This bill authorizes licensed residential substance use disorder treatment facilities or programs to provide residential mental health treatment services, provided they maintain a formal hospital affiliation and receive clinical and medical support from that hospital. The bill defines a formal hospital affiliation as a written contractual agreement with a general acute care hospital that offers inpatient psychiatric services or a State or county psychiatric hospital. It also outlines the necessary clinical and medical support, which includes ongoing oversight by hospital psychiatric and medical personnel in various aspects of treatment and quality assurance.

To ensure effective collaboration, the bill mandates that the formal hospital affiliation agreement establish joint clinical governance, shared clinical policies, 24-hour on-call coverage, timely transfer provisions to inpatient care, and participation in quality assessment activities. Facilities or programs must file a copy of this agreement with the Department of Health, along with any terminations or amendments. Upon termination of the agreement, the facility or program must stop admitting new patients to the residential mental health treatment service program component, although they may complete treatment for existing patients. The bill aims to address the needs of individuals with co-occurring mental health and substance use disorders by providing a structured treatment option that falls between inpatient hospitalization and outpatient care.