On Wednesday July 8th, the New York State Department of Health (DOH) posted a five-year extension request for the Medicaid Redesign Team (MRT) 1115 demonstration, currently authorized through March 31, 2027. One day earlier, CMS rescinded the fast-track approval pathfor 1115 Waiver extensions, making it less likely that New York’s extension will be approved by the end date of the waiver, which would necessitate a short-term extension while negotiations continue. The State has scheduled two public hearings, on July 31 and August 11, prior to the close of the public comment period on August 21, 2026.
The request continues New York’s Mainstream Medicaid Managed Care, MLTC, behavioral health, and SUD authorities. The request also asks for additional time to mature recently approved HRSN, workforce, HERO, and hospital global budget initiatives, and to continue Designated State Health Program (DSHP) financing.
Several long-standing programs are considered likely for continued approval, though in some cases CMS may request that the programs be moved to a 1915 waiver to align with recent guidance changes:
- Medicaid Managed Care Programs: continued authority for New York’s primary Medicaid delivery vehicles, including Mainstream Medicaid Managed Care, MLTC, HARP, HIV SNP, and partial-capitation MLTC.
- Facilitated Enrollment: continued enrollment assistance from ~5,500 application assistors.
- CORE: continued community-oriented behavioral health services for adults with serious mental illness and/or SUD.
- SUD IMD Authority: continued federal matching for short-term residential and inpatient SUD treatment in IMD settings.
- Targeted demonstration populations: continued authority for HCBS Expansion, Institution-to-Community, and Family of One children, while discontinuing the TANF Adult demonstration population.
The State’s request also includes several programs whose extension/renewal is less clear given recent federal guidelines:
- DSHP rollover and unclaimed funds: DOH is requesting to carry forward and use about $2.1B in unspent/unclaimed DSHP authority, including $1.5B already drawn but unspent and $672M unclaimed, for HRSN services, HERO, and workforce close-out. CMS has said it does not anticipate approving new or renewed DSHP authority.
- HRSN services and Social Care Networks: DOH is requesting to continue SCN-delivered care management, housing, nutrition, and HRSN transportation, keep non-risk funding for one more year before capitation in April 2028, and use DSHP for the state share of HRSN capitation. Continuation of these services under the waiver will require detailed demonstration of budget neutrality through savings on services payable by Medicaid without the waiver.
- Workforce initiatives (CPT and HEALR): DOH is not requesting new workforce program authority, and instead requests only rollover/close-out authority to pay administrative costs and monitor service commitments through March 31, 2031. While CMS has said it will allow approved workforce initiatives to run their course, it has indicated it does not anticipate approving extensions.
- HERO advanced analytics: DOH requests continuing $78M in remaining authority for HERO entities to support data analytics, program operations, and fraud, waste, and abuse referrals. While program integrity is aligned with current federal priorities, HERO funding remains a non-benefit, DSHP-linked initiative.
- Medicaid Hospital Global Budget Initiative: DOH is requesting to continue developing Medicaid hospital global budgets aligned with the federal AHEAD model and preserve this funding in hospital global budget baselines for eligible hospitals. While global budgets align with value-based payment goals, the request may be scrutinized as hospital stabilization funding or supplemental payment-like support.
The extension request is available here. Information on the public hearings is here. CMS’s current Section 1115 policy overview is available here.