Committee advances Medicaid coverage for mental‑health "clubhouse" rehabilitation services
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Summary
A3770/S2606 were released with committee amendments to allow Medicaid reimbursement for mental health rehabilitation services provided through clubhouse programs; supporters said the model reduces rehospitalizations and reliance on acute services and will expand once Medicaid billing is allowed.
The Assembly committee voted May 7, 2025, to release A3770 with committee amendments and its Senate companion S2606, moving forward a measure that would allow Medicaid reimbursement of mental health rehabilitation services provided via accredited "clubhouse" programs.
Assemblywoman Peter Paul described touring Shore House and told members it "makes amazing strides to uplift and support those with mental health issues." Witnesses from Shore House and other clubhouses told the committee the clubhouse model is a nonclinical, community‑based psychosocial rehabilitation program run primarily by members and designed to build work and life skills. Jane Seltzer, a Shore House member, said, "I wouldn't have any other place to go with meaning or to feel safe," and described the clubhouse as "a lifeline."
Shore House representatives said the organization serves about 370 members with four staff; about 36% of members who seek employment return to paid work, and the program reported only four member rehospitalizations in the director's four years on staff. The director told the committee that Shore House derives 96% of its operating budget from private donations and grants and that Medicaid billing would create a sustainable funding base to expand the model across New Jersey.
The committee amendments expressly state that Medicaid coverage for clubhouse mental health rehabilitation services will not preclude Medicaid coverage of clinical services prescribed in conjunction with clubhouse participation, a point members sought clarified during questioning. Witnesses cited studies showing reduced Medicaid‑billable acute mental‑health services and lower rehospitalization rates among clubhouse participants in other states.
The committee moved and released A3770 with committee amendments (motion by Assemblywoman Peter Paul, second noted in transcript) and later released S2606 as identical to the amended Assembly version. Committee members asked for citations supporting cost savings and the director said she would provide studies and that Clubhouse International accredits clubhouses against a 37‑standard accreditation process.
The bill now goes to the full legislature for further consideration; advocates said Medicaid reimbursement would help existing clubhouses stabilize funding and encourage additional clubhouses statewide.
