A Petition to Equip the New Jersey Mental Health Workforce

 

A Crisis We Refuse to Pretend Away

 

New Jersey has a mental health crisis. We have said this from podiums, in press releases, on suicide-prevention hotlines, in school board meetings, and in the budget addresses of two consecutive governors. We have funded 988. We have built crisis stabilization centers. We have launched ARRIVE Together. We have rightly called this a moment of generational urgency and yet, the clinicians who actually deliver mental health care in this state,  the licensed professional counselors, licensed clinical social workers, licensed marriage and family therapists, psychologists, and the graduate-level interns coming up behind them are quietly going broke, burning out, and leaving the profession. Not because they do not care but because the math no longer works.

 

This petition is filed on behalf of those clinicians, the small private practices they own, and the New Jersey residents who will not get care unless this system is fixed. We are asking the State of New Jersey to do something impactfully simple: stop declaring a mental health crisis while underfunding the people who treat it! 

Who Files This Petition

 

This petition is brought by independently licensed mental health clinicians and the small private practices, group practices, and counseling collectives operating across the State of New Jersey. We are New Jersey’s in-network providers, small business owners, students, and counseling educators. We are the clinicians your constituents actually see. We are the practices that train the next generation of therapists. We are the small employers struggling to keep our doors open while bigger, venture-backed companies negotiate deals we are not allowed at the table for.

 

We sign this petition not to demand a windfall, but to demand a workable floor. We have spent years in graduate school, accumulated tens of thousands of supervised hours, paid for our own continuing education, supervision, and liability insurance, and built businesses that comply with every state and federal requirement. In return, we are paid less per session, in real dollars, than we were five years ago. We are losing colleagues every month.

 

To Paint the Picture:

 

As of December 2025, 40% of the U.S. population, roughly 137 million Americans, lives in a federally designated Mental Health Professional Shortage Area (HPSA). The Health Resources and Services Administration (HRSA) projects substantial shortfalls of mental health counselors, marriage and family therapists, psychologists, addiction counselors, and child and adolescent psychiatrists through 2038.These are not abstract projections. They are the reason your constituent calls eight therapists and cannot get a callback. They are the reason emergency departments have become the front door for outpatient mental health. They are the reason families wait six months for an intake.

And in New Jersey on March 2026, the mental health advocacy organization Inseparable released a report describing New Jersey’s workforce shortage as “catastrophic.” The report found that New Jersey has only 52.3% of the psychiatrists it needs to serve its 9.5 million residents, and that more than 1.3 million New Jerseyans currently live with a diagnosed mental health condition.

The shortage is not limited to psychiatry. New Jersey’s state psychiatric hospitals, community mental health agencies, mobile response teams, and outpatient providers all report severe staffing shortages. The New Jersey Department of Children and Families has publicly acknowledged that the state lost approximately 50 youth out-of-home treatment beds in two years, citing workforce shortages, payment rates that do not cover the cost of care, and the rising cost of operating a non-profit provider agency.

 

In 2023, 27.7% of New Jersey adults reported symptoms of anxiety or depression. The pandemic did not pass; demand has settled at a higher baseline and is still rising. Every behavioral health leader in this state will tell the same story behind closed doors: we cannot recruit fast enough, we cannot retain people once they are credentialed, and the pipeline of new clinicians is contracting because the financial path no longer makes sense.

 

“We may need to delay some openings of those five centers.” — Human Services Commissioner Stephen Cha, testifying to the Assembly Budget Committee, May 2026, on New Jersey’s flagship crisis stabilization centers.

 

Buildings without staff are not a system. They are a press release.

 

New Jersey is one of the most expensive states in the country in which to live and operate a small business. As of 2025, New Jersey’s cost-of-living index sits at 114.2 , the 11th most expensive state in the nation. The median home price has climbed past $565,000. New Jersey carries the highest property tax burden in the United States at an average effective rate of 2.23%. Electricity rates are among the twelve highest in the country. Most small business owners are taxed as pass-through entities at individual rates of up to 10.75%, on top of one of the nation’s highest corporate income tax rates.Against this cost structure, here is what an in-network clinician in New Jersey is actually paid:

 

• New Jersey Medicaid reimburses approximately 50% of what Medicare reimburses for the same behavioral health service.
•  The maximum NJ Medicaid reimbursement for a 60-minute psychotherapy session has hovered at roughly $90 since 2018,  a rate that has not been meaningfully increased in years even as inflation has compounded.
• A 2018 New Jersey Association of Mental Health and Addiction Agencies (NJAMHAA) survey of 27 fee-for-service mental health organizations found they were operating with a combined deficit of approximately $18 million in a single year.

