Minnesota’s New Law Limits Access to Sober Housing

Jeffrey Lynne
Nov 14
3 min read

Minnesota has recently enacted an anti‑kickback law that took effect on August 1, 2025, impacting access to sober housing for people in recovery. The law prohibits service providers from offering financial incentives to clients or referral sources. As a result, thousands of residents who previously relied on subsidized sober housing must now cover rent themselves or seek alternative accommodations.

The Role of Sober Housing

Sober housing provides a structured, communal environment where residents pursuing recovery live together, share routines, and support one another. This communal living helps reduce social isolation—a major factor in relapse—and allows peers to hold each other accountable. Financial assistance from treatment centers or housing stipends has historically been a key component in helping residents transition from inpatient care to independent living.

With the removal of such subsidies, both clients and providers are facing significant disruption. Many residents are struggling to secure housing and maintain recovery routines, while service providers must adjust operations to comply with the new law.

Impact on Recovery Communities

Prior to the law, a majority of sober house residents relied on housing subsidies. The abrupt implementation has already caused the closure of multiple sober houses, with additional closures anticipated. Providers warn that the strain will extend to social service systems, including homeless shelters, hospitals, and outpatient programs.

Many residents are now forced to focus on securing housing and employment instead of fully engaging in recovery, which may exacerbate challenges for individuals with limited financial resources, poor credit histories, or other barriers related to substance use.

Purpose and Rationale of the Law

Minnesota officials implemented the law to prevent potential fraud and misuse in addiction treatment and social service programs. The state cites high-profile cases in which treatment providers allegedly submitted false claims or offered improper incentives, underscoring the need for stricter oversight. While federal anti-kickback regulations already exist, this state law allows Minnesota to enforce similar rules locally and clarify ambiguities in prior housing support practices.

The Minnesota Department of Human Services is planning to transition sober houses to a certified recovery residence model, which may allow future state funding. However, advocates are concerned the process will take time, leaving many residents without essential housing support during the interim.

Operational Challenges for Providers

Sober houses typically operate on narrow financial margins, covering costs such as rent, utilities, maintenance, and basic household needs. Without subsidies, many houses cannot sustain operations, and providers anticipate further closures. These challenges highlight how policy changes, even with well-intended fraud prevention goals, can inadvertently disrupt access to recovery services.

Origins of The Florida Model: Minnesota

The Minnesota Model of sober living is a widely influential approach to addiction treatment and recovery that emerged in the 1940s and 1950s in Minnesota. It integrates professional treatment with the principles of Alcoholics Anonymous (AA) and emphasizes a holistic, client-centered, and multidisciplinary approach to recovery.

How Florida’s Patient Brokering Act and EKRA Are Fighting Fraud in Sober Living

In recent years, widespread fraud in the addiction treatment and sober living industry—especially in Florida—has prompted strong legal responses. Two key laws have emerged to tackle this issue: Florida’s Patient Brokering Act and the federal Eliminating Kickbacks in Recovery Act (EKRA).

Both laws target illegal kickbacks, where treatment centers, labs, or sober homes pay or receive money for patient referrals. These practices have led to inflated insurance billing, unnecessary drug testing, and exploitation of vulnerable individuals seeking