Gopal, Cryan Legislation to Criminalize Drug Treatment Facility Fraud Passes Senate

Trenton– Today, the Senate approved legislation sponsored by Senator Vin Gopal and Senator Joe Cryan that would criminalize certain payments for patient referrals to substance use disorder treatment facilities.

Under the bill, S-1763, a person would be guilty of a crime of the fourth degree if they knowingly make or receive payments or otherwise furnish or receive any fee, commission, or rebate to any person in connection with the referral of patients to substance use treatment disorder facilities. The crime would be punishable by a prison sentence of up to 18 months or a fine of up to $10,000 or both.

“With the opioid crisis surging, lawmakers and healthcare providers, alike, have been taking steps to better connect those in need with the proper treatment services,” said Senator Gopal (D-Monmouth). “Prior to this bill, however, there have been ample chances for profit-seeking individuals to take advantage of the law and exploit vulnerable people seeking treatment alongside private insurers. This bill will put a stop to the exploitation and truly protect those in need.”

Under the bill, however, it would not be a crime to legitimately make or receive payments or otherwise furnish or receive any fee, commission, or rebate that does not vary based on: the number of patients referred to a facility; the duration, level, volume, or nature of the substance use disorder treatment services provided to a patient; or the amount of benefits provided by a carrier to a facility for treatment or services provided to a patient.

“This bill will help crack down on fraudulent and predatory practices that have, for too long, victimized individuals with substance issues and their families while they were seeking out the help they needed for recovery,” said Senator Cryan (D-Union). “We can’t allow for the exploitation of those who are in need of treatment for the disease of addiction at a time when they are most vulnerable. With the right help, they can recover and regain their lives.”

Florida enacted an anti-kickback law in 2017 that gave police the ability to crack down on drug treatment fraud, and since then similar laws have been introduced and enacted in Arizona, California, New York, Tennessee and Utah.

The bill would take effect immediately.

The bill was released from the Senate by a vote of 40-0.