SENATE BUDGET AND APPROPRIATIONS COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 2606

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 26, 2024

      The Senate Budget and Appropriations Committee reports favorably and with committee amendments Senate Bill No. 2606 (1R).

      As amended by the committee, this bill requires Medicaid reimbursement of mental health rehabilitation services provided via a clubhouse program.  Coverage of mental health rehabilitation services provided via a clubhouse program will not preclude the coverage of mental health services prescribed in conjunction with participation in a clubhouse program.  Under the amended bill, “clubhouse program” is defined as a non-residential, community-based psychosocial rehabilitation program accredited by Clubhouse International that is membership based and is designed to alleviate a member's emotional or behavior problems with the goal of transitioning the member to a less restrictive level of care, reintegrating the member into the community, and increasing social connectedness beyond a clinical or employment setting.  Members of the program, with staff assistance, engage in operating all aspects of the program, including food service, clerical, reception, janitorial and other member services such as employment training, housing assistance and educational support. 

COMMITTEE AMENDMENTS:

      The committee amendments expressly provide that the Medicaid coverage provided by the bill for mental health rehabilitation services provided via a clubhouse program will not preclude the coverage of mental health services prescribed in conjunction with participation in a clubhouse program.

FISCAL IMPACT:    

      The Office of Legislative Services (OLS) concludes that State Medicaid expenditures will increase during the first year following the bill’s effective date, in order for the State to fund mental health rehabilitation services, via an undetermined number of Clubhouse programs, for adults with serious mental illness.  By way of context, a 2018 Washington State Health Care Authority report on Clubhouse programs noted that Clubhouse advocates recommended an annual Clubhouse operating budget ranging from $600,000 for a smaller program to $800,000 for a larger program. While some states received federal approval to provide Medicaid reimbursement for certain services delivered through a Clubhouse program, not all Clubhouse services will be eligible for Medicaid coverage; at this time, however, the OLS cannot anticipate which specific Clubhouse services the federal government may approve for reimbursement under the State’s Medicaid program.

      To the extent that some services for adults with serious mental illness are approved for reimbursement under the State Medicaid program, the State may begin to realize some amount of savings in the second year of Clubhouse operations and beyond, in the form of inpatient hospitalizations or inpatient rehabilitation service costs avoided for Clubhouse members.  The amount of any potential State savings for inpatient treatment costs avoided will largely be determined by the number of Clubhouses operating in the State, the number of Clubhouse members who regularly attend the program, the proximity of the State’s Clubhouses to behavioral health services for program participants, and the reimbursement rates provided for Clubhouse program services under the State Medicaid program.  To the extent that federal Medicaid reimbursements are available for State expenditures for Clubhouse program services, State revenues will increase accordingly.