Albany, NY – Assemblywoman Amy Paulin (D–Westchester) announced today that the State 2026-27 enacted budget permanently carves out School-Based Health Centers (SBHCs) from Medicaid Managed Care, ensuring that SBHCs can continue to deliver essential care to underserved children across the state. This provision will allow SBHCs to permanently remain in the fee-for-service system, maintaining their financial viability and protecting access to healthcare for thousands of New York students.

“School-Based Health Centers are often the only place a child can receive physical, mental, and dental care, all in one place, at no cost,” said Assemblywoman Amy Paulin. “For too many students, losing this would have meant losing access to healthcare entirely.”

SBHCs serve over 250,000 students in rural, urban, and suburban schools, providing no-cost physical, mental, chronic, and dental health services directly on-site. These clinics remove barriers such as transportation, scheduling, and affordability, and often represent the only reliable source of care for uninsured or underinsured children.

For nearly four decades, SBHCs have been reimbursed through a fee-for-service model, carved out of Medicaid Managed Care. Repeated efforts by the Department of Health to eliminate the carve-out would have forced these centers into the managed care system, where lower reimbursements, prior authorization requirements, and administrative red tape could lead to clinic closures.

“If we had lost the fee-for-service model, we would have risked losing care for our state’s most vulnerable children,” Paulin added. “Protecting healthcare access for children is a top priority that must never be compromised.”

State Senator Gustavo Rivera (D–Bronx), who championed this measure in the Senate, agreed: “I'm incredibly proud that our push to permanently carve out School-Based Health Centers from Medicaid Managed Care has been included in the state budget. These centers provide comprehensive healthcare to approximately 250,000 children mostly in underserved communities across the State and transitioning them into managed care would have forced some of them to close their doors. I thank Governor Hochul and the entire Legislature for making this happen. Our children deserve it.”

Healthcare and children’s advocates applaud the change.

“The New York State School-Based Health Alliance, on behalf of the over 250 School-Based Health Centers (SBHCs) across the state, their dedicated health care staff, the children and families served are grateful to Governor Hochul, Assembly and Senate Health Committee Chairs and champions Amy Paulin and Gustavo Rivera, and the State Legislature who continue to make SBHCs a priority. As we watch healthcare rights and access erode across the country, it is imperative that our state remains laser-focused on sustaining existing quality and accessible care for our children of all identities through safety net programs like school-based health centers. We thank Governor Hochul for her work in making the SBHC Medicaid Managed Care carve out permanent," said Sarah Murphy, Executive Director of NYSBHA. “This permanent carve out is much needed, so that SBHCs may remain in Medicaid fee-for-service, allowing their time, staff efforts and resources to be exclusively focused on providing healthcare for children in our most urban and rural underserved communities.”

“School Based Health Centers are a trusted and essential source of care for children across New York. These centers already operate with limited resources and face ongoing financial instability. Moving them into managed care would have only added administrative complexity and threaten their ability to serve students. CHCANYS thanks our legislative champions for protecting SBHCs by supporting a permanent carve-out that ensures their sustainability and ability to meet the health needs of New York’s children,” said Rose Duhan, President and CEO of CHCANYS.

“The state has long recognized the importance of keeping school-based health clinics out of Medicaid managed care, and we are thrilled that this protection has finally been made permanent in the state budget,” said Bea Grause, RN, JD, president, Healthcare Association of New York State. “This will allow SBHCs to focus their limited resources on providing our most vulnerable youth access to the care they need and deserve. We thank Assemblymember Paulin and Senator Rivera, our esteemed Assembly and Senate health committee chairs, for their leadership on this important issue.”

“School-based health centers, including those operated by GNYHA member hospitals, provide critical primary care services to underserved public school children across the State. These services are provided at no cost to families regardless of their immigration status. We are proud that the state budget permanently carves SBHCs out of Medicaid Managed Care, protecting these critical safety net clinics from costly administrative burdens that would provide little to no benefit for the children they serve. This is a major victory for SBHC patients across New York," said Chatodd Floyd, Senior Vice President, Legislative Affairs, Greater New York Hospital Association.

“As a school-based dental provider serving over 100,000 low-income students each year, we strongly support the permanent carve-out of school-based health centers from Medicaid Managed Care, secured in this year’s state budget. Every day in New York, children miss school, cannot eat, and fall behind simply because they lack access to basic dental care. For many of these children, our program, which transforms classrooms into dental clinics, is the only place where they can receive treatment, relief, and find a reason to smile again,” said Smile NY Outreach. “This budget victory ensures we can continue serving the nearly 300,000 students who rely on these services for their health, confidence, and future.”

“With devastating cuts to healthcare on the horizon, this critical carve out ensures that our most vulnerable children will continue to receive the care they need at more than 250 school-based centers across New York state,” said Kim Utech, a nurse practitioner at Kaleida Health’s School Based Health Center in Buffalo who is an 1199SEIU member.

“This is about health equity,” said Paulin. “SBHCs reduce disparities, improve attendance and academic performance, prevent unnecessary emergency room visits, and provide critical medical and dental care to children who would otherwise go without. With this budget action, we’re protecting a system that works – and making sure our most vulnerable children don’t fall through the cracks.”