This bill mandates that contracts established on or after its effective date between the Division of Mental Health and Addiction Services and the Division of Developmental Disabilities in the Department of Human Services (DHS) must include an annual cost of living adjustment (COLA) for organizations providing mental health services, substance use disorder treatment services, or services to individuals with developmental disabilities. The COLA will be determined based on the Consumer Price Index for the previous 12-month period, specifically from October 1 to September 30, as published by the United States Department of Labor. Additionally, the DHS is required to announce the rate of this adjustment each year on October 1.

The bill also clarifies that the term "program providing mental health services, substance use disorder treatment services, or services to persons with developmental disabilities" encompasses State programs that are either partially or fully funded by Medicaid and are licensed or approved by the Commissioner of Human Services or other relevant State licensing entities. The Commissioner of Human Services is tasked with adopting necessary rules and regulations to implement the provisions of this act, which is set to take effect immediately.