New Jersey Adds CCBHC Services and Payment Methodologies
Summary
CMS approved New Jersey's Medicaid State Plan Amendment (SPA 25-0017) to add Certified Community Behavioral Health Clinic (CCBHC) services and establish payment methodologies for these services. The amendment was approved on March 27, 2026, with an effective date of October 1, 2025. CCBHCs provide integrated behavioral health services to individuals with mental health and substance use disorders.
What changed
CMS approved New Jersey's Medicaid State Plan Amendment (SPA 25-0017), which adds Certified Community Behavioral Health Clinic (CCBHC) services to the state's Medicaid program and establishes payment methodologies for these services. The amendment was reviewed under Section 1905(a)(13) of the Social Security Act and 42 C.F.R. §440.130(d), and was approved with an effective date of October 1, 2025. This amendment affects how New Jersey reimburses for integrated behavioral health services provided by certified clinics.
Healthcare providers operating as or seeking to become CCBHCs in New Jersey should review the approved payment methodologies and ensure compliance with certification requirements. Providers should contact the New Jersey Medicaid agency to confirm enrollment procedures and billing requirements for CCBHC services. The approved SPA pages will be incorporated into the New Jersey State Plan and are available through Medicaid.gov.
What to do next
- Review approved CCBHC payment methodologies in the New Jersey State Plan
- Confirm certification status if operating as or seeking to become a CCBHC in New Jersey
- Update billing systems to reflect new CCBHC service codes and payment rates effective October 1, 2025
Source document (simplified)
Table of Contents
State/Territory Name: 1HZ -HUVH\ State Plan Amendment (SPA) #: 2 This file contains the following documents in the order listed: Approval Letter )RUP &06 Approved SPA Pages
DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services 601 E. 12th St., Room 355 Kansas City, Missouri 64106
Medicaid and CHIP Operations Group
March 27, 2026 Gregory Woods Assistant Commissioner P.O. Box 712, Mail Code #26 Trenton, NJ 08625-0712 Re: New Jersey State Plan Amendment (SPA) – 25-0017 Dear Assistant Commissioner Woods: The Centers for Medicare & Medicaid Services (CMS) reviewed your Medicaid State Plan Amendment (SPA) submitted under transmittal number (TN) 25-0017. The state proposes to amend the State Plan to add services provided by Certified Community Behavioral Health Clinics (CCBHCs) and describe payment methodologies for these services. CCBHCs provide integrated and comprehensive behavioral health services to individuals with mental health and substance use disorders. We conducted our review of your submittal according to statutory requirements at Section 1905(a)(13) of the Social Security Act and implementing regulations at 42 C.F.R. §440.130(d). This letter informs you that New Jersey’s Medicaid SPA TN 25-0017 was approved on March 27, 2026, with an effective date of October 1, 2025. Enclosed are copies of Form CMS-179 and approved SPA pages to be incorporated into the New Jersey State Plan. If you have any questions, please contact Terri Fraser at (410) 786-5573 or via email at Terri.Fraser@cms.hhs.gov. Sincerely, Nicole McKnight On Behalf of Courtney Miller, MCOG Director Enclosures
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Addendum to Attachment 3.1-A Page 13(d).21
STATE OF NEW JERSEY Limitations on Amount, Duration and Scope of Services Provided to the Categorically Needy 13(d) Rehabilitative Services - Certified Community Behavioral Health Center Services Certified Community Behavioral Health Center (CCBHC) Services A Certified Community Behavioral Health Center (CCBHC) is an entity that provides a comprehensive set of outpatient, community-based mental health and substance use disorder services. CCBHCs are designed to improve access to high-quality, coordinated, and comprehensive community-based behavioral health care. Entities that seek to operate as a CCBHC and provide CCBHC services must obtain certification from the New Jersey Department of Human Services (DHS). CCBHC services are provided by a spectrum of providers employed by or affiliated with the CCBHC. CCBHC rendering providers must meet all applicable licensure and certification requirements set forth in New Jersey law and regulation, the scope of practice definitions of local and national licensure boards, and State agency policy regarding qualifications. Individuals actively working towards licensure are also eligible to provide services under supervision in accordance with their professional licensure standards. CCBHCs may contract with a Designated Collaborative Organization (DCO) to provide specific CCBHC services identified by the State. The CCBHC is ultimately responsible for ensuring that contracted services are delivered with the same level of quality required by certification and applicable State law and regulation. The CCBHC maintains clinical responsibility for the services delivered by contracted DCOs, and DCO providers must comply with the same licensure and certification requirements set forth in New Jersey law and regulation, the scope of practice definitions of local and national licensure boards, and State agency policy regarding qualifications. To the extent that services are required that cannot be provided by either the CCBHC directly or by a DCO, referrals may be made to other qualified providers or entities. CCBHC Service Array
- Crisis Services
- Person and/or Family-Centered Treatment Planning
Screening, Assessment, Diagnosis, and Risk Assessment
Addendum to Attachment 3.1-A Page 13(d).22Outpatient Mental Health and Substance Use Services
Comprehensive Care Management
Outpatient Primary Care Screening and Monitoring
Peer, Family Support, and Counselor Services
Psychiatric Rehabilitation Services
Service Definitions and Provider Requirements The following tables provide a description of each rehabilitation-specific CCBHC service, eligible providers who may be involved in delivering the service to the extent their scope of practice allows, and provider requirements.
