California Legislation to Tighten Up Addiction Treatment Operations Awaits Governor’s Signature

Four bills designed to improve the quality of care provided by addiction treatment centers in California and curb their unethical practices have been passed by the state legislature and currently await the signature of Gov. Gavin Newsom.

Newsom has until Oct. 13 to sign the following four bills into law:

• Assembly Bill 920 requires the state Department of Health Care Services (DHCS) to license all outpatient alcohol and drug addiction treatment centers, starting Jan. 1, 2021. The bill also includes a requirement that treatment programs adopt the American Society of Addiction Medicine’s (ASAM) treatment criteria as a minimum standard of care.
• Assembly Bill 919 requires drug testing labs and treatment programs that operate housing for clients to have separate housing contracts with language indicating that payment for housing is the patient’s responsibility and rent cannot be indirectly billed to health insurance. The bill also requires recovery and treatment facilities to only offer postdischarge housing and specified transportation services under specific conditions, including that the patient enters into a repayment plan agreement to cover the cost of subsidized rent.
• Senate Bill 589 regulates marketing around rehabilitation facilities and sober homes by prohibiting such entities from producing false or misleading ads. The bill also cracks down on rehab operators who are presenting false contact information that “surreptitiously directs the reader to a business that does not have a contract with the entity.”
• Primarily written to address dialysis clinics, but also applicable to addiction treatment facilities, Assembly Bill 290 includes a provision that limits the payment amounts for services rendered to the Medicare rate when patients’ premiums are paid by a third party.

Gary Mendell, founder and CEO of the national not-for-profit addiction treatment advocacy group Shatterproof, lauded the legislature’s efforts to raise treatment standards and crack down on bad practices on various fronts.

“There has been a desperate need to examine the disparities in addiction treatment quality in California,” Mendell told BHE in an emailed statement. “AB 920 is a critical step toward that end so that we know the number of outpatient providers and have an expectation of standards for those providers. Further attention to the other elements that have contributed to this crisis is certainly warranted and we should be grateful for the work of the legislature to examine them.”