Legislation Will Require Reimbursement for Provision of Behavioral Health Services to Students Covered by Medicaid 

ATLANTIC CITY – As part of his efforts to address youth mental health needs both at the state and national levels, Governor Phil Murphy today signed a bill (A-3334) expanding expenses that New Jersey’s K-12 public schools may be reimbursed for in regards to behavioral health services that are provided to students and their families who are Medicaid recipients.  

“It’s undeniable that many young people are facing mental health challenges right now and would benefit from the support of compassionate, trained professionals,” said Governor Murphy. “Through the work of my Administration, in collaboration with local, state, and national partners, we are taking decisive action to address the mental health needs of our youth. By ensuring schools will be reimbursed for the provision of behavioral health care services to students covered by Medicaid, this legislation will advance our ongoing efforts to expand affordability and access to the mental health support New Jersey children need.”

The Division of Medical Assistance and Health Services (DMAHS) within the New Jersey Department of Human Services (DHS) and its contracted managed care organizations will be responsible for reimbursing local education agencies for the provision of behavioral health services covered under Medicaid to students who are eligible Medicaid beneficiaries. This builds upon the impact of programs like the Special Education Medicaid Initiative (SEMI), in which public school districts are reimbursed a portion of the costs associated with providing health-related services to Medicaid-eligible students in their special education programs.

The covered services offered either in-person or via telehealth must be provided by either a licensed medical practitioner or local education agency approved as a Medicaid provider. Schools are allowed to submit a request for reimbursement through Medicaid if they are unable to be reimbursed through a legally liable third party.

With this authority, DHS will begin seeking federal approvals for this program. Once the program is approved over the course of the next few years, DMAHS, along with the New Jersey Departments of Education and Treasury, will assist schools in implementing a plan to submit Medicaid claims for reimbursement for these services.

“Ensuring access to youth mental health remains a top priority for the Administration,” said Human Services Commissioner Sarah Adelman. “Under Governor Murphy's leadership, the Department has expanded access to behavioral health services and made significant investments in the provider workforce pipeline. We look forward to leveraging federal flexibilities and Medicaid funding to further help school districts connect students to health services.”

“Promoting access to mental health and well-being is essential for student success,” said Dr. Angelica Allen-McMillan, Acting Commissioner of Education. “Mandating Medicaid reimbursement for covered behavioral health services offered by local educational agencies strengthens the foundation of mental health support within New Jersey’s educational system. This progressive approach acknowledges the crucial role mental health plays in students’ overall development by empowering eligible Medicaid beneficiaries to access the services they need and thus fostering a positive educational experience.”

“In the midst of a youth mental health crisis, ease of access to emotional, behavioral, and mental health supports and services are critical to youth wellbeing and parent peace of mind,” said Department of Children and Families Commissioner Christine Norbut Beyer. “The ability to expand these services into schools through Medicaid reimbursement reduces barriers to students accessing support delivered by their district. Services provided through DCF's Children’s System of Care have long been on the Medicaid platform, and expansion of that coverage to district-driven mental health services helps to enhance the existing continuum for students and their families.”

The sponsors of the legislation include Senator Vin Gopal and Assembly Majority Leader Louis D. Greenwald, as well as Senate Majority Leader Teresa Ruiz and Assembly Members Angelica Jimenez and Reginald Atkins.

“Any New Jersey student who is in need of behavioral health services or treatment should have access to them,” said Senator Gopal, Chair of the Senate Education Committee. “This legislation will enable schools to build out and deliver school-based Medicaid services, and allow districts to obtain additional funds through which they can better serve students and their families who are facing behavioral health challenges.”

“By leveraging federal dollars to expand Medicaid reimbursement for school-based behavioral health services, we can connect more students with critical supports at no cost to their families or schools. We know that early access to services can change the trajectory of a young person’s life,” said Assembly Majority Leader Greenwald. “At a time when young people continue to face behavioral health challenges that have been exacerbated by the COVID-19 pandemic, these additional funds will be a game-changer in allowing school districts to hire additional mental health professionals and expand their behavioral health services.”

“The pandemic and the isolation it brought exacerbated issues of mental health amongst our students,” said Senate Majority Leader Ruiz. “This will help to expand the availability of mental health services within our schools by extending coverage to all Medicaid recipients at no cost to the district or the parents. It is critical as we rebound from the pandemic that we continue to look for ways to better support our students socially, emotionally and academically.”