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Addendum to Attachment 3.1-B Page 13(d)(2)
Limitations on Amount, Duration and Scope of Services Provided to Medically Needy Groups PREGNANT WOMEN, DEPENDENT CHILDREN, AND THE AGED, BLIND, OR DISABLED 13(d) Rehabilitative Services - Certified Community Behavioral Health Center Services Certified Community Behavioral Health Center Services for Medically Needy Groups are identical to Community Behavioral Health Center Services for the Categorically Needy, as set forth in Addendum to Attachment 3.1-A Pages 13(d).21 through 13(d).36.
STATE OF NEW JERSEY METHODS AND STANDARDS FOR ESTABLISHING PAYMENT RATES-OTHER TYPES OF CARE Reimbursement for Rehabilitative Services - Certified Community Behavioral Health Center Services Overview Effective October 1, 2025, the purpose of this SPA is to implement a coordinated payment (monthly bundled payment) to reimburse providers certified by the State as Certified Community Behavioral Health Clinics (CCBHCs) for the comprehensive CCBHC service array described in Attachment 3.1-A. The State’s objective is to support integrated community behavioral health services, improve access and continuity of care, and sustain clinic capacity by providing a clinic- specific, comprehensive monthly payment rate that covers the full set of CCBHC services described in the State Plan. The CCBHC reimbursement methodology under this State Plan comprises three components:
Monthly Bundled Payment: A clinic-specific monthly bundled payment established
separately for the standard population and each State-defined special population: Serious Mental Illness (SMI), Serious Emotional Disturbance (SED), Substance Use Disorder (SUD), and Post-Traumatic Stress Disorder (PTSD). Monthly bundled payment rates for each population are calculated using costs and visits associated exclusively with that population; costs and visits are not duplicated across population rates. Only one monthly bundled payment is made per beneficiary per month, in any month in which at least one qualifying CCBHC service is provided.Cost Outlier Payments: Supplemental payments made to CCBHCs when the estimated
cost of services provided to a beneficiary in a given month exceeds the applicable population-specific, State-designated cost outlier threshold. Cost outlier payments are made in addition to the monthly bundled payment and are paid on an annual basis. The cost outlier methodology is described in the Outlier Payment Methodology section of this Attachment.Quality Incentive Payments (QIP): Supplemental, performance-based payments made to
eligible CCBHCs that achieve State-designated performance improvement thresholds for State-mandated quality measures. QIP payments are made in addition to the monthly bundled payment and are not included in the calculation of monthly bundled payment rates. The QIP methodology is described in the Quality Incentive Payments section of this Attachment.
