12/21/2025
Managed Care Organizations (MCOs) are funded by taxpayer dollars meant for patient care.
MCOs are required to spend most of their Medicaid payments on direct services for people with serious mental health and substance use needs. Yet for years, many failed to meet this standard while being paid as if they had, allowing hundreds of millions of dollars to sit unused, earning interest, instead of funding care for New Yorkers.
After sustained advocacy, the Hochul Administration began recouping these funds last year. But the larger truth remains: when enforcing basic compliance takes years, the system itself is broken. You cannot regulate your way to accountability when profit incentives reward noncompliance.
This is evident in companies like Maximus Inc (https://maximus.com/) a major Medicaid contractor, which reports high-single-digit operating profit margins, profits generated not from care delivery, but from administering and managing public programs.
The solution isn’t more oversight; it’s structural change. Remove profit-driven middlemen, carve community-based behavioral health services out of Medicaid managed care, and reinvest the $400M now retained by insurers into actual care, not insurer profits.
Alliance for Rights and Recovery Association for Community Living Citizens Committee for Children Coalition of Community Services Coalition of Medication Assisted Treatment Providers & Advocates Families Together in New York State FOR-NY Federation of Mental Health Services HealthyMinds, HealthyKids...