Commercial reimbursement is better, but not consistently good. A licensed master’s-level clinician (LPC, LCSW, LMFT) accepting commercial insurance in New Jersey typically nets between $80 and $120 per session before taxes and overhead. Bureau of Labor Statistics data shows that the average licensed counselor, marriage and family therapist, or clinical social worker in New Jersey earns the equivalent of $35 to $45 per billed hour when insurance is the primary payer. Those rates do not move with economic demands, however, the cost of operating the practice does.

 

Below is a representative and conservative  accounting of what it costs a New Jersey LPC, LCSW, or LMFT in solo or small group private practice to remain operational and compliant every year. These are non-negotiable costs of practicing legally and ethically. They are paid out of the same reimbursement rates that have not moved in years.

Annual Operating Cost: 

- Professional liability insurance
$115 – $670+

 

Higher for corporate entities (LLC/PLLC/S-Corp): $320+ base; rises with caseload and specialty

 

General liability + Business Owner Policy (brick & mortar) $350 – $670/yr Required if leasing office space

Cyber liability / HIPAA breach coverage
$1,000 – $1,740/yr Effectively required for electronic records

License renewal (LPC biennial)
$250 (every 2 yrs)
$125 prorated; LAC $180; LMFT/LCSW similar

CEU requirement: 40 hours every 2 years
$400 – $1,500+

Includes mandated ethics, cultural competence, opioid hours
Clinical supervision (pre-licensure)
$75 – $150 per hour

100+ hours typically required; sometimes paid by the supervisee

EHR / practice management software
$600 – $1,800/yr

HIPAA-compliant EHR, telehealth, billing
Office lease (brick & mortar)
$12,000 – $36,000+/yr which Varies dramatically by county. NJ commercial rents are high

 

Self-employment tax (15.3%)
Paid on every dollar

Therapist pays both employee and employer FICA portions NJ state income tax (pass-through) Up to 10.75% Plus federal income tax

Professional association memberships
$200 – $600/yr (NASW-NJ, NJCA, NJAMFT, APA) 

Self-paid health insurance
$6,000 – $20,000+/yr No employer plan; full premium out-of-pocket

Marketing / Psychology Today / website
$500 – $3,000/yr
 

A solo private practitioner running a modest office in New Jersey can easily face $30,000 to $60,000 in fixed annual operating costs before they pay themselves a single dollar and that figure does not include retirement savings, paid time off, or the unpaid clinical labor of writing notes, returning calls, and managing insurance claims. After self-employment tax and state income tax, a clinician netting an average $90 per session must see roughly 18 to 22 insurance-paid clients every single week, every week of the year, simply to keep the lights on at a working-class income.

That is not a sustainable business model, that is a hamster wheel that inevitably leads to burnout. 

Treated Like 1099s While Bound Like W-2s

 

Insurance contracts treat private practice owners as independent  1099 contractors while imposing W-2-style obligations. Carriers dictate session rates without meaningful negotiation, demand documentation standards that consume hours of unpaid administrative time, conduct audits with retroactive clawbacks, are demanding 24/7 on call availability, denials for services already rendered, and reserve the right to terminate participation with little recourse. At the same time, clinicians receive none of the benefits W-2 employment would carry: no employer-paid health insurance, no retirement contributions, no paid sick or family leave, no unemployment protection, no severance, no employer-paid liability coverage, and no guaranteed minimum income. New Jersey law mandates that employers provide earned sick leave to their employees. A self-employed clinician who is too ill or grieving to work simply loses the income yet must still pay rent, insurance premiums, and licensing fees on schedule. The asymmetry is not theoretical, It is the daily lived experience of every small private practice owner in this state.

 

Insurance reimbursement is not a single rate, It is a tiered system that systematically advantages venture-backed corporate platforms over the independent clinicians and small businesses that have built New Jersey’s mental health infrastructure.

