Alliance Alert: A recent report shines a light on a critical implementation failure: six months after New York鈥檚 new commercial insurance parity law went into effect, many mental health and substance use providers still haven鈥檛 received the higher reimbursement rates they are owed. These delays undermine the law鈥檚 intent and threaten access to lifesaving services.
The parity law requires private insurers to reimburse behavioral health providers at rates equal to or greater than Medicaid for outpatient mental health and substance use services. It was passed to address systemic underpayment, help providers stay afloat, and reduce wait times across the state. But instead of relief, providers are burdened with months-long delays and administrative headaches, forced to operate with outdated rates while still trying to meet urgent community needs.
Enforcing insurance parity isn鈥檛 optional鈥攊t鈥檚 the law. Without full and immediate implementation, this law fails the very people it was designed to help: individuals in crisis, people living with mental health and substance use challenges, and the overstretched professionals who serve them.
The Alliance calls on:
- State regulators to act swiftly聽to ensure all insurers are in full compliance, with no further delays or loopholes.
- The legislature to pass pending legislation聽requiring OMH and OASAS to publish standardized fee schedules for commercial plans to eliminate confusion and ensure transparency.
- Advocates and allies聽to continue pushing for accountability鈥攑arity laws are only meaningful if they are enforced.
Access to quality, timely mental health and substance use services is a right鈥攏ot a privilege. We will not stand by as underfunding and administrative failure block that right. The state must do everything in its power to uphold parity and protect essential services for New Yorkers.
Mental Health Providers Still Waiting for Pay Bump Six Months After New Law
By Amanda D鈥橝mbrosio | 颁谤补颈苍鈥檚 Health Pulse | June 12, 2025
New York enacted a law this year to raise how much health insurers pay for behavioral health services, an attempt to funnel resources into the state鈥檚 overburdened system. But six months since the law went into effect, some providers are still waiting to get paid.
Gov. Kathy Hochul passed a law in last year鈥檚 budget requiring commercial health insurers to pay at least as much as Medicaid pays for outpatient behavioral health services such as opioid treatment or day rehab care, rectifying a rare instance when government plans have historically been more lucrative for providers. The law was designed to help mental health and substance use agencies accept more patients with private insurance and address months-long wait times that have restricted access to care.
The state鈥檚 insurance mandate went into effect on Jan. 1, but implementation of the law is spotty; some insurance companies have delayed reimbursement increases due to technology challenges and what they say was a short timeline to update their systems to process new claims, while providers receive the old payment rates.
Insurers have pledged to pay the correct rates to providers retroactively later this year once their systems are up and running. But the delay still places undue burden on mental health and substance use agencies that are already pressed for cash and have to devote administrative resources to ensure they are made whole, said Lauri Cole, executive director of the New York State Council of Community Behavioral Healthcare, an industry group that represents providers.
鈥淭hat is a resource-intensive nightmare for providers and their back-office staff who are pulling their hair out,鈥 Cole said.
Some plans have sent notices to providers to explain why payments have yet to increase. Highmark, a health plan that serves patients in western and northeastern New York, said in a May 30 email to providers reviewed by 颁谤补颈苍鈥檚 that it planned to publish new payment rates by the end of July and update its billing system by the end of October.
Additionally, MetroPlus Health, an insurance plan that鈥檚 a part of New York City Health + Hospitals, sent a note to providers on May 29 stating that the new rates would go live on Aug. 11.
Representatives from Highmark and MetroPlus Health said that they intend to fully comply with the commercial rate mandate and will pay providers retroactively.
“Like other health plans across New York State, we are working diligently to build a new reimbursement platform that aligns with Medicaid billing processes, which are complex and different than current payments for our commercial members,” a spokesperson from Highmark said.
Michelle Dominguez, a spokeswoman for MetroPlus Health, said that 99% of the insurer’s behavioral health providers are ready to be paid under the commercial rate mandate, and a memo issued to providers earlier in May went to less than 1% of providers who required additional administrative updates.
Health plans are in various stages of implementing the mandate, as the state only provided guidance on its new policy a few months before the Jan. 1 effective date, according to Eric Linzer, president and CEO of the insurance lobbying group New York Health Plan Association. Linzer said the insurance industry did not oppose the mandate and has been working to comply with the requirements, but state officials did not provide enough time for health plans to prepare.
鈥淭hese are significant changes that take time for plans to program their systems and do claims testing,鈥 Linzer said. 鈥淚t鈥檚 a great deal of complexity.鈥
Linzer added that the state has not provided a fee schedule outlining the specific rates insurers must pay for services, a factor that has added to insurers鈥 confusion and payment delays, he said. State lawmakers have introduced a bill to require the Office of Mental Health and the Office of Addiction Services and Supports to publish fee schedules to help providers figure out how much to pay. The bill has passed in the Assembly.
A spokesperson from the Department of Financial Services, which regulates private insurance companies, said that the agency has been made aware of technical issues that some insurers have faced, which have delayed higher payments. The agency has been meeting regularly with insurers to ensure providers will be made whole, the spokesperson said.