • Extend coverage for pregnant individuals ineligible for federally funded Medicaid due to immigration status so long as their household income does not exceed the MAGI equivalent of 200 percent FPL.
    • Repeal the extension of post-partum coverage under Essential Plan for 12 months post-partum for individuals with incomes between 200 and 223% of the FPL enacted as part of the SFY22 NYS Budget.