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Assembly Passes Armato, Verrelli & Mazzeo Bill to Deter Substance Abuse Treatment Centers from Patient Brokering

Legislation Establishes Civil Penalties to Curb Incidents of ‘Rehab Recruiters’ Capitalizing on Referrals of Vulnerable Substance Abuse Patients

With the opioid crisis surging, legislators, insurers and health care providers have all been taking meaningful steps to better connect victims with treatment services. Current law, however, has left opportunity for fraud whereby profit-seeking individuals have exploited numerous vulnerable addicts and private insurers. Working to combat the problem, Assembly Democrats John Armato, Anthony Verrelli and Vincent Mazzeo have sponsored legislation recently approved by the full Assembly on Thursday, 76-0.

The bill (A-5425) establishes a civil penalty of up to $25,000 and would make substance abuse treatment centers, regulated by Department of Human Services, liable for the payment or furnishing of a fee, commission, or rebate to someone for the referral of patients to their treatment facility.

“Right now, there is open opportunity for people to quite literally get paid, by-the-bed, to fill substance abuse treatment centers across the country. These people posing as recruiters are using bribery, promising gifts, money, all-expense-paid travel, food and even drugs to potential patients,” said Armato (D-Atlantic). “It’s an unethical, sophisticated scam that cannot continue. Substance-abuse victims and their families are suffering the most. This legislation takes corrective action in helping prevent New Jersey residents from falling victim to the tactics of these bad actors.”

The penalties stipulated in the bill specifically serve to target payments that vary based on the number of patients referred; the duration, level, volume, or nature of substance abuse treatment services provided; or based on the amount paid by health carriers to treatment facilities for services.

“The fact that people are able to make a profit off those with substance abuse disorders is disturbing,” said Verrelli (D-Mercer, Hunterdon). “It has grave consequences for the well-being of our community and we cannot afford to have individuals discouraged from getting treatment. By creating an avenue for prosecution, this bill helps us encourage victims of patient brokering to come forward so we can start tackling the problem head-on.”

“The opioid crisis poses a big challenge. Every time we make progress, a new obstacle rears its head. It’s an unfortunate reality that we have to face bad players who act on self-interest and at the expense of vulnerable addicts who genuinely seek help,” said Mazzeo (D-Atlantic). “With this legislation we aim to close the gap of opportunity for this type of fraud. Stopping the cycle of harm is crucial in getting people the true assistance they need.”

The bill now goes to the Senate President for consideration.