Together, these three components constitute the total CCBHC reimbursement structure under this State Plan. The monthly bundled payment includes component services authorized under the following State Plan authorities:
CCBHC Rehabilitative Services as described under the Rehabilitative Services benefit
(§13.d.) in Attachment 3.1-A.Other State Plan Covered Services, including:
x Outpatient Primary Care Screening and Monitoring
- Attachment 3.1-A §3 (Laboratory Services);
- Attachment 3.1-A §4.b (EPSDT screening and assessment);
- Attachment 3.1-A §5.a (Physician Services); and
Attachment 3.1-A §6.d (Other Practitioner Services).
x Medication Assisted Treatment (MAT) as part of Outpatient Mental Health and Substance Use ServicesSupplement 1 to Attachment 3.1-B Section 1905(a)(29) MAT
All component services listed above that constitute the CCBHC service array are included in the monthly bundled payment. Rate Type The State uses a fixed monthly bundled payment methodology that reflects the expected cost of all qualifying CCBHC services provided by a State-certified CCBHC to a Medicaid beneficiary in a given month. The State reimburses CCBHC providers using a clinic-specific monthly bundled payment and is limited to one payment per month, per CCBHC, per beneficiary with a qualifying CCBHC visit (any month in which at least one qualifying CCBHC service is provided to a beneficiary). Separate monthly bundled payment rates are established for the standard population and State-defined special populations as described in the Initial Payment Rate section of this Attachment. Monthly bundled payment rates apply uniformly to governmental and private CCBHC providers unless otherwise specified. Rate Methodology and Cost Report Elements The payment rates for CCBHC services are based on the reporting period total annual allowable CCBHC costs divided by the total annual number of CCBHC visits as reported to the State using the CMS CCBHC Cost Report Template. Allowable costs include the salaries and benefits of CCBHC providers, the cost of services provided under agreement, and other direct costs such as insurance or supplies needed to provide CCBHC services. Indirect costs include site and administrative costs associated with providing CCBHC services.
For the purpose of calculating rates, CCBHC costs and visits include both Medicaid and non- Medicaid service costs and visits. Allowable costs are identified using CCBHC services covered under Attachment 3.1A/B, Item 13.d (pages 21 and 22) and requirements in 2 CFR §200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. CCBHCs must provide data on costs and visits to the State annually using the CMS CCBHC Cost Report Template. The State confirms that costs and visits used in the calculation of the CCBHC monthly bundled payment rate are drawn solely from submitted cost reports and are limited to those associated with the provision of CCBHC services comprising the monthly bundled payment, in alignment with the Federal Cost Principles at 2 CFR Part 200. Cost Reporting Cadence CCBHCs must provide data on costs and visits to the State annually using the State-defined standardized cost reporting template – the CMS CCBHC Cost Report. Annual CCBHC cost reports based on audited financials are due to the State within 180 days of the next state fiscal year. Upon receipt from the CCBHC, the cost reports are reviewed independently by the State or a qualified external vendor. Initial Payment Rate The State establishes separate monthly bundled payment rates for the standard population and four State-defined special populations: Serious Mental Illness (SMI), Serious Emotional Disturbance (SED), Substance Use Disorder (SUD), and Post-Traumatic Stress Disorder (PTSD). Special populations are determined by diagnosis code(s) based on definitions established by the State and reflected in the cost report. Each monthly bundled payment rate is calculated using costs and visits associated exclusively with that population; costs and visits are not duplicated across population rates. When a beneficiary has diagnoses spanning more than one special population category, the CCBHC uses clinical judgment to determine which population category applies for billing purposes, as reflected in the person and family-centered treatment plan. Only one monthly bundled payment is made to the CCBHC per beneficiary per month. Initial rates for each population category are established as follows: x Existing Demonstration CCBHCs Effective October 1, 2025, the State will use the current SFY26 Demonstration monthly PPS rates for current CCBHCs to set first year monthly bundled payment rates for state plan CCBHC services. The SFY26 Demonstration rates do not include costs or visits for services outside the scope of state plan CCBHC services. x New CCBHCs For CCBHCs certified on or after October 1, 2025, the State will set initial rates using either a proxy rate or audited historical cost report data. The methodology used is determined by the availability of audited historical cost report data covering a full year of
CCBHC operations under the state plan or under demonstration authority with a scope of services consistent with state plan CCBHC services.
