May 8, 2008

Dear Colleague:

The New York State Office of Mental Health is pleased to inform you about an important regulatory change that has for over a decade created limitations on the capacity of outpatient mental health programs to effectively respond to clinical need in their communities. This is a landmark change in NYS Mental Health regulation.

Effective April 30, 2008, it became no longer necessary to document the availability of the state share of Medicaid and/or local assistance as part of a proposed program expansion of a licensed outpatient program. The so-called Medicaid Neutrality Cap has been eliminated.

In order to further assist outpatient clinics with responding to community needs, OMH will also be shortening the PAR application form, which we will brief you on in an upcoming communication. OMH further intends to propose regulatory changes to streamline the PAR review process.

We hope you share our enthusiasm for the end of this regulatory limitation, and we look forward to working with you to improve the PAR process.

Attached you will find detailed information on this change. If you have questions regarding Part 551 or the PAR process, please contact staff in your OMH Field Office or in the Bureau of Inspection and Certification at (518) 474-5570.

Sincerely yours,

Lloyd Sederer, MD
Medical Director

Jayne Van Bramer
Director, Office of Quality Management