 

Over the past five years, venture capital backed mental health platforms including : Headway, Alma, Grow Therapy, Rula, SonderMind, Spring Health, Lyra, and others have aggregated tens of thousands of therapists nationwide. These companies bill insurance under a single National Provider Identifier on behalf of thousands of 1099-contracted clinicians. Because they negotiate as massive group practices rather than individuals, they secure reimbursement rates that are widely reported to be 20% to 35% higher than what independent solo practitioners can obtain on identical commercial contracts. This is not theoretical. Therapists openly describe joining these platforms not because they prefer them, but because the rates they can negotiate independently are too low to sustain a practice. Then the same insurance companies that refuse to raise rates for independent New Jersey clinicians are simultaneously equity investors in the platforms that pay higher rates. Cigna Ventures and Optum Ventures (UnitedHealth Group) have invested in Alma. Health Care Service Corporation (the country’s largest customer-owned Blue Cross Blue Shield licensee), Evernorth (Cigna), and BCBS of Massachusetts and Texas are major investors in Headway. Grow Therapy has investment from Optum Ventures. Rula has investment from Amazon Health Services.

 

In plain English: the insurance industry will pay more when it owns a piece of the entity collecting the payment. That arrangement may be legal but It is far from equitable. And it is reshaping the New Jersey mental health workforce by quietly squeezing out the small, locally-owned, community-rooted practices that have served this state for decades.

Insurance companies have already cut reimbursement rates through these platforms once and they can do it again. In fact, therapist are reporting that Alma has lowered rates (after already negotiating in good faith) for cpt code: 90837 (53 min individual session) for what would be paid for a session rendered for 37-52 minutes. The platforms control the client flow. If they decide to lower rates, increase fees, or change their business model, therapists have little recourse.

 

New Jersey insurers do not publicly disclose the methodology by which they arrive at behavioral health reimbursement rates. They do not disclose differential rates paid to platforms versus independent providers. They do not disclose the volume of in-network behavioral health claims paid versus denied. There is no public mechanism by which a small practice can compare its contracted rate to what the same carrier pays a venture-backed competitor for the identical CPT code, in the identical zip code, on the identical day. In any other regulated market, that opacity would be intolerable. In behavioral health, it is treated as routine.

Then Let’s Look at How this Impacts the Pipeline.

To become a Licensed Professional Counselor in New Jersey, a graduate student must complete a master’s degree of at least 60 graduate credits, accumulate 700 hours of supervised practicum and internship hours (per CACREP standards), and then accumulate up to 4,500 additional supervised post-graduate hours before sitting for full licensure. Licensed Clinical Social Worker, Marriage and Family Therapist, and Psychology licensure paths require comparable supervised experience. Insurance does not reimburse interns. Commercial carriers will reimburse work performed by a fully licensed supervisor, and as of January 2025, Horizon NJ Health amongst other carriers began considering claims for services rendered by provisionally licensed clinicians (LSW, LAC, AMFT) under direct supervision of a participating fully licensed clinician, a meaningful first step. But across the broader commercial insurance market, the rule remains: if the clinician seeing the client is not yet fully licensed , the small private practice that hosts and trains them generally cannot bill insurance for that work for EAP services or if they are an intern. 

This single fact has reshaped the entire training ecosystem. Small private practices in New Jersey simply cannot afford to host unpaid interns who generate no billable revenue while consuming weekly supervision hours, malpractice coverage extensions, office space, and administrative time. The economic burden falls almost entirely on community behavioral health agencies and a small number of large group practices that are subsidized by state and federal contracts.A graduate counseling student in New Jersey is therefore funneled toward community behavioral health agencies for their internship which is a vital part of training, but not the whole picture. Community behavioral health agencies have intense productivity requirements, high-acuity caseloads, mandatory in-office hours, and limited flexibility. A student trying to attend graduate classes part-time, complete a 20-to-30-hour-per-week unpaid internship, work a paying job to cover rent in one of the most expensive states in the country, and meet personal and family obligations is being asked to do something close to impossible.

Students from working class backgrounds, students of color, students with caregiving responsibilities, and students without family financial support are disproportionately the ones who drop out, delay licensure, or never enter the profession at all. The workforce we are building looks less and less like the population it serves.

 

Counseling graduate programs prepare students to be clinicians but they do not, by and large, prepare students to be small business owners. Graduates emerge knowing how to conduct a clinical assessment, write a treatment plan, and apply evidence-based interventions and not knowing how to negotiate an insurance contract, structure an LLC, manage a payroll, navigate a commercial lease, file quarterly estimated taxes, set up a HIPAA-compliant EHR, or build a referral network.

 

Private practice is one of the most important learning environments a counseling intern could possibly enter. It is where a student learns how a business stays solvent, how clinicians actually get paid, how documentation translates into reimbursement, how supervision works in the real world. Cutting interns off from private practice because insurance refuses to reimburse for supervised work is a workforce problem and an educational failure.

