Dr. Mehmet Oz attends Healthcare Roundtable at Dominican University
Congressman Mike Lawler (NY-17) hosts Healthcare Roundtable with administrators from the Lower Hudson Valley at Dominican University. John Meore/lohud
New York hospitals and nursing homes were about to lose close to a billion dollars in funding before a local Congressman intervened to stave off the loss.
The Centers for Medicare & Medicaid Services announced this week that it would provide a nine-month extension period for New York State’s Managed Care Organization tax (also known as the MCO tax).
Local healthcare executives say the extension is thanks to the work of Rockland Republican Congressman Mike Lawler who lobbied Dr. Mehmet Oz, Administrator for the Centers for Medicare & Medicaid Services to keep the funding source in place for now.
Originally scheduled to be phased out on Mar. 31, 2026, the tax will now be phased out at the end of the calendar year on Dec. 31, 2026. The additional time allows the state to continue to generate funds from the MCO tax while giving health care organizations time to adjust to the end of the tax.
Congressman Mike Lawler, other advocates respond to MCO tax extension
Congressman Mike Lawler released a statement on Jan. 28 in response to the MCO tax extension, saying that he “advocated (for it) on behalf of my constituents and our health care services at every opportunity.”
“This additional time would allow hospitals, nursing homes and state administrators the necessary opportunity to adapt to the new policy without facing significant financial disruption,” Lawler said.
Lawler was a “strong advocate” for the extension, according to Montefiore Nyack Hospital president and CEO, Mark Geller.
“He brought Dr. Oz into the district — invited all the healthcare leaders in our metropolitan area, inside and outside this district — to meet with Dr. Oz (and tell him) things that we thought needed to be changed that were important to us,” Geller said. “Doctor Oz said to us, ‘if it’s important to Mike, it’s important to me, and I’m going to do my best to support you all.'”
“A longer runway on the MCO tax,” as Geller put it, was one of the items advocates asked for at the healthcare roundtable with Lawler, so that affected organizations could “make adjustments that we would need to make, match expenses and find other revenue.”
Kenneth Raske, the president of the Greater New York Hospital Association, an organization that also advocated for the MCO tax extension, agreed that the extension is a win for health care in New York.
“The bottom line is, all the dollars that go into the health care system are funneled into patient care services,” Raske said.
“Hospitals now won’t have to cut back in services to their communities,” Raske continued, adding that the extension “staves off those cuts until we can work through a more permanent in-compliance financing structure.”
Raske said that the extension “could produce upwards of a billion dollars” in “needed financial relief for health care institutions in New York State,” like hospitals and nursing homes.
The MCO tax, explained
The MCO tax is a tax on health insurance companies that draws in federal Medicaid funding for New York State. It specifically impacts Managed Care Organizations, or companies that run health plans for Medicaid and some private insurance customers in New York.
The main purpose of the MCO tax is bringing federal Medicaid dollars to New York.
According to a report from Spectrum News 1, the Center for Medicare & Medicaid Services announced in 2025 that it planned to change the policy, removing a funding source for Managed Care Organizations. Advocates of the MCO tax pushed for a longer transition period for the tax’s removal so that affected health care organizations have time find other funding sources and comply with the center’s rules.
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