Option 1 (cost report-based rate):
The State will establish provider-specific monthly bundled payment rates using audited historical cost report data from the most recently ended complete fiscal year when such data covers a complete state fiscal year during which the CCBHC provided the full scope of CCBHC services as required under this State Plan. The monthly bundled payment rate is calculated by dividing the total annual allowable costs of CCBHC services for all services covered under the CCBHC scope as listed above by the total annual number of CCBHC Medicaid and non-Medicaid visits and adjusted from the reporting period to the rate period using the Medicare Economic Index (MEI). When a newly certified CCBHC's historical cost report does not include costs and visits covering the full CCBHC service scope required under this State Plan—for example, because certain required CCBHC services were not yet being provided by the organization prior to State certification—the State will use Option 2 (the proxy rate) to establish the initial monthly bundled payment rate.Option 2 (proxy rate):
The State will use the average monthly bundled payment rate of current State- certified CCBHCs to set first year monthly bundled payment rates when audited historical cost report data from a complete fiscal year is not available. This includes both standard and any special population monthly bundled payment rates. Rate Update Methodology Upon acceptance of the CCBHC cost reports, the State sets the monthly bundled payment rates effective for the applicable rate year. The initial rate period begins October 1, 2025, and ends June 30, 2026. Subsequent rate years begin July 1 and end June 30, consistent with the State fiscal year, and each cost report will include one full year of cost and visit data, with a reporting period of the state fiscal year. CCBHC monthly bundled payment rates are updated annually. Rebasing occurs after a full initial rate period for new CCBHCs, following a rate adjustment for a change in scope once a full fiscal year of actual cost and visit data reflecting the change is available and the cost report is accepted, and at least every three years following the last rebasing. In all other years, rates are updated by trending using the MEI. Each method is applied as follows: Rebasing: Monthly bundled payment rates are rebased using actual annual cost and visit data from the most recent accepted cost report. Rebased rates are calculated separately for the standard population and each special population by dividing the total annual allowable costs of CCBHC services associated with each respective population by the total annual CCBHC visits for that population as reported in the accepted cost report. Costs and visits used to calculate each population-specific rebased rate are exclusive to that population and
are not included in the calculation of any other population rate. The resulting population- specific rate is then adjusted forward from the reporting period to the upcoming rate period using the Medicare Economic Index (MEI). Rebased rates take effect at the start of the state fiscal year immediately following the State's acceptance of the cost report used for rebasing. x Trending: Monthly bundled payment rates are trended using the Medicare Economic Index (MEI) when rebasing does not occur. Trended rates are calculated by applying the MEI percentage change from the prior rate period to the current rate period and take effect at the start of the state fiscal year. Initial Rate Rebasing for New CCBHCs For CCBHCs certified on or after October 1, 2025, initial payment rates are rebased once the CCBHC submits the first cost report including a full year of actual cost and visit data for CCBHC services under the state plan. Upon review and acceptance of the cost report by the State, rebased rates take effect at the start of the following state fiscal year. For subsequent rate years, rates are adjusted following the process described in this section. Prevention of Duplicate Payment and Reconciliation Beneficiaries eligible for CCBHC services are eligible for all needed Medicaid covered services; however, duplicate payment is prohibited. The State assures that CCBHC services and payments will not duplicate other state plan or waiver services. The State will avoid duplication through claims processing edits, person-centered planning processes, and annual reconciliation to identify and recover any duplicate payments. Change in Scope CCBHC providers may request a rate adjustment for changes in scope expected to change individual CCBHC provider payment rates by 4.0 percent or more. A change in scope includes a change in the type, intensity, duration, or amount of CCBHC services required under the State Plan, or another State-approved change that materially affects the cost of furnishing covered CCBHC services. The provider must submit information to the State regarding the change in scope, including the affected services, the expected cost of providing the new or modified services, any projected change in the number of visits resulting from the change, and the date on which the provider began, or will begin, furnishing the affected services. Projections are subject to review by the State. Changes in scope that do not meet the 4.0 percent threshold will not receive an interim change-in- scope rate adjustment and will instead be reflected in the provider's rate at the next applicable rebasing based on accepted cost report data. A provider may submit a request for a change-in- scope rate adjustment no more than once per state fiscal year. A provider may furnish the affected services before the rate adjustment is reflected in the monthly bundled payment rate. Costs and visits associated with approved changes in scope are incorporated
