Nevada has achieved a significant reduction in the number of children with behavioral health needs placed in institutional settings. Recent data shows the percentage of youth in psychiatric residential treatment facilities dropped from 35 percent in January 2025 to 16 percent as of August 2026.
This shift follows a five-year settlement agreement with the Department of Justice, which previously found that the state unnecessarily segregated children in institutions, often moving them out of state. The state has invested over $100 million in children’s behavioral healthcare, prioritizing community-based support such as in-home therapy and specialized foster care.
State Medicaid administrator Ann Jensen stated that the move toward community-based care is a necessary step for ensuring better outcomes. The system is transitioning from a reliance on long-term residential facilities to a model that emphasizes shorter, temporary therapeutic home stays. These homes allow children to remain connected to their routines, families, and local communities while receiving the clinical care they need.
While the reduction in institutionalization is a positive development, officials emphasize that this is part of an ongoing process. The focus remains on providing services that align with the Americans with Disabilities Act, ensuring children receive support in the least restrictive environment possible.
As Nevada continues to align its services with federal requirements, the goal is to stabilize the system through better infrastructure and staffing. By offering these intermediate community-based options, the state aims to avoid the trauma associated with long-term isolation in psychiatric facilities while still providing the necessary safety structures for children in crisis.