 

New Jersey has invested meaningfully in crisis response. The state has built 988. It has scaled mobile response teams. It has launched ARRIVE Together. It has cut the ribbon on the first crisis stabilization center in Newark and planned four more across Morris, Bergen, Monmouth, and Camden counties. These are good and necessary investments. They are also incomplete. Every one of those programs ultimately discharges the person in crisis back into outpatient care  which means back into the offices of LPCs, LCSWs, LMFTs, and psychologists. If those offices are closing, understaffed, or financially unsustainable, the crisis response system has nowhere to discharge to. The state will have built the front door and removed the rest of the building. We cannot keep saying we have a mental health crisis and then refuse to equip the people who are willing to do the work. A clinician needs more than passion. A clinician needs:

• a reimbursement rate that covers the actual cost of delivering ethical care in New Jersey;
• transparent, good-faith contract negotiations with carriers;
• equal access to the rate-setting process that venture-backed platforms enjoy;
• a financial pathway for graduate-level interns and provisionally licensed associates that does not require private practices to absorb the full cost of training;
• affordable continuing education, supervision, and liability insurance  or at minimum, reimbursement structures that recognize these as legitimate, non-negotiable costs of practice;
• protections that prevent retroactive clawbacks, surprise terminations, and one-sided contract changes by carriers.
 

WHAT WE ARE ASKING NEW JERSEY TO DO: 

 

We respectfully petition the Governor, the New Jersey Department of Banking and Insurance, the New Jersey Department of Human Services, and the New Jersey State Legislature to take the following actions:

 

1. Establish a Behavioral Health Reimbursement Commission:

 

Convene a permanent, statutorily authorized Commission on Behavioral Health Reimbursement, with seats reserved for independent licensed clinicians and small practice owners — not only large agency executives and carrier representatives. Charge the Commission with reviewing commercial and Medicaid reimbursement rates against the documented cost of delivering compliant outpatient mental health care in New Jersey, and with making binding recommendations on minimum rate floors at least once every two years. Senate Bill S2913 (2024) proposed such a Commission. It deserves to be reintroduced and passed.

 

2. Mandate Reimbursement Rate Transparency:

 

Require every commercial carrier doing business in New Jersey to publicly disclose, by CPT code and by region, the average reimbursement rate paid to in-network behavioral health providers. Require disclosure of the methodology by which rates are set. Require disclosure of differential rates paid through aggregator platforms versus to independent providers. Sunlight is the cheapest regulatory tool the state has. Use it! 

3. Require Behavioral Health Reimbursement Parity Benchmarks:

 

Require that commercial behavioral health reimbursement be benchmarked to a comparable medical-surgical service (such as an established-patient evaluation and management visit), and that any persistent gap be reported to the Department of Banking and Insurance and the Legislature. New Jersey is a federal mental health parity state in law but, like most states, not yet meaningfully in practice.

 

4. Tie Commercial Reimbursement Increases to a Cost Index: 

 

Statutorily require that commercial behavioral health reimbursement rates be reviewed annually against the Consumer Price Index for the New York–New Jersey Metropolitan Area. Rates that have not moved in five to seven years are not stable rates, they are real dollar cuts that have damaging consequences.

 

5. Establish a Statewide Reimbursement Pathway for Supervised Pre-Licensed Clinicians:

 

Expand the Horizon NJ Health 2025 supervised-practitioner reimbursement policy into a statewide minimum standard across all carriers regulated by New Jersey. Provisionally licensed clinicians and master level interns (LAC, LSW, AMFT, counseling by students) working under direct, contracted supervision should be billable across the commercial market in this state. This single change would re-open private practice as a training environment and dramatically expand internship and post-graduate supervised hours for thousands of New Jersey graduate students.

 

6. Fund a Mental Health Workforce Development Center:

 

New Jersey has joined the Counseling Compact, the Social Work Licensure Compact, and the Psychology Interjurisdictional Compact , which are meaningful workforce steps. However, the state has not yet established a dedicated mental health workforce development center, expanded scholarship and stipend incentives for graduate students, or systematically reported on provider supply and distribution. The Inseparable 2026 report named these as outstanding state failures. Fund them.

