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Paul Zimmerman
pzimmerman@mrllp.com
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Under the Microscope: Substance Abuse Patient Referrals 

Governor Brown just signed Senate Bill 1228 into law, implementing Health & Safety Code §§11831.6 and 11831.7. The move directly impacts marketing practices within the world of substance abuse treatment.

Pursuant to SB 1228, payments for patient referrals to or from substance abuse treatment facilities licensed or certified by the Department of Health Care Services (DHCS) are now forbidden. In terms of its intent, the bill’s expressed purpose is to prevent patient brokering, “where unscrupulous services refer people with substance use disorders to programs that are inappropriate for their needs in order to gain access to insurance payments.” That being said, the new law broadly prohibits paying or receiving anything of value for the referral of a person seeking alcoholism or drug abuse recovery and treatment services.  

Though many individual SUD providers may already be subject to California’s Anti-Kickback statute, Health & Safety Code §§11831.6 and 11831.7 are clearly aimed at preventing patient brokering that involves licensed substance abuse treatment facilities themselves. Toward that end, the law targets facilities, facility owners or directors (regardless of whether they hold professional licenses), facility employees, and other professionals and non-professionals who “work for” a facility. Likewise, it allows the DHCS to reach out to licensing boards and make recommendations affecting the professional licenses of individuals who provide counseling services at substance abuse treatment facilities.

Mark your calendars – §§11831.6 and 11831.7 become effective January 1, 2019.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.