A998

An Act concerning children’s partial hospitalization services.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds and declares that:

a. Children with mental health disorders such as severe anxiety, depression, or bipolar disorder often need more care and support than can be provided in outpatient therapy, but not at a level of care that requires admission into an inpatient setting;

b. Partial Hospitalization Programs (PHPs) offer families a clinically appropriate alternative to outpatient and inpatient care in a structured, safe environment;

c. In a PHP, a child receives intensive treatment for several hours a day and returns home after services are delivered, which can help the youth maintain a sense of independence, responsibility, and connection.

d. PHPs are critical to diverting high-needs, at-risk youth from costly institutionalized settings while still providing the necessary level of care in a lower-cost environment;

e. Currently, to qualify for NJ FamilyCare reimbursement, partial hospitalization services must be provided in a hospital setting – limiting the availability of these important programs to the vast number of youth enrolled in NJ FamilyCare with mental health needs, as well as the State’s ability to leverage federal Medicaid matching funds for these services; and

f. It is appropriate and fitting for the Legislature to establish a temporary program that requires the Department of Human Services to implement certain flexibilities in setting requirements for NJ FamilyCare reimbursement for these services, when delivered to a child, in order to investigate the positive clinical and budgetary outcomes that may result from such changes.

2 a. There is hereby established in the Division of Medical Assistance and Health Services in the Department of Human Services the Children’s Partial Hospitalization Pilot Program. The goal of this pilot program shall be to expand the availability of partial hospitalization services for children ages five through 14 by providing reimbursement under the NJ FamilyCare program for partial hospitalization services provided at a non-hospital based location.

b. The division shall select one applicant to participate in the pilot program. An eligible applicant for the pilot program shall:

(1) demonstrate an established plan for implementation;

(2) exclusively provide partial hospitalization services to children ages five through 14;

(3) 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 shall not be a hospital licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.); and

(4) apply to the Department of Children and Families for approval as a provider within the Children’s System of Care.

c. The division shall establish a process by which an applicant shall apply for approval to participate in the pilot program.

d. No later than 36 months after the division selects the pilot’s participant, the division shall submit to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a report that summarizes the implementation of the program to date, as well as recommendations for the continuation and expansion of the pilot program.

e. As used in this section:

“NJ Family Care” means the program established pursuant to P.L.2005, c.156 (C.30:4J-8 et al.) and the State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

“Children’s Partial Hospitalization Services” means an intensive, highly structured outpatient treatment program that provides individualized, outcomes-oriented psychiatric services designed for youth and young adults and that is intended to minimize the need for inpatient hospitalization.

3. The Commissioner of Human Services shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this act and to secure federal financial participation for State Medicaid expenditures under the federal Medicaid program.

4. The Commissioner of Human Services, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations necessary to implement the provisions of this act.

5. This act shall take effect immediately and shall expire 36 months after the Division of Medical Assistance and Health Services in the Department of Human Services selects the participant of the Children’s Partial Hospitalization Pilot Program, pursuant to subsection b. of section 2 of this act.

STATEMENT

This 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 reimbursement under the NJ FamilyCare program - the State’ s health insurance program for eligible, low-income persons - 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 is to select one applicant to participate in the pilot program. 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. The Children’s System of Care is New Jersey’s public behavioral health system for youth under 21 years of age.

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 that summarizes the implementation of the program to date, as well as recommendations for the continuation of the program. The pilot program shall expire 36 months after the division selects the pilot’s participant.