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NY agrees to bolster mental services for children on Medicaid as part of class-action settlement
By
Caroline Lewis
Published Aug 8, 2025
Modified Aug 13, 2025
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By
Caroline Lewis
Published Aug 8, 2025
Modified Aug 13, 2025
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New York state has agreed to bolster delivery of mental health services for children insured through Medicaid, under a court settlement announced Friday.
The state agreed in the class-action settlement to increase Medicaid reimbursement rates for providers of children’s mental health services, a move intended to increase the number of care providers and reduce wait times for potentially thousands of children seeking help.
“ If children get the help they need when they need it in their homes and communities, you can avoid a lot of the more negative outcomes,” such as hospitalization, said Daniele Gerard, an attorney with the national advocacy organization Children’s Rights, which represented the plaintiffs along with Disability Rights New York, Proskauer Rose LLP, and the National Health Law Program.
Justin Mason, a spokesperson for the state Office of Mental Health, declined to comment directly on the settlement agreement, which still needs court approval before it is finalized.
“Ultimately, our goal is to ensure that our state delivers intensive home and community-based mental health services that serve the needs of all children and youth, including those covered by Medicaid,” Mason said.
The state denies any liability as part of the settlement.
The settlement comes in response to a complaint filed against the commissioners of the state Department of Health and Office of Mental Health in 2022. The plaintiffs are children with complex mental health needs whose guardians alleged New York was violating federal Medicaid law by not providing timely access to the array of intensive home- and community-based services they were entitled to.
These include intensive care coordination and interventions to help children modify their behaviors and build coping skills, among other services.
The lawsuit was filed on behalf of four children in different parts of the state whose guardians said they had to be hospitalized or placed in residential facilities because they were not receiving adequate care in the community. They also alleged the lack of robust mental health services was affecting their children’s education and other aspects of their lives.
Medicaid, a public insurance program for low-income residents, insures more than 2.5 million children statewide. Attorneys for the plaintiffs in the case estimate that thousands of children are entitled to the services covered in the settlement.
The state also agreed to strengthen access to mobile crisis services, which are designed to provide non-police responses to mental health crises. The settlement requires the state to report on performance indicators related to the timeliness and effectiveness of the services offered and develop a quality improvement plan, tracking progress on a public dashboard. The state has also agreed to submit to an annual independent audit of its services.
This story was updated with additional information.
Tagged
Health and Science
medicaid
mental health
new york state
Caroline Lewis
Caroline Lewis is on the health care beat for WNYC and Gothamist. She has covered COVID, a nurses' strike, the overdose crisis and New York’s marijuana legalization effort, and spent a year investigating patients' medical bills. She always wants to hear about how everyday New Yorkers experience the health system. Got a tip? Email [email protected].
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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