NYS Department of Health AI Solutions in Healthcare (part of FY27 Budget initiatives)

NYS Department of Health AI Solutions in Healthcare (part of FY27 Budget initiatives) is sponsored by New York State Department of Health (NYSDOH). As part of the FY27 Enacted Budget, Governor Hochul's initiatives include incentivizing partnerships between safety net hospitals and other healthcare partners to implement AI solutions that improve quality of care and strengthen operations in New York State.

5. FY 2027 Executive Budget Agency Web Site: https://www. health.

ny. gov/ The mission of the Department of Health (DOH) is to ensure high quality health services are available to all New Yorkers. The Department is also the principal State agency that administers the Medicaid Program, the NY State of Health (NYSOH) Exchange, and other public health and health insurance programs.

The Department operates health care facilities including Helen Hayes Hospital, four veteran’s nursing homes, and the Wadsworth Centers for Laboratories and Research. In addition, DOH conducts oversight of health professionals and all other health care facilities to ensure that high quality, cost effective, health care alternatives are provided throughout the State.

## Organization and Staffing DOH is headed by a Commissioner, who is appointed by the Governor and subject to Senate confirmation. The Agency is organized into five major business units: the Office of Public Health; the Office of Primary Care and Health Systems Management; Institutional Management; the NY State of Health; and the Office of Health Insurance Programs which operates the Medicaid Program.

Each of these business units contains multiple divisions and bureaus that work together to carry out DOH’s mission.

The workforce is spread out across the State, encompassing employees of the central office in Albany, four regional offices (located in Syracuse, New York City, Long Island, and Buffalo), the Wadsworth Center Public Health Laboratories, Helen Hayes Hospital (located in Haverstraw) as well as employees of the New York State Veterans’ Homes (located in Oxford, Queens, Batavia, and Montrose).

### Child Health Plus (CHP) CHP provides comprehensive health coverage for children up to age 19 with family incomes above Medicaid eligibility levels. Like Medicaid, CHP is administered by states with guidance from the Centers for Medicare and Medicaid Services (CMS) and is jointly funded by the Federal government and states. Currently, over 550,000 children in New York receive health coverage through CHP.

Families with incomes below 222 percent of the Federal Poverty Level (FPL) receive free coverage for their children, and families with incomes over that threshold pay on a sliding scale, from $15-$60/month per child. Enrollees in CHP receive primary, preventive, specialty, and inpatient care. Federal funding for the Children's Health Insurance Program (CHIP) has been reauthorized through FFY 2027.

### Elderly Pharmaceutical Insurance Coverage (EPIC) The EPIC program provides drug coverage to income-eligible seniors aged 65 and older to supplement out-of-pocket Medicare Part D costs. This program serves approximately 280,000 seniors annually and is financed entirely with State funds, offset by revenues from fees paid by EPIC members and rebates from drug manufacturers for generic drugs.

The federal Patient Protection and Affordable Care Act (ACA) provides a phase-out of the Medicare Part D coverage gap (ended January 2020). The closure of the coverage gap will result in Medicare Part D picking up a larger share of program costs that were previously covered in EPIC.

The EP provides health coverage for individuals with family incomes between 138 and 250 percent of the Federal Poverty Level (FPL) and for individuals from 0-138 percent FPL who are lawfully present in the United States but do not qualify for federal Medicaid due to their immigration status. The program has been extraordinarily successful, enrolling over 1.

7 million New Yorkers, and providing a comprehensive package of benefits which include primary, preventive, specialty, and inpatient care. The State receives Federal funding through the 1332 State Innovation Waiver based on the amount of Premium Tax Credits that would have been provided to individuals in the State under the ACA, absent the Waiver. However, due to provisions included in H.

R. 1, the EP will lose over half of its current funding and cannot continue offering EP through the Waiver. Therefore, to maintain coverage for as many New Yorkers as possible, the State submitted an application to CMS requesting to reactivate the Basic Health program under section 1331 of the ACA beginning in July 2026.

Absent federal approval, the Financial Plan assumes that the transition to the Basic Health Program will not take effect. Federal payments will be made as costs are incurred, and all Federal funds must be used for the purpose of implementing the program. Medicaid is a means-tested program that finances health care services to approximately 6.

8 million low-income individuals and long-term care services for the elderly and disabled, primarily through payments to over 80,000 health care providers and more than 35 fully and partially capitated managed care plans. The Medicaid program is financed jointly by the State, the Federal government, and local governments.

Eligible services include inpatient hospital care, outpatient hospital services, clinics, nursing homes, managed care, prescription drugs, home care and services provided in a variety of community-based settings (including mental health, substance abuse treatment, developmental disabilities services, school-based services and foster care services).

### NY State of Health (NYSOH) Established in 2013 in accordance with the ACA, NY State of Health was built as a fully integrated marketplace across public and private programs, including Medicaid, Child Health Plus, Essential Plan, and Qualified Health Plans.

The Qualified Health Plans offered through NYSOH are significantly less expensive than those available prior to the creation of the marketplace, and is the only place where consumers can qualify to get help paying for coverage through premium tax credits.

NYSOH also has federal authorization under section 1332 of the ACA to operate the Essential Plan, which offers lower-income New Yorkers comprehensive benefits with no premium or annual deductible and very low-cost sharing. Provided federal approval to reactivate the Basic Health Program under section 1331 of the ACA, NYSOH will continue to operate the Essential Plan. Currently, over 6.

6 million, or more than one in three New Yorkers, are enrolled in coverage through the marketplace. Commensurate with increased enrollment in NY State of Health, the number of uninsured New Yorkers has declined by over 1. 3 million since 2010, and as of the end of 2024, the share of uninsured in New York remains at 5 percent.

The Executive Budget includes $722 million in funding for the operation of NYSOH. This total includes additional funding for the implementation of Medicaid Community Engagement needs and eligibility changes related to H. R.

1. DOH promotes and protects the health of people and the communities where they live, learn, work, and play. These efforts work to prevent people from getting sick or injured and promote wellness.

DOH staff are responsible for responding to a wide range of public health issues including tracking disease outbreaks, educating the public about the health risks caused by alcohol and tobacco, and developing school nutrition programs. Major programs include: * **General Public Health Work (GPHW).

** The GPHW program, authorized under Article 6 of Public Health Law, provides reimbursement to counties and New York City for six mandated core public health services (Family Health, Communicable Disease Control, Chronic Disease Prevention, Community Health Assessment, Emergency Preparedness, and Environmental Health) by providing base grants and covering 36 percent of the remaining net costs, except for New York City, which is 20 percent.

* **Early Intervention (EI). ** The EI program provides a comprehensive array of therapeutic and support services to children under the age of three with confirmed disabilities (e.g., autism, cerebral palsy) or developmental delays. The program serves over 70,000 children annually and is jointly financed by Federal, State, and local governments.

The FY 2027 Executive Budget recommends $137 billion in appropriations for DOH, a $124 million increase from FY 2026. This includes $119. 1 billion for Medicaid, $6.

9 billion for the Essential Plan, and $11 billion for remaining health program spending. This year-to-year change primarily reflects statutory allowable growth in State Medicaid funding and increases related to funds collected and invested through the Healthcare Stability Fund offset by the expected termination of the 1332 Waiver while the transition to the 1331 Basic Health Program is pending federal approval.

The Budget recommends a workforce of 6,220 full time equivalent employees (FTEs) for the Department. This is an increase of 11 FTEs from the FY 2026 budget.

Increases are related to investments to strengthen oversight of material transactions, improve enforcement of taxes on vapor products, strengthen cardiac emergency readiness within New York State, expand the use of artificial intelligence in healthcare safely and equitably, and to alleviate barriers to hearing loss screenings and language acquisition services for children who are potentially deaf, deafblind, or hard of hearing.

Major budget initiatives include: **Continuing the State Takeover of Local Medicaid Costs:** In FY 2027, the State will assume nearly $9. 2 billion in costs that would have otherwise been incurred by localities. This is an annual multi-billion-dollar relief package to the localities that continues to grow by billions of dollars, annually.

Since 2015, counties have saved $62. 8 billion due to the local takeover. **Safety Net Hospital Transformation Program:**The FY 2026 Budget invested an additional $1 billion in capital projects to expand the existing Safety Net Transformation Program, to meet demand beyond existing resources, support additional partnerships, and enable longer-term commitments.

