Proposed legislation that would tighten regulation of California’s addiction recovery industry is a few steps closer to becoming law.

Senate Bill 1228, introduced by California Senator Ricardo Lara, unanimously passed the Senate Healthcare Committee last month .This bill proposes to establish the Substance Use Disorder Patient Protection Act.

This bill makes findings and declarations about the opioid epidemic and its toll on overdoses in the state, the growing need for treatment services and the surge in patient brokering and trafficking because of the need for services; and the state’s interest in increasing the availability of quality recovery services to encourage patients’ recovery and stability.

The bill would ban patient brokering and require “licensed recovery programs to refer patients only to certified facilities that meet high standards of patient care and protect patients from physical, sexual or financial abuse,” according to a statement by Senator Lara.

Patient brokering is the practice of recruiting people in need of treatment for substance use disorder in exchange for kickbacks. This predatory practice – which may involve prowling recovery meetings, homeless camps, and drug courts- is, at its worst, associated with patient deaths and insurance fraud.

Senator Lara says that desperation is fueling a surge in patient brokering or patient trafficking, where patients are referred to recovery services that do not meet their needs and put them at risk of relapse.

Numerous news articles have shown the dreadful cost of brokering to patients and their families. Patients have been recruited with the offer of cash payments or drugs. Patients with acute medical needs have even died after being referred to facilities that did not meet their needs. Insurance fraud and overbilling for medical services can result from patient brokering.

After clients’ insurance coverage is exhausted, facility operators have allegedly been dumping them in the streets. The issue is largely attributed to facilities that do not require state licensure or oversight, including sober living homes.

A recent CDI investigation highlights the growing concern surrounding sober living homes. In November 2016, the CDI issued a press release about an investigation that resulted in the arrest of the operators of some Southern California sober living homes, Community Recovery of Los Angeles (CRLA).

Florida, New York, and more have banned patient brokering.

SB 1228 goes before the Senate Appropriation Committee on May 22.