The bill establishes the Children's Partial Hospitalization Pilot Program within the Division of Medical Assistance and Health Services in the Department of Human Services. The program aims to enhance the availability of partial hospitalization services for children aged five to 14 by allowing reimbursement under the NJ FamilyCare program for services provided at non-hospital locations. To participate, applicants must meet specific criteria, including having a plan for implementation, exclusively serving the target age group, operating in a qualifying county and municipality, adhering to existing federal and state reimbursement requirements (with the exception that services do not need to be provided in a licensed hospital), and obtaining approval from the Department of Children and Families.

Additionally, the Commissioner of Human Services is tasked with applying for necessary state plan amendments or waivers to implement the bill and secure federal funding. The bill mandates that a report summarizing the program's implementation and recommendations for its future be submitted to the Governor and Legislature within 36 months of the bill's effective date. The pilot program is set to expire 12 months after the report's submission.