A2490

An Act establishing a licensure pathway for non-hospital based inpatient residential mental health treatment facilities.

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

1. The Legislature finds and declares:

a. New Jersey faces a growing crisis of mental health and substance use disorders, particularly among adolescents and adults, with increasing rates of depression, anxiety, and substance abuse.

b. The State faces a shortage of mental health professionals, with nearly 40,000 residents living in areas lacking adequate access to mental health experts and services, straining both public and private hospital facilities and limiting their capacity to meet demand.

c. Current inpatient mental health services in New Jersey are provided exclusively in hospital settings, such as Summit Oaks, Hampton Behavioral Health, and Carrier Clinic, which focus on short-term psychiatric stabilization rather than mid-to-long-term treatment involving medication management, skill based therapies, and holistic, trauma based, personalized, and somatically derived services.

d. The lack of non-hospital based inpatient residential mental health treatment facilities leaves a critical gap in care for adolescents and adults requiring comprehensive treatment for 45 to 120 days, contributing to untreated mental illness, increased hospitalizations, and higher long-term costs.

e. States such as Pennsylvania and Florida have successfully legislated, regulated, and licensed non-hospital based inpatient residential mental health treatment facilities, demonstrating the feasibility and effectiveness of such services.

f. Establishing a rigorous licensure pathway for private professionals to operate non-hospital based inpatient residential mental health treatment facilities, coupled with initiatives to address the mental health professional shortage, would improve access to comprehensive care and alleviate strain on hospital systems in the State.

2. As used in this act:

“Non-hospital based inpatient residential mental health treatment facility" means a licensed facility, not affiliated with a hospital, that provides mid-to-long-term, 45 to 120 days, inpatient mental health treatment, including medication management, skill based therapies, and holistic, trauma based, personalized, and somatically derived services for adolescents and adults.

“Adolescent" means an individual between the ages of 12 and 21.

"Division" means the Division of Mental Health and Addiction Services within the Department of Human Services.

"Department" means the Department of Health.

3. a. The Division of Mental Health and Addiction Services, in collaboration with the Department of Health, shall establish a licensure pathway for non-hospital based inpatient residential mental health treatment facilities serving adolescents and adults in the State.

b. Licensure requirements shall include, but not be limited to:

(1) accreditation by a nationally recognized body, such as the Joint Commission, to ensure compliance with evidence-based treatment standards;

(2) minimum staffing ratios, including licensed psychiatrists, psychologists, and therapists trained in trauma informed care, with at least one licensed clinical supervisor per facility;

(3) mandatory training for all staff in trauma-based, personalized, and somatically derived therapies, with annual continuing education requirements, including specialized training for adolescent care;

(4) comprehensive treatment plans for each patient, incorporating medication management, skill based therapies including cognitive-behavioral therapy and dialectical behavior therapy, and holistic services including mindfulness and somatic therapy;

(5) facility safety and operational standards, including secure environments, emergency protocols, and capacity limits to ensure individualized care;

(6) rigorous qualifying procedures for operators, including a minimum of five years of experience in mental health service provision, financial stability, and a detailed operational plan reviewed by the Division; and

(7) regular inspections by the Department of Health, with unannounced visits at least annually, and a public reporting mechanism for compliance findings.

c. The Division shall develop regulations for licensure within 180 days of the effective date of this act, incorporating public comment from mental health professionals, patient advocates, and other stakeholders to ensure robust and feasible standards.

d. The Department of Health shall issue licenses to qualifying facilities and maintain a public registry of licensed facilities.

e. The Division shall provide technical assistance to private professionals seeking licensure, including guidance on regulatory compliance, facility design, workforce recruitment, and integration with existing mental health services.

f. Licensed facilities shall submit annual reports to the Division, detailing patient outcomes, treatment modalities, staffing levels, and compliance with licensure standards.

4. a. The Department of Labor and Workforce Development, in collaboration with the Department of Human Services, shall establish a Mental Health Workforce Development Program to address the shortage of licensed mental health professionals in the State.

b. The Mental Health Workforce Development Program shall include:

(1) grants for training programs to increase the number of licensed mental health professionals, with a focus on adolescent care;

(2) loan forgiveness programs for mental health professionals who commit to practicing in the State for a minimum of five years; and

(3) competitive salary incentives to retain clinicians in the State.

c. The Department of Human Services shall explore policies to facilitate licensure reciprocity and telehealth services to increase the availability of mental health professionals.

5. a. The Division shall establish protocols to ensure non-hospital-based inpatient residential facilities are integrated into the State’s mental health service continuum, including:

(1) referral pathways from hospitals, outpatient providers, and crisis units to licensed residential facilities;

(2) coordination with insurance providers to ensure coverage for services provided by licensed facilities, consistent with State and federal parity laws.

b. The Department of Health shall monitor the impact of licensed facilities on hospital inpatient capacity and report findings to the Legislature annually.

6. a. The Division of Mental Health and Addiction Services, in collaboration with the Department of Health and the Department of Labor and Workforce Development, shall submit an annual report to the Governor and the Legislature on the implementation of this act.

b. The report shall include data on the number of licensed facilities, patient outcomes, reductions in hospital inpatient admissions, workforce development program outcomes, staffing levels, and compliance with licensure standards.

7. This act shall take effect immediately and shall apply to the fiscal year following the date of enactment.

STATEMENT

This bill establishes the New Jersey Mental Health Residential Reform Treatment Act.

The New Jersey Mental Health Residential Reform Treatment Act addresses the critical gap in the State’s mental health care system by establishing a licensure pathway for non-hospital based inpatient residential mental health treatment facilities for adolescents and adults, coupled with initiatives to address the shortage of mental health professionals. These facilities will provide mid-to-long-term, 45 to 120 day treatment, including medication management, skill based therapies, and holistic, trauma-based, personalized and somatically derived services; unlike hospital based services that focus solely on short-term psychiatric stabilization. By addressing the mental health professional shortage, which impacts about 40,000 residents, and the strain on hospital capacity, this act will improve access to comprehensive care, reduce long-term costs associated with untreated mental illness, and align New Jersey with states like Pennsylvania and Florida that have successfully implemented such services. Rigorous licensing requirements ensure patient safety and high quality care, fostering a new model of mental health treatment in the State.