LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 5751

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JANUARY 8, 2026

 

 

SUMMARY

 

Synopsis:

Directs DHS to establish Children's Partial Hospitalization Pilot Program.

Type of Impact:

Three-year State expenditure and revenue increases.

Agencies Affected:

Department of Human Services.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Three-Year Duration of the Pilot Program

 

State Expenditure Increase

Up to $13,000 per Child in Pilot Program

 

State Revenue Increase

Up to $6,500 per Child in Pilot Program

 

 

·         The Office of Legislative (OLS) concludes that the Department of Human Services will incur up to $13,000 per child who receives partial hospitalization services under the three-year pilot program in the form of increased NJ FamilyCare costs.  As eligible NJ FamilyCare expenditures receive federal reimbursement, this bill will also increase annual State revenue up to $6,500 per child in the pilot program, assuming a 50 percent federal match for State NJ FamilyCare costs.

 

·         This estimate is based upon the approved pilot applicant providing each eligible child up to the maximum amount of weekly partial hospitalization service hours allowed, over a six-month period.  If services are provided over a longer duration, this estimate would increase accordingly.  The number of children who may receive partial hospitalization services via the approved pilot applicant is unpredictable, and therefore, the aggregate cost of this bill is unknown..

 

·         To the extent that the department incurs costs to administer the pilot program, this expenditure estimate would increase. 

 

 

BILL DESCRIPTION

 

      This bill directs the Division of Medical Assistance and Health Services in the Department of Human Services to establish a Children’s Partial Hospitalization Pilot Program.  Children’s partial hospitalization services are intensive, highly structured outpatient treatment services that provide individualized, outcomes-oriented psychiatric services designed for youth and young adults and that are intended to minimize the need for inpatient hospitalization.  Currently, to qualify for NJ FamilyCare reimbursement, partial hospitalization services must be provided in a hospital setting.  Under the pilot program, partial hospitalization services are authorized to be permitted in a non-hospital setting.

      The bill directs the division is to select one applicant to participate in the pilot program, at which point the three-year program is to commence.  The eligible applicant is required to: demonstrate an established plan for implementation; exclusively provide partial hospitalization services to children ages five through 14; meet all existing federal and State requirements for reimbursement of children’s partial hospitalization services under NJ FamilyCare, except that the location of service delivery does not need to be a licensed hospital; and apply to the Department of Children and Families for approval as a provider within the Children’s System of Care. 

      No later than 36 months after the division selects the pilot’s participant, the division is required to submit to the Governor and to the Legislature a report regarding the status of the program.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the Department of Human Services will incur up to $13,000 per child who receives partial hospitalization services under the three-year pilot program.  As eligible NJ FamilyCare expenditures receive federal reimbursement, this bill will also increase annual State revenue up to $6,500 per child in the pilot program, assuming a 50 percent federal match for State NJ FamilyCare costs, for a net State cost of up to $6,500 per child under the program.  The number of children who may receive partial hospitalization services via the approved pilot applicant is unpredictable, and therefore, the aggregate cost of this bill is unknown.

      Currently, partial hospitalization services for children ages five through 14 are reimbursed under the NJ FamilyCare fee-for-service delivery system.  According to the department, the hourly reimbursement rate for pediatrics is $19.89, with services limited to five hours a day, 25 hours a week.  Moreover, authorization for partial hospitalization services is not to exceed: 1) six months without written permission; or 2) 12 months without a discharge plan that provides for a transition to other community-based interventions and supports within the following three months.  This estimate is based upon the approved pilot applicant providing each eligible child up to the maximum amount of weekly partial hospitalization service hours allowed, over a six-month period.  If services are provided over a longer duration, this estimate would increase accordingly.

      To the extent that the department incurs costs to administer the pilot program, this expenditure estimate would increase.

 

 

Section:

Human Services

Analyst:

Sarah M. Schmidt

Principal Research Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).