Legislation Introduced to Protect Patients in Recovery

The COVID-19 pandemic has led to an unprecedented rise in substance use and an increasing number of Californians have begun to search for recovery services. But well-documented abuses of vulnerable patients, including death and serious injury, show the need for additional consumer protections.

“Can you imagine what it’s like to begin a drug or alcohol recovery program and then be faced with substandard and abusive care? It’s no wonder suicide rates have tragically increased,” said AB 1158 Author Assemblywoman Cottie Petrie-Norris (D-Laguna Beach). “It is critical that patients at treatment facilities receive the care they need without worrying about their safety. By guaranteeing minimum insurance coverage levels, patients will be much better protected.”

“Californians seeking help for alcohol and substance use urgently need additional consumer protections now more than ever during this pandemic,” said Commissioner Lara, who leads enforcement personnel at the Department of Insurance charged with investigating fraud and abuse. “Requiring minimum insurance standards and reporting of injuries and deaths means my Department’s investigators can swiftly act to protect public health and safety.”

While there are many good actors in the state helping individuals get on their feet, media reports detail unscrupulous business practices that exploit patients for profits, including the Orange County Register’s investigative series about Southern California’s “Rehab Riviera” that highlighted the problems caused by unlicensed recovery residences operating with little to no government regulation or private insurance industry risk management.

AB 1158 will require a recovery residence, including a sober living home, that contracts with a government entity or an alcohol or drug abuse recovery or treatment facility that is licensed by the government to maintain minimum insurance coverage levels, including liability and workers’ compensation to protect patients and workers on site. Additionally, this proposal would increase the ability for an insurance company to protect the well-being of people in recovery by ensuring a residence or facility’s compliance with health and safety standards, including reporting any incidents of death or injuries requiring hospitalization, back to the insurance company and respective government entity. This proposal will enhance the ability of state regulatory agencies to work collaboratively to investigate insurance complaints, protect patients, and prevent fraud at these facilities and residences.

“We cannot allow grifters who masquerade as substance abuse recovery providers to abuse their caregiver status just to turn a profit,” said Casey Johnson, Board of Directors Member, Consumer Attorneys of California. “Californians working hard to recover from drug and alcohol addiction deserve the high quality of care they are paying for, and AB 1158 will ensure the victims of the unscrupulous ‘patients for profits’ business model can pursue justice when they are harmed or taken advantage of by bad actors in the addiction treatment industry.”