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. This 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. Currently, NJ FamilyCare reimbursement requires that these services be delivered in a hospital setting, which limits access for many children in need. The pilot program seeks to provide a clinically appropriate alternative to outpatient and inpatient care, offering intensive treatment in a structured environment while allowing children to return home after services.

To participate in the pilot program, the division will select one eligible applicant that meets specific criteria, including having a plan for implementation and exclusively providing services to the target age group. The applicant must also comply with existing federal and state reimbursement requirements, with the exception that services can be delivered outside of a licensed hospital. The Commissioner of Human Services is tasked with applying for necessary state plan amendments or waivers to secure federal funding for the program. A report summarizing the program's implementation and recommendations for its future will be submitted to the Governor and Legislature within 36 months of selecting the pilot participant, after which the program will expire.