into the payment rate when the CCBHC submits, and the State accepts, the first cost report containing a full state fiscal year of actual cost and visit data reflecting the approved change. Provider-specific rate adjustments for approved changes in scope take effect at the start of the state fiscal year following State approval of the rate adjustment. Rates adjusted for a change in scope are rebased once the CCBHC submits the first accepted cost report with a full year of actual cost and visit data, including the approved change in scope. Rebased rates take effect at the start of the state fiscal year immediately following the State's acceptance of the cost report. Outlier Payment Methodology The State establishes cost outlier thresholds for each of the five populations to determine when CCBHCs exceed service costs and become eligible for outlier payments. Cost outlier thresholds are population-specific, fixed dollar amounts that apply uniformly to all CCBHCs. The State identifies cost outliers by multiplying each CCBHC's cost-to-charge ratio by the total covered charges of the combined monthly claims for each beneficiary to estimate beneficiary- specific monthly costs. CCBHC-specific cost-to-charge ratios are calculated using cost report submissions and are updated annually during each annual rate setting cycle. For each population, the State determines the fixed dollar outlier threshold amount using historical beneficiary-specific monthly estimated cost data for that population derived from accepted cost reports and claims data. The State calculates beneficiary-specific monthly estimated costs for each population and sets the population-specific fixed dollar cost outlier threshold amount at the 99 th percentile of that population’s monthly estimated cost distribution above which a beneficiary month is treated as a cost outlier. The same population-specific threshold applies uniformly to all CCBHCs serving that population. The State makes a cost outlier payment to the CCBHC when the estimated cost exceeds the State- designated cost outlier threshold amount. The outlier payment calculation methodology is as follows: Outlier Payment Amount = (Estimated Monthly Cost - Applicable Population-Specific Threshold) x 75%. The amount of the cost outlier payment equals 75 percent of the estimated monthly cost in excess of the applicable population-specific threshold. The 75% marginal cost percentage applies to all CCBHCs and all populations, consistent with the standard outlier payment hospital reimbursement percentage used by the State. The State makes cost outlier payments to the CCBHC in addition to the standard monthly bundled payment amount. Outlier payments are made on an annual basis and are paid within 13-15 months after the end of each state fiscal year. The 13–15-month lag in payment allows for timely submission of claims per 42 CFR 447.45. Cost outlier thresholds are updated annually. In years when monthly bundled payment rates are trended, the State updates each population-specific outlier threshold by applying the MEI from the prior rate period to the current rate period. In years when monthly bundled payment rates are rebased, the State recalculates each population-specific outlier threshold using updated
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For each quality measure, a QIP-eligible CCBHC that meets or exceeds the applicable benchmark receives an initial award amount equal to the amount allocated to that measure from the QIP funding pool multiplied by the CCBHC's proportional visit share. The maximum payment a CCBHC can receive for a given performance year is the sum of the CCBHC's award amounts for all measures on which the CCBHC met the benchmark. If a QIP-eligible CCBHC does not attain performance on one or more quality measures, the dollars associated with that CCBHC's proportional visit share for the affected measure or measures are redistributed to QIP-eligible CCBHCs meeting the benchmark for the same measure in proportion to each such CCBHC's proportional visit share. If no CCBHCs meet the benchmark for a given quality measure, the funds originally allocated to that measure go back into the total QIP pool and are redistributed to other quality measures in proportion to their weights noted above. QIP payments are made directly to CCBHCs as separate payments from the monthly bundled payment, based on achievement of quality measure thresholds as described above. QIP payments are not included in the calculation of the monthly bundled payment rates and are paid in addition to the monthly bundled payment. The QIP methodology, including selected quality performance measures, measure stewards, benchmarks, distribution methodology, and technical specifications, is determined by the State and evaluated annually to ensure alignment with program priorities. The State will post updated technical specifications and benchmarks for each performance period no later than 90 days prior to the start of the applicable calendar year performance period. The quality performance measures, technical specifications, and benchmarks are effective October 1, 2025 and are maintained on the State's website at https://www.nj.gov/humanservices/dmhas/resources/providers/ccbhc/.
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