When you, a loved one, a neighbor or colleague seek help, perhaps in a crisis, will you be able to access the mental health and/or substance use treatment and supports you need? Many can attest to how difficult a task that has been for some time.
Providers of these services are being reimbursed at levels that do not cover the actual costs of care. Program capacities are shrinking, and many providers are evaluating if they must close programs as their operating losses have grown.
New Jersey’s move of outpatient behavioral health programs — clinic and day services — to Medicaid managed care on Jan. 1, 2025 has served to exacerbate these fiscal and access problems, as denials of claims (during a transition period that was not supposed to have any) and improper reduced payments (also not meant to happen) are happening daily. During the limited transition period — initially Jan. 1 to March 30, then extended to June 30 — all requests for prior approvals were to be automatically approved and all claims were to be paid in full. But that has not been the case.
The prevalence of mental illnesses and substance use disorders in all populations is extremely high and increasing. This trend is even greater in young children, youth and older adults. As providers of critical, life-saving behavioral health services face historically inadequate rates of reimbursement, the increased costs of managed care, inflation, implemented and looming federal funding cuts and higher wage demands, New Jersey’s community-based programs are struggling to survive.
To ensure access to appropriate behavioral health services, reimbursement rates and contracts for mental health and substance use treatment and support services need to be increased to match the cost of care. Importantly, increases must allow for competitive wages to be paid so the necessary staff can be recruited and retained. An April 2025 survey showed that vacancy rates for 12 key staff positions, from psychiatrist to licensed counselors, social workers and residential workers, averaged 21%. This not only affects access to care as program capacity is limited by available staff but leaves those who are currently providing services to carry heavier caseloads, further contributing to staff burnout and retention problems.
Providers estimate a 33% increase in reimbursement rates would be needed to cover the full costs of behavioral health services but, recognizing the limits of the state’s revenues, have asked for just an 8% increase, or $43.2 million in state funds. Investment in services for both children and adults simply must be a priority of New Jersey’s fiscal year 2026 budget.
These vital services save lives and are a necessary investment for the individuals in need. They also serve the state’s bottom line in a positive way because they lead to reduced emergency room, hospital, homeless and criminal justice costs.
Legislators must keep New Jerseyans’ mental well-being front of mind as they finalize the budget.