This bill establishes a requirement for annual cost of living adjustments for contracts between the Divisions of Mental Health and Addiction Services and Developmental Disabilities within the New Jersey Department of Human Services (DHS) and programs that provide mental health services, substance use treatment, or services to individuals with developmental disabilities. The adjustments will be 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. The DHS is mandated to announce the rate of these adjustments on October 1 of each year.

Additionally, the bill clarifies that the term "program providing mental health services, substance use treatment services, or services to persons with developmental disabilities" includes 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 also tasked with adopting rules and regulations to implement the provisions of this act, which is set to take effect immediately upon passage.