Directs DHS to establish Children's Partial Hospitalization Pilot Program.

S3523

SENATE, No. 3523

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Senator� JAMES BEACH

District 6 (Burlington and Camden)

SYNOPSIS

���� Directs DHS to establish Children�s Partial
Hospitalization Pilot Program.

CURRENT VERSION OF TEXT

���� As introduced.

��

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.���� C
hildren 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
.