LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 3973
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: MARCH 25, 2025
SUMMARY
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Synopsis: |
Revises law concerning patient referrals to substance use disorder treatment facilities, recovery residences, and clinical laboratories. |
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Type of Impact: |
Annual State expenditure and revenue increases. |
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Agencies Affected: |
Department of Law and Public Safety; the Judiciary; Office of the Public Defender, Department of Health, Department of Community Affairs, Office of Administrative Law. |
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Office of Legislative Services Estimate |
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Annual Fiscal Impact |
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State Expenditure Increase |
Indeterminate |
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State Revenue Increase |
Indeterminate |
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· The Office of Legislative Services (OLS) finds that the bill’s expansion of current law concerning patient referrals to substance use disorder treatment facilities to include health care providers, health care facilities, non-profit organizations, clinical laboratories, and recovery residences would increase the workload of the Department of Law and Public Safety, the Judiciary, and the Office of Public Defender by an indeterminate amount to the extent the bill results in additional trials and court costs.
· The bill would increase the workload of the Department of Community Affairs, the Department of Health, the Division of Consumer Affairs in the Department of Law and Public Safety, and the Office of Administrative Law to the extent the bill results in additional investigations of licensed providers or facilities and licensing adjudications.
· The State may receive additional indeterminate annual revenues from increased fines and penalties assessed on individuals convicted of the upgraded crimes, and from increased fines and penalties assessed on licensed facilities found in violation of the bill’s provisions. In addition to upgrading the crimes from the fourth degree to the third degree, thereby raising the applicable criminal fines from $10,000 to $15,000, the bill establishes an additional fine of $50,000 that would automatically be applied to any person who violates the patient referral laws. Moreover, the bill establishes a $20,000 civil penalty on licensed facilities found in violation of the bill’s provisions. The OLS notes, however, that the State’s ability to collect monetary fines assessed in criminal cases has historically been limited.
BILL DESCRIPTION
This bill revises current law that criminalizes certain payments for the referral of patients to substance use disorder treatment facilities, recovery residences, and clinical laboratories. The bill makes it a crime of the third degree for a person to make, solicit, offer, or receive a payment or otherwise furnish, solicit, offer, or receive any fee, commission, kickback, bribe, or rebate to any person in connection with the referral of patients to, or in exchange for a patient using the services of, a substance use treatment disorder provider or facility. The bill also provides that a person is guilty of a crime of the third degree if the person knowingly assists, conspires with, or urges any person to make, solicit, offer, furnish, or receive a payment, fee, commission, or rebate in violation of the bill’s provisions. A crime of the third degree is ordinarily punishable by a term of three to five years imprisonment, a fine of up to $15,000, or both. Under current law, these offenses are crimes of the fourth degree, which are punishable by a term of imprisonment of up to 18 months, a fine of up to $10,000, or both. Under the bill, a person convicted under either of these offenses additionally would be required to make restitution and pay a fine of $50,000.
The bill expressly includes within its scope health care providers, non-profit organizations, health care facilities, and clinical laboratories licensed by the Department of Health, and recovery residences licensed by the Department of Community Affairs. The bill also authorizes the Department of Health and the Department of Community Affairs to investigate and take licensing action against facilities or providers alleged to be in violation of the bill’s provisions. If a violation is found, the licensee may be assessed a civil penalty of $20,000 in addition to license suspension or revocation.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill’s expansion of current law concerning patient referrals to substance use disorder treatment facilities to include health care providers, health care facilities, non-profit organizations, clinical laboratories, and recovery residences would increase the workload of the Department of Law and Public Safety, the Judiciary, and the Office of Public Defender by an indeterminate amount to the extent the bill results in additional criminal prosecutions and court costs. Additionally, the bill would increase the workload of the Department of Community Affairs, the Office of Licensing in the Department of Health, the Division of Consumer Affairs in the Department of Law and Public Safety, and the Office of Administrative Law to the extent the bill results in additional investigations of licensed providers or facilities and licensing adjudications.
Generally, crimes of the third degree carry the presumption of non-incarceration for first time offenders. However, repeat offenders could face incarceration. The OLS notes that to the extent the bill results in additional incarcerations, the Department of Corrections would incur those costs. Based on information provided by the department, the FY 2023 average annual cost for housing, ensuring security, and providing services to an incarcerated individual was $75,574, with an average daily cost of $207.
The State may receive additional indeterminate annual revenues from increased criminal fines because the upgraded crimes carry increased financial penalties. Moreover, in addition to upgrading the crimes from the fourth degree to the third degree, the bill establishes a fine of $50,000 that would automatically be applied to any person who violates the patient referral laws. Furthermore, the bill establishes a $20,000 civil penalty on licensed facilities found in violation of the bill’s provisions. The OLS notes, however, that the State’s ability to collect monetary fines assessed in criminal cases has historically been limited.
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Section: |
Judiciary |
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Analyst: |
Associate Counsel |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).