Governor’s FY 2025-26 Executive Budget Proposal
On Tuesday, January 21st, the Governor released her $252 billion FY 2025-26 budget proposal. Echoing her theme from the 2025 State of the State address from last week – “Your family is my fight” – the Governor detailed an all funds increase of $10 billion from the FY 2024-25 State Budget, with education and Medicaid spending totaling roughly 60% of the overall budget. This year’s budget also includes reserves at an historic high of $21.6 billion.
The State is projecting $35.4 billion in Medicaid spending, a $4.3 billion year-over-year increase.
There is 14% growth due to increased Medicaid enrollment and influenced partially by the MCO tax assessment from the FY 2024-25 Enacted State Budget. $1.6 billion of this money will be reinvested to support hospitals and nursing homes, among other providers, through the establishment of the healthcare stability fund.
Below is NYSHFA|NYSCAL’s preliminary review and we will continue our analysis as more information becomes available.
The FY 2025-26 Executive Budget includes actions in the following areas:
Medicaid Rate Adequacy (contingent upon CMS approval of reserves contained within the Healthcare Stability Fund created pursuant to the MCO tax):
- An aggregate increase of up to $385 million for skilled nursing facilities.
- An increase of up to $15 million for assisted living programs.
Managed Care Organization (MCO) Tax: Includes language to codify the structure of the proposed tax and establish a plan for spending tax receipts over the next three years. The Financial Plan conservatively assumes only two years of MCO tax revenue, totaling $3.7 billion in net State Share benefit.
Medicaid Managed Care: Continues the current practice in MLTC by requiring that long-term stay nursing home residents be transitioned from mainstream Managed Care to Fee-for-Service.
Medicaid Global Cap: Includes $500 million to support the remaining Global Cap deficits, to ensure the State does not need to make significant provider reimbursement or service reductions.
Rate Appeals: Caps the amount of funds available for skilled nursing facility rate appeals at $80 million and removes the sunset provision, making it permanent.
Trend Factor: Continues the elimination of the trend factor for skilled nursing facilities and ALPs through March 31, 2026.
Cash Receipts Assessment (CRA): Extends the 6% CRA program through March 31, 2029.
Notice of Material Transaction Requirements: Amends the length of time that a healthcare entity must submit a notice to the Department of Health, from 30 to 60 days, before the closing date of the transaction.
Assisted Living Program (ALP) beds: Amends the date by which additional beds are to be approved on a case-by-case basis by the Commissioner of Health, beginning April 1, 2026.
Nursing Home Transition and Diversion Program: Advances reforms associated with the NHTD waiver program, curbing enrollment to preserve financial sustainability.
HEALTHCARE WORKFORCE:
Certified Medication Aides: Expands the scope of practice for Certified Nursing Assistants (CNAs) to administer routine medications in nursing homes.
Out-of-State Nurses: Allows New York to join the Nurse Licensure Compact so nurses and physicians licensed in other states may practice, either physically or virtually, in New York.
Healthcare Training Programs: Expands support for healthcare training programs under the Increasing Training Capacity in Statewide Healthcare Facilities grant program, with a distinct focus on nurse training programs.
Collaborative Practice of Dental Hygienists: Allows dental hygienists to enter into an agreement with certain registered and licensed healthcare providers and entities, including skilled nursing facilities.
NYSHFA|NYSCAL will continue to keep you updated as the FY 2025-26 Executive Budget progresses and negotiations with the Legislature begin.
CONTACTS:
Stephen B. Hanse, Esq.
President & CEO
518-462-4800 x.11
shanse@nyshfa.org
Kristin A. DeVries, MA, MPP
Director of Government Relations
518-462-4800 x.14
kdevries@nyshfa-nyscal.org
Carl J. Pucci
Financial Consultant
518-462-4800 x.36
cpucci@nyshfa.org
