What began as a proposal to end sober home operators’ control over residents’ treatment ultimately became language that preserves the existing business model.
During workgroup sessions convened earlier this year under Virginia Senate Bill 838, the Department of Behavioral Health and Developmental Services (DBHDS) introduced draft language addressing what should happen when recovery residences cross the line into dictating clinical care — a practice at the center of ongoing concerns about resident exploitation, abuse of Medicaid funds, and oversight gaps.
The proposal drew that line clearly:
Require residences that provide clinical services…or require residents to participate in clinical services as a condition of living in the residence, to be licensed by DBHDS to operate
Dev Nair, DBHDS assistant commissioner for provider management, described the proposal as a matter of regulatory clarity rather than expansion:
From our standpoint, as soon as a recovery residence is dictating or requiring treatment services, then they’re operating more like a treatment provider.
If adopted, that language would have closed a widely exploited loophole that has allowed sober home operators to run de facto residential treatment programs while evading state regulations designed to protect residents’ safety, rights and wellbeing.
REVIEW >> Draft proposal could rattle Richmond’s sober-home-to-outpatient pipeline
The final recommendations, published a few days ago, fundamentally altered the proposal, embedding loopholes that could allow those practices to continue.
The final version states:
…require residences that require all residents to participate in the same outpatient treatment program as a condition of living in the residence to be licensed by DBHDS to operate.
By applying only when all residents are required to attend the same outpatient program, the provision leaves multiple avenues for operators to avoid licensure, such as:
- Requiring 14 out of 15 residents — but not “all” — to attend the same outpatient program;
- Splitting residents between multiple programs in which the operator has a financial stake; or
- Trading residents with other operators (“Send 10 residents to my program, and I’ll send 10 to yours”), a practice made especially simple when operators share buildings, as several in the Richmond area do.
Even if the final language were amended to prohibit operators from requiring specific treatment providers, allowing them to dictate clinical services in any way still creates opportunities for patient steering.
Years of testimony from sober home residents and former employees in the Richmond area point to a consistent pattern: When operators retain authority over any aspect of residents’ outpatient care, they can channel residents into programs that align with the operators’ financial interests — preserving the appearance of patient choice while structuring housing, transportation, assessments, program rules and house culture to ensure residents select the provider that benefits the operator.
As scrutiny around resident choice has grown in recent years, many operators appear to have refined this approach. According to dozens of residents interviewed across multiple Richmond-area organizations, the process often unfolds as follows:
- Screening for billability. Operators screen prospective residents for outpatient eligibility, exclusively admitting those who will qualify for the operator’s Medicaid-funded outpatient program — typically individuals detoxing or very early in sobriety.
- Mandatory assessment. Once admitted, residents are required to undergo a formal clinical assessment with the operator’s affiliated outpatient provider, which predictably confirms eligibility for billable services.
- Enforced level of care. The operator then mandates participation in the exact level of treatment identified by that assessment. Residents’ preferences, prior treatment experience and individual needs and circumstances are secondary, if considered at all.
- Illusion of choice. On paper, residents are free to choose their provider. In practice, program culture and logistical barriers leave no viable alternatives. Transportation is provided only to the affiliated program, residents often lack funds for alternate transportation, and many are prohibited from driving during their first 30 days in the house. Residents also learn which choices are acceptable, and attempting to seek care elsewhere can carry consequences, including increased scrutiny or risk of eviction under other grounds.
- Displaced priorities. Meanwhile, other critical and sometimes more pressing needs — medical appointments, individual therapy or securing identification and employment — are often delayed or ignored.
This de facto residential treatment model would not have survived under DBHDS’ original proposal, but the final language leaves the same loophole intact.
Hallie Pence, representing the governor’s office, said in an email that the final recommendations reflect a coordinated effort to strengthen oversight of recovery housing while promoting transparency and resident empowerment. She added that the recommendations “establish a path toward a meaningful certification and oversight system that protects residents, supports responsible operators, and gives communities confidence that recovery housing in Virginia is safe, transparent, and accountable.”
Pence told me the recommendation at issue was drafted to reflect that intent, with an emphasis on ensuring that residents “have agency in their recovery journey” and that clinical advice and resources remain with qualified professionals. She noted the specific language was drawn from a 2025 public policy statement of the American Society for Addiction Medicine (ASAM), which recommended that governments require the following types of recovery residences to meet ASAM Level 3.1 program standards — effectively triggering licensure as a substance use disorder (SUD) treatment program:
(i) clinical recovery residences; and (ii) nonclinical recovery residences that require all residents to attend the same outpatient treatment program
While that policy statement offers broad recommendations for integrating stable housing into SUD treatment services, it doesn’t serve as a guide on how to protect residents’ agency outside of licensed settings.
Nor does it suggest that narrowly licensing one category of recovery residence should permit unlicensed operators to dictate aspects of residents’ clinical care.
To tackle that issue, SB838 explicitly charged the workgroup with developing:
protocols to ensure resident and patient choice in receiving treatment and that the recovery residence operator, the house manager, or anyone in leadership with the recovery residence is not determining the treatment received
DBHDS’ original proposal met that objective by requiring licensure whenever a residence “require[s] residents to participate in clinical services as a condition of living in the residence.” By contrast, adopting ASAM’s narrower language without additional safeguards leaves intact the same structural vulnerabilities that the workgroup was tasked with addressing.
The final recommendations acknowledge that DBHDS certification should ensure recovery residences foster “self-directed care and freedom of choice.” But they contain no enforceable language to ensure that outcome.
Notably, Pence closed her response by signaling openness to further refinement during the legislative process:
We understand the importance of the precision of language when drafting legislation, so we are happy to work with Members while drafting the legislation for this upcoming Session and will engage with legislators and stakeholders to ensure the language executes appropriately on the intent. We are grateful for the engagement and participation from stakeholders, and we hope to continue to see that as we make sure Virginians in recovery are supported and empowered.
Sen. Schuyler VanValkenburg (D-Henrico), who sponsored the bill creating the SB838 workgroup, said in a text message that he had not yet had a chance to review the specific issue, but noted that “moving forward we are trying to ensure we submit a bill that reflects the consensus of the group.”
Despite the lack of follow-through on resident choice — and lingering ambiguity in other key areas, including eviction protocols — the final recommendations did deliver more consistently in other respects, such as:
- Authorizing more direct, hands-on oversight by DBHDS;
- Creating multiple certification pathways, eliminating exclusive control by a single private entity;
- Prohibiting certain conflicts of interest within credentialing entities; and
- Creating avenues for residents to bring complaints directly to DBHDS
(The full report can be accessed here.)
What happens next
A bill still must be drafted to codify the workgroup’s recommendations into law.
That legislative step presents an opportunity for lawmakers to fine-tune how the recommendations are translated into statutory language, including how provisions related to resident choice and the role of recovery house operators in clinical decision-making are addressed.
While VanValkenburg has already stated his intent to be involved in that legislation, it remains to be seen who will ultimately serve as the bill’s patrons.
In the meantime, readers who wish to weigh in on any of the issues addressed in the final recommendations can do so by contacting their legislators directly. The state’s Who’s My Legislator? service can help identify the appropriate representatives.
I’ll continue to follow the process closely and provide updates as it moves forward.
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