Two Bills Target Deceptive Rehab Marketing, Kickbacks

TRENTON – Two bills designed to strengthen consumer protections in New Jersey’s addiction recovery industry were signed into law on Monday, August 11, 2025, by Acting Governor Tahesha Way.

Bill A3973 and A3974, both sponsored by Assemblyman Anthony S. Verrelli, will help safeguard the rights of people living in sober homes and treatment facilities.

Last year, the State of New Jersey Commission of Investigation (SCI) issued a report highlighting fraud, ethical misconduct and corruption in the Addiction Rehabilitation Industry. This included patient brokering, questionable financial conduct, and deceptive marketing tactics within certain facilities that provide treatment and house sober living patients. The legislation signed into law aims to regulate the industry in order to eradicate this behavior.

“Families deserve to know that their loved ones are being referred to treatment centers for the right reasons, and just as importantly, that those seeking help aren’t being misled by deceptive and unethical schemes,” said Assemblyman Verrelli (D-Mercer, Hunterdon). “That’s why these bills are so important, cracking down on exploitative practices that prey on people in crisis and ensuring patients have access to accurate, honest information, not false promises that stand in the way of recovery.”

Bill A3974 sponsored by Assemblymen Verrelli and Cody D. Miller and Assemblywoman Rosaura “Rosy” Bagolie, will prohibit treatment providers or recovery residences from engaging in deceptive practices such as making false statements about their status as an in-network or out-of-network provider, providing misleading information regarding services or location, redirecting potential patients to alternative websites without consent, and falsely claiming affiliations with other treatment providers without written consent.

“Deceptive marketing practices not only erode trust but can also derail the recovery journeys of individuals fighting addiction,” said Assemblyman Miller (D-Atlantic, Camden, Gloucester). “A3974 is about putting the patient's well-being first and will ensure that everyone can continue to have faith in the treatment process.”

“When someone is in crisis, they deserve to feel confident that the information they receive is reliable,” said Assemblywoman Bagolie (D-Essex, Passaic). “This bill puts common-sense safeguards in place to ensure transparency and accountability among treatment providers, and I’m thrilled to see it signed into law.”

Bill A3973, sponsored by Assemblymen Verrelli and Avi Schnall, and Assemblywoman Verlina Reynolds-Jackson, will revise the law concerning patient referrals to substance use disorder treatment facilities, recovery residences, and clinical laboratories. Specifically, it will elevate referral-related payments such as kickbacks or bribes to a third-degree crime and impose a $50,000 fine for violations, while expanding these protections to include recovery residences and clinical laboratories, non-profit organizations, healthcare providers, and healthcare facilities.

"People battling addiction should not have to worry whether they’re being manipulated for someone else’s financial benefit, something that is not only unethical but also deeply harmful," said Assemblyman Schnall (D-Monmouth, Ocean). "Every person deserves access to treatment that’s chosen for the right reasons, and through A3973, we're putting safeguards in place to stop these predatory referral schemes and help hold those responsible fully accountable.“

“When the referral process is compromised, the entire foundation of treatment and recovery is at risk,” said Assemblywoman Reynolds-Jackson (D-Mercer, Hunterdon). “People deserve to know they’re being guided toward care that’s right for them, not care that benefits someone else’s bottom line. With this bill, we're empowering patients, and I'm so grateful to see it get signed into law."

Both bills take effect immediately.

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