Navigating New York's Medicaid transformation: Key info for Federally Qualified Health Centers (FQHCs)

Value Based Care
Loren Anthes, Head of External Affairs

New York's recent New York Healthcare Equity Reform (NYHER) waiver has ushered in a new era of opportunities for healthcare providers, particularly Federally Qualified Health Centers (FQHCs). The overarching goals of the Demonstration Amendment are clear: advance health equity, reduce disparities, and enhance the delivery of Health-Related Social Needs (HRSN) services. In this blog, we'll delve into the key aspects of the amendment and highlight the potential impact on FQHCs across the state.

HRSN initiative and collaborative efforts

The HRSN Initiative is a cornerstone of NYHER, with the Centers for Medicare and Medicaid Services (CMS) authorizing up to $3.173 billion for increased coverage of HRSN services. But what are HRSN? According to CMS, “HRSN are an individual’s unmet, adverse social conditions that contribute to poor health. These needs – including food insecurity, housing instability, unemployment, and/or lack of reliable transportation – can drive health disparities across demographic groups.” As FQHCs are often at the forefront of working with marginalized populations disproportionately impacted by social risk factors, HRSN play a pronounced role in influencing outcomes associated with the delivery of care.

FQHCs, as integral community healthcare providers, often already have long-established partnerships intended to address these challenges. But they and their Community Based Organization (CBOs) partners often do not have the resources to manage the complexity of these issues, relying on grant funding or paying out of pocket to support their patients. Under this waiver, resources will now be made available, and providers will actively participate in screening, referral, and service delivery for targeted Medicaid beneficiaries. Collaborating with Social Care Networks (SCNs) and managed care plans, FQHCs can aim to address the diverse needs of populations identified in the waiver, including high utilizers, individuals with Substance Use Disorder (SUD), Serious Mental Illness (SMI), pregnant persons, the post-release criminal justice-involved population, individuals with two or more chronic conditions, and children under age 6.

What FQHCs should know

Much remains to be seen as to how these networks and the mechanisms of HRSN payment will work. Per the waiver’s guidance, SCNs are contracted entities in each of New York state’s nine regions that will provide HRSN screening and referral services to otherwise eligible Medicaid beneficiaries that are targeted populations for HRSN services. This key infrastructure will need to be developed and it will be important for FQHCs to work with their partners to establish meaningful workflows and relationships to take advantage of this new system. Additionally, because waivers are time limited, it will be key to embed these practices into the contracting process itself, notably in value-based care arrangements. In all likelihood, it will be the managed care contract that will dictate the future of how these payments will be implemented, approved and utilized, long term even though the state has indicated and designed elements of the waiver to be permanent.

HERO Initiative

The Health Equity and Racial Opportunity (HERO) Initiative, with CMS authorizing up to $125 million, focuses on data analytics, regional needs assessment, stakeholder engagement, and program analysis. Notably, this includes establishing health equity plans or the state as well as baseline health data for various Medicaid populations. What’s unique about this design is the fact this entity will now be statewide. As many New York FQHCs already know, the state is incredibly diverse, economically and geographically, meaning this is going to be a very tall task for any organization and essentially “contracts out” the policy engine of the waiver to an external entity.

What FQHCs should know

Notably, the state aims to delegate the development of new value-based payment methodologies for implementation at the conclusion of the demonstration period through the HERO, with a particular emphasis on determining funding approaches for health-related social needs in the future. Additionally, given the substantial role this entity will play in strategic planning across the state, FQHCs, which are by definition locally focused, will need to identify how to enable the HERO to recognize the unique needs of their patient populations and how that may influence the value-based care strategies they are engaged in. Specifically, because FQHCs may already be participating in advanced value-based strategies focused on primary care, the HERO should recognize the differences of various providers, their unique regulatory issues and constraints, as well as the type of care they deliver.

A Round-up of other major MRT initiatives

The following table summarizes some of the other major provisions of the waiver with some key insights for FQHC providers to consider:

Medicaid hospital global budget initiative

The Medicaid Hospital Global Budget Initiative, with approved funding of up to $2.2 billion, presents an opportunity for financially distressed safety net hospitals.

What FQHCs should know

FQHCs should monitor how global budgeting incentives may extend some hospital-led networks to seek attribution growth through populations served by FQHCs.

Strengthening the workforce

With up to $694 million authorized for workforce recruitment and retention

What FQHCs should know

FQHCs can explore initiatives like Student Loan Repayment and Career Pathways Training to address healthcare provider shortages.

State Directed Payment (SDP) Authority and provider rate increase

The State Directed Payment (SDP) provision in New York's Medicaid Demonstration Amendment allows the state to make payments directly to providers or managed care plans outside typical reimbursement mechanisms, with the intention of directing managed care plans for specific payments, such as Medicaid Patient-Centered Medical Home (PCMH) payments.

What FQHCs should know

FQHCs should be aware of New York's intention to direct managed care plans for specific payments, emphasizing primary care, behavioral health, and obstetrics as opposed to seeking standalone programs or efforts outside of the MCO contracting process.

Continuous eligibility for children

The continuous eligibility provision in New York's Medicaid Demonstration Amendment aims to provide uninterrupted Medicaid coverage for children up to the age of six, ensuring consistent access to healthcare services and promoting continuous care for this specific population.

What FQHCs should know

FQHCs should be prepared for New York's initiative and, particularly for those serving children, need to contemplate how parents’ coverage may impact the continuum of care for children, since there will be differences in the levels and length of that coverage.


One thing to takeaway from this waiver is just how embedded managed care is in the deployment of the waiver’s goals. In the policy alphabet soup of HRSN, SDP, SCNs and VBC, managed care plays an active role in not only the deployment of the waiver but also acting as a long-term conduit for implementation. Yuvo Health, as a contracting engine focused on support FQHCs in value-based care, has already engaged in this kind of work, providing supportive infrastructure to its members to enable HRSN network management, risk management and the complex process of contract negotiation and, as such, is excited about the opportunity to collaborate with FQHCs, the PCA, CBOs and any other willing partner to fulfill the promise of this program to enable health equity for the Medicaid population. For more information, check out this video from the New York State Department of Health reviewing the waiver and its major provisions from February 21st.

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