Building on this momentum, the FY 2027 Budget further expands the SNTP by providing $1 billion in additional capital support and a minimum of $330 million in operating funding supported by MCO tax revenue to support new and existing partnerships that will strengthen the long-term financial sustainability and quality of care at safety-net hospitals.

**Transition to the****Medicaid Enterprise Client Management (MECM) System:** The Executive Budget allocates additional resources to support system updates necessary for completing the transition of local Medicaid administration duties to the State. This critical digital infrastructure project will relieve local districts of the increasing demand of complex eligibility decisions.

**MCO Tax:**In December 2024, the State secured CMS approval to implement a new Managed Care Organization (MCO) tax which supports healthcare investments throughout the State. Federal guidance implies New York’s MCO tax will conclude at the end of the fiscal year, enabling five quarters of collections.

The Budget will seek to utilize available funding for targeted investments and the sustainability of the Medicaid program across hospitals, nursing homes, and other critical services. **Hospital and Nursing Home Investments:**The Budget will include an additional $750 million ($500 million recurring) in new General Fund resources to support targeted health care investments in the Healthcare Stability Fund.

These resources will be allocated for critical services provided by the State’s hospitals and nursing homes. **Reproductive Health:** The Budget continues the historic investments from FY 2026 in reproductive health of $20 million in funding for medication and $25 million for abortion care access. The Budget will also continue $10 million in annual funding under the reproductive health care improvement capital grants program.

**Nutrition Program Funding:**The Budget continues record-level investments for the Hunger Prevention and Nutrition Assistance Program (HPNAP) ($23. 3 million) and Nourish NY Program ($5 million), and invests $15 million in additional funding for HPNAP, increasing funding over the previous Enacted budget’s level .

**Providing Local Access to Essential Sustenance (PLATES):**The budget will invest $10 million in capital resources to support grants for food banks and other organizations that provide emergency food assistance.

This new grants program will be administered in collaboration with the New York State Dormitory Authority, and will enhance the State’s capacity to combat hunger and food insecurity in the wake of federal cuts to critical nutrition assistance programs.

For more information on this agency's budget recommendations located in the Executive Budget Briefing Book, click on the following link: Briefing Book – Health Care | Child Health Insurance | | Center for Community Health | | Center for Environmental Health | | Elderly Pharmaceutical Insurance Coverage | | Health Care Reform Act Program | | Institutional Management | | Medical Assistance Administration | | New York State of Health | | Office of Health Insurance Programs | | Office of Primary Care and Health Systems Management | | Wadsworth Center for Laboratories and Research | | Center for Community Health | | Center for Environmental Health | | Child Health Insurance | | Elderly Pharmaceutical Insurance Coverage | | Health Care Reform Act Program | | Institutional Management | | Medical Assistance Administration | | New York State of Health | | Office of Health Insurance Programs | | Office of Primary Care and Health Systems Management | | Wadsworth Center for Laboratories and Research | STATE OPERATIONS - GENERAL FUND STATE OPERATIONS - GENERAL FUND FY 2027 RECOMMENDED CONTINUED STATE OPERATIONS - GENERAL FUND STATE OPERATIONS - GENERAL FUND FY 2027 RECOMMENDED CONTINUED STATE OPERATIONS - GENERAL FUND FY 2027 RECOMMENDED CONTINUED STATE OPERATIONS - OTHER THAN GENERAL FUND STATE OPERATIONS - OTHER THAN GENERAL FUND FY 2027 RECOMMENDED CONTINUED | Center for Community Health | | Center for Environmental Health | | Child Health Insurance | | Elderly Pharmaceutical Insurance Coverage | | Health Care Reform Act Program | | Medical Assistance Administration | | Office of Health Insurance Programs | | Office of Primary Care and Health Systems Management | | Wadsworth Center for Laboratories and Research | | All Payers Claims Database | | Capital Restructuring Program for Health Care and Related Facilities | | Emergency Medical Services Modernization | | Facilities Maintenance and Operations | | Grants for Food Banks | | Health Care Data Modernization | | Health Care Facility Transformation Program | | IT Initiatives Program | | Laboratories and Research | | Maintenance and Improvements of Existing Institutions | | Reproductive Healthcare Improvement Program | | Statewide Health Information Network For New York | Note: Most recent estimates as of 01/20/2026