PULSE 5/29/2026: Capital Update May 29,2026

Fifty-seven days after it was due, the New York State Legislature and Governor completed passage of its $268.5 Billion State Budget for 2026-27. This year was a particularly challenging year given the extraordinary volume of issues impacting physician-delivered care in this year’s Budget discussions.

The final Budget included some prior authorization forms, new Medicaid funding for the physician fee schedule, and a rejection of several adverse proposals opposed by MSSNY. However, it also contained profound changes to New York’s surprise bill law particularly as it relates to publicly funded health plans, despite repeated warnings from MSSNY and other groups regarding the impact of such a step on hospital emergency departments across the State that rely upon on-call specialty physician care.

Positive outcomes in the Budget included:

• Rejection of the proposal opposed by MSSNY to require physicians to bear 50% of the cost of the Excess Medical Malpractice Insurance coverage, saving physicians nearly $40 million.
• Rejection of the proposal opposed by MSSNY to enable many Physician Assistants to practice without physician supervision.
• Rejection of the proposal opposed by MSSNY to reduce the pass-through entity tax credit used by many private physician practices
• Prior authorization reforms supported by MSSNY:
  • Increased health plan reporting on pre-authorization requests approved and denied, including the 25 most frequent CPT codes where a pre-auth was requested, and the 25 most frequent CPT codes where a pre-auth was denied.
  • Ensuring 90 days of continued coverage for a course of treatment by a non-par physician when the patient enters a new health plan.
  • Greater health insurance transparency of their prescription formularies, which must be available on health plan websites without having to establish an account or password.
  • Prohibiting prior authorization more than once per year for an outpatient course of treatment for a chronic health condition starting from the date of a pre-authorization approval for the course of treatment unless the enrollee’s attending provider recommends a change to the course of treatment.
• Continuation of Requirement for Health Insurers to ensure telehealth payment parity.
• Allocation of $50 million in new funding for the Medicaid physician fee schedule.
• Funding MSSNY’s Committee for Physicians’ Health program at $990,000 historical level.
• Funding Doctors’ Across New York medical student loan repayment program funded again at $15,865,000 historical level.
• New funding for the MSSNY/NYSPA/NASW Veterans’ Mental Health Training Initiative.
• Reducing prior authorization requirements in Workers’ Compensation by increasing cost of care threshold from $1,000 to $1,500.

Profound Changes to IDR Will Impact Hospital Emergency Departments. Despite the pervasive opposition from MSSNY and many other allies, through in the Capitol/LOB, in district, grassroots and media advocacy, the State Budget includes a comprehensive component significantly reducing access to and awards from New York’s Independent Dispute Resolution (IDR) process. The new provisions do not change current statutory IDR criteria for out of network disputes involving state-regulated commercial plan enrollees. HOWEVER, the new provisions greatly limit physician appeal rights by:

Removing Medicaid Managed Care out of network claim disputes entirely from IDR. Became effective upon Governor’s signing on May 28.

Bringing NYSHIP/Empire Plan into state IDR but under a different decisional standard. Disputes involving out of network NYSHIP claims will be decided by proximity to a 50th-percentile “allowed benchmark” rather than the existing statutory criteria, and IDR awards involving NYSHIP are capped at an 80th-percentile allowed benchmark defined as “maximum fee.”  Becomes effective 90 days after signing – August 25th.

Establishing situations where IDR will not be available as a remedy regardless of insurance coverage:

• • if the health plan can demonstrate that it has a contract with the provider or a subsidiary or other entity owned or operated by the provider that is in effect at the time the disputed service or services were provided to provide the same service or services at the same location; or
  • If the health care plan can demonstrate that a notice of determination for prior authorization has been issued to the patient’s health care provider that includes necessary legal disclosures and clearly identifies the health care service or services in dispute as out-of-network.

Workers Compensation Changes Fail to Address Root Cause of What Deters Physicians from Program. Establishing a “universal approval” system for physicians to participate in the Workers Compensation program, which eliminates the long-standing requirement for a physician’s initial application to include a recommendation from the county medical society where the physician practices. While lauding the intent to increase physician participation in the WC program, MSSNY and county medical societies across the State raised serious concerns because, in addition to eliminating an important credentialing process applicable with other forms of insurance, the Budget measure does very little to address the litany of claims administration and payment hassles that currently and will continue to deter physicians from participating in the WC program. The changes will take effect January 1, 2028.

We thank all the physicians and county society leaders who took the time to make a phone call, send a letter or tweet, and/or come to Albany to advocate on all these items on behalf of their colleagues and patients.