Human Services Legal & Regulatory Upate - Quarterly Newsletter
April 16, 2026
Bond, Schoeneck & King PLLC is pleased to share its April 2026 legal and regulatory update for human services providers. Contact Roger Bearden, Diana Waligora or the attorney with whom you regularly interact for assistance in understanding and navigating the impact of any of the below developments.
FEDERAL UPDATE
In early March, the Centers for Medicare & Medicaid Services (CMS) sought detailed information from the New York State Department of Health (NYSDOH) regarding its oversight of Medicaid programs. Specific programs under scrutiny included personal care, home health, adult day care, non-emergency medical transportation and behavioral health services. NYSDOH responded to CMS’s letter with a detailed rebuttal. The ongoing dialogue between CMS and NYSDOH likely signals an increased federal focus on Medicaid program integrity and oversight in New York.
Other fraud, waste and abuse (FWA) actions included the formation of the Task Force to Eliminate Fraud, chaired by the Vice President, charged with stopping fraud, waste and abuse in federal benefit programs. The Executive Order establishing the Task Force identified California, Colorado, Illinois, Maine, Minnesota and New York as states of particular focus. In late February, CMS also released a Request for Information (RFI) Related to Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH), seeking public comment on potential regulatory changes that could be included in a future proposed rule.
The Office of Inspector General of the U.S. Department of Health and Human Services (HHS) is continuing audits of Medicaid Applied Behavior Analysis (ABA) services for children diagnosed with autism. Although New York has not yet been the subject of audit findings, ongoing federal scrutiny of ABA services is expected in this fast-growing area of Medicaid services.
Providers subject to 42 CFR Part 2 substance use disorder regulations were required to update their notice of privacy practices by the Feb. 16, 2026, deadline set forth in the 2020 Coronavirus Aid, Relief and Economic Security (CARES) Act. Please refer to prior Bond guidance for additional information.
NEW YORK STATE UPDATE
Legislative Activity
The Governor and Legislature did not reach an agreement on the state budget by the beginning of the state fiscal year on April 1, 2026, and budget negotiations are ongoing. Neither the Governor’s executive budget proposal nor either the Assembly or Senate one-house bills contained provisions that had significant compliance implications for human services providers.
Significant legislative activity in the first quarter of 2026 has been limited to the passage and enactment of chapter amendments agreed upon between the Governor and the Legislature to modify bills passed in 2025. As highlighted in our January 2026 compliance update, the Medical Aid in Dying (MAID) Act will permit mentally competent, terminally ill adults with a prognosis of six months or less to request that a physician prescribe medication that the individual may self‑administer to hasten death. The Legislature passed, and the Governor signed, a chapter amendment to the MAID Act clarifying provisions in the bill signed into law last year.
Regulatory Activity
In February, the Governor announced a deregulatory initiative called EXPRESS NY (Expediting Processes and Regulations to Enable Streamlined Services), which seeks to streamline regulations and improve government efficiency, with an April 3, 2026, deadline for public comment. Implementation of any recommendations would require subsequent rulemaking action by the affected agencies.
The Office for People With Developmental Disabilities (OPWDD) published proposed updates to regulations governing clinics licensed under Article 16 of the Mental Hygiene Law. These proposed regulations focus on regulatory relief, clinic operations, clinical services and service delivery. OPWDD also announced the selection of vendors for Home-Enabling Supports, a new Home and Community Based Services (HCBS) offering.
The Office of Mental Health (OMH) announced proposed updates to its regulations governing Mental Health Outpatient Treatment and Rehabilitative Service (MHOTRS) program, which are intended to advance provider operational flexibilities.
For providers supporting children with mental illness, the settlement of the longstanding C.K. v. McDonald class action litigation will drive significant changes in the provision of mental health services to children and youth enrolled in New York’s Medicaid program. The settlement requires New York State to overhaul its Medicaid children’s mental health system and emphasizes expanded in-home care and a reduction of reliance on institutional care through strengthened services and expanded overall provider capacity. As these reforms are implemented, the temporary moratorium on licenses for new Children and Family Treatment and Support Services (CFTSS) providers remains in effect.
Late last year, the Nursing Home Transition and Diversion (NHTD) Medicaid waiver program reached its maximum capacity and was closed to additional referrals. As explained in the NYSDOH notice, a 1915(c) HCBS waiver is approved for a maximum number of participants, and when that number is met, a state must apply to amend the waiver or pause enrollment.
The Office of Medicaid Inspector General (OMIG) released a new audit protocol for Health Homes serving adults. The audit protocol for Care Coordination Organizations (CCOs) remains under development, as are the protocols for Telehealth, ABA, CFTSS and Children’s HCBS.
Bond, Schoeneck & King PLLC will continue to monitor these legal and regulatory developments and provide updates as they become available. To receive updates on issues impacting the human services industry, register here.