 

7. Prohibit Predatory Carrier Practices in Behavioral Health Contracts:

 

Limit retroactive clawbacks to a defined statutory window. Require minimum notice periods for material contract changes. Prohibit unilateral termination of in-network provider status without documented cause. Require carriers to negotiate rates in good faith with credentialed independent clinicians, and to provide a written justification when an offered rate falls below the regional median paid to comparably credentialed providers. Provide a real line of defense for clinicians and enforcement for carriers who do not abide by these requirements. 

8. Protect Small Practices in the Platform Era: 

 

Require carriers that contract with venture-backed aggregator platforms to offer comparable reimbursement to credentialed independent New Jersey clinicians billing the same CPT codes in the same region. A rate is not a market rate if it is only available to entities with venture capital and insurance equity at their back.

 

Let’s Humanize the Numbers:

 

Numbers tell part of the story. People tell the rest. The following accounts are drawn from the daily experience of New Jersey clinicians and small practice owners. Every one of them a real situation playing out in this state right now.

 

Maria is a Licensed Professional Counselor in Essex County. She left a hospital system three years ago to open a small private practice serving Spanish-speaking families because no one else in her community was doing that work in network. She bills insurance because most of her clients cannot pay $175 cash. Her commercial reimbursement rate has not changed since she opened. Her office rent has gone up 14%, her liability insurance has gone up, her EHR cost has gone up, her health insurance premium nearly doubled. Last month, she told her supervisor she is considering closing the practice and going back to the hospital. She does not want to. She cannot make the numbers work.

 

Devon is a second-year graduate student in a CACREP-accredited counseling program at a New Jersey university. He needs 700 internship hours to graduate and 4,500 supervised hours after graduation to become an LPC. He works thirty hours a week at a coffee shop to pay rent in Hudson County. The only internship he could secure is at a community behavioral health agency with mandatory in-office hours from 9 a.m. to 5 p.m., Monday through Friday. He is failing one class, sleeping four hours a night, and considering dropping out. The private practice across the street from his apartment would have taken him on as an intern. They cannot afford to.

 

Aisha owns a five-clinician group practice in Bergen County. Three of her clinicians left this year one to a venture-backed platform that offered her higher reimbursement on the same insurance contracts Aisha holds, one to a hospital system with W-2 benefits, one out of the profession entirely. Aisha cannot match those offers because her practice pays for liability insurance, supervision, CEU stipends, paid time off, and a small contribution toward health insurance for her staff. She is doing exactly what the state says it wants small employers to do. She is losing every recruiting battle.

James is a Licensed Clinical Social Worker in private practice in Burlington County. In March, a carrier sent him a retroactive clawback notice for $4,200, citing a documentation issue across six months of sessions he had already been paid for and already paid taxes on. He had thirty days to repay or have the amount withheld from future claims. There is no equivalent process by which he could reclaim money the carrier underpaid him over the same period. He has a four-year-old daughter. He paid the clawback out of his daughter’s 529 plan.

These are not edge cases these are last Tuesday.

 

Every elected official in this state has spoken about the mental health crisis. The question this petition asks is whether New Jersey is prepared to do the unglamorous work of fixing the system the crisis runs through.

 

Crisis stabilization centers are necessary.  And also they are not sufficient. 988 is necessary. It is not sufficient. ARRIVE Together is necessary. It is not sufficient. None of these programs work without an outpatient behavioral health workforce on the other side, and that workforce is being financially strangled in real time. New Jersey has all the elements of a national-model mental health system: top-ranked graduate programs, a dense provider network, robust crisis infrastructure, and a population that increasingly recognizes mental health as health. What it lacks is a reimbursement environment that allows the small clinicians, small practices, and aspiring trainees inside that system to survive.

 

We are not asking for special treatment. We are asking for transparency, for parity, for good-faith negotiation, for a training pipeline that does not depend on family money to walk through, and for the basic recognition that the people doing the work deserve to be able to afford to live in the state where they do it. If New Jersey will not act, the private practices that hold this system together will continue to close, the graduate students who would have replaced them will continue to leave the profession, and the venture-backed corporate platforms owned in part by the very insurance carriers refusing to raise independent provider rates will continue to consolidate the mental health care of this state under a handful of out-of-state corporations whose primary obligation is to their investors, not to New Jersey families.

 

That is not the system this state should want. The Legislature has the authority to prevent it. The Department of Banking and Insurance has the regulatory power to enforce a better one. The Governor has the platform to lead it.

We respectfully urge you to do so.

 

Respectfully submitted on behalf of the licensed mental health workforce of New Jersey, the small practices and group practices that employ them,

and the graduate students and pre-licensed clinicians coming up behind them.

 

Signed,