ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 5751

STATE OF NEW JERSEY

DATED:  JANUARY 8, 2026

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 5751.

As reported, the bill directs the Division of Medical Assistance and Health Services in the Department of Human Services to establish the Children’s Partial Hospitalization Pilot Program.  The goal of this pilot program is to expand the availability of partial hospitalization services for children ages five through 14 by providing NJ FamilyCare reimbursement for partial hospitalization services provided at non-hospital based locations. 

     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 bill, the division will select one applicant to participate in the pilot program.  The eligible applicant will: 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 service delivery location need not 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 will submit to the Governor and to the Legislature, a report summarizing the program’s implementation to date, and recommendations for the program’s continuation.  The pilot program will expire 36 months after the division selects the pilot’s participant.

FISCAL IMPACT:

      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.