Vitale, Gordon Bill To Provide Monitoring & Oversight of Transition to Fee-for-Service System Signed Into Law

Senator Vitale

TRENTON – Legislation sponsored by Senators Joseph F. Vitale and Bob Gordon to provide for monitoring and oversight of the state’s transition to a fee-for-service payment model for mental health and substance use disorder treatment services, as well as for those individuals with developmental disabilities, was signed into law yesterday.

“The move to fee-for-service payment systems is a major overhaul for providers and it is imperative that we closely monitor the process to ensure patient care is not harmed in any way,” said Senator Vitale. “This will afford us a formal oversight system for the transitions on two fronts, providing updates to the Legislature on how the processes are progressing and whether providers are adequately meeting their clients’ needs.”

“Our goal with this legislation is to ensure that the implementation of the new payment system does not prevent residents from getting the care they need,” said Senator Gordon (D-Bergen, Passaic). “This is an effort to provide the oversight that is needed to ensure that patient access to care is maintained, and that continuity of treatment and quality of care are not harmed as a result of the transition.”

The law (S-2521) establishes a formal system of oversight for the planned transitions by community-based mental health and substance use disorder treatment service providers and community-based developmental disability service providers to a fee-for-service reimbursement model. The law establishes two independent oversight boards to monitor and oversee the transition; determine the adequacy of fee-for-service reimbursement rates; and provide recommendations to better facilitate the transition: the Independent Mental Health and Addiction Fee-for-Service Transition Oversight Board and the Independent Developmental Disability Fee-for-Service Transition Oversight Board.

It also requires a contracted evaluator to assess the impact of the transition and the particular rates adopted in the fee-for-service system on the financial sustainability of provider agencies, and on clients’ access to care, continuity of care, and quality of care.

The Division of Mental Health and Addiction Services (DMHAS) and the Division of Developmental Disabilities (DDD) in the Department of Human Services have historically used a cost reimbursement system to provide most State-level funding for community-based mental health, substance use disorder, and developmental disability treatment services in New Jersey. The DMHAS and DDD have begun to transition most of their contracted community-based service systems from a cost reimbursement system to a fee-for-service reimbursement system. The DMHAS plans to require all providers to complete the transition by July 2017, while the DDD is making is transition more gradually over several years.

The bill was approved in the Senate by a vote of 37-0, and the Assembly approved it 66-2-0. The law takes effect immediately and expires on the later of: (1) the 30th day after each board submits its final report or (2) the 30th day after the contractor submits its final report.

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