SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 1192

with committee amendments

STATE OF NEW JERSEY

DATED:  MARCH 17, 2025

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 1192 (1R).

     As amended and reported, this bill requires health insurance carriers and the State Medicaid and NJ FamilyCare programs to provide coverage for a prescription drug prescribed for serious mental illness to covered persons without the imposition of any prior authorization or other utilization management requirements, including, but not limited to, a step therapy protocol.

     Under the bill, “carrier" is defined to mean an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State or any entity contracted to administer health benefits in connection with the State Health Benefits Program or School Employees' Health Benefits Program.

     The bill defines “serious mental illness” to mean the following psychiatric illnesses, as defined in the most current version of the Diagnostic and Statistical Manual of Mental Disorders:

     (1)   schizophrenia, schizo-affective disorders including bipolar and depressive, and bipolar disorders including hypomanic, manic, depressive, and mixed;

     (2)   major depressive disorders, whether a single episode or recurrent, including, but not limited to, any major depressive disorder with peripartum onset; and

     (3)   post-traumatic stress disorder.

COMMITTEE AMENDMENTS:

      The committee amended the bill to remove certain illnesses from the definition of “serious mental illness.”

FISCAL IMPACT:

      The Office of Legislative Services (OLS) concludes that this bill would increase annual State expenditures for prescription drugs under the NJ FamilyCare program (the State’s Medicaid and Children’s Health Insurance Program), the State Health Benefits Program (SHBP), and the School Employees’ Health Benefits Program (SEHBP) by an indeterminate amount.  Annual expenditures for local governments and school districts would also increase by an indeterminate amount annually.

      These expenditure increases would be due to the bill’s prohibition on utilization management requirements for the coverage of prescription drugs for serious mental illness.  Instead, health care providers would be allowed to select drugs for patients with these conditions without any restrictions.

      There is a potential for annual cost savings to public sector employers if the bill’s provisions were to cause positive health outcomes that reduce future treatment costs.  Higher NJ FamilyCare expenditures would increase annual State revenue by an indeterminate amount from federal Medicaid and Children’s Health Insurance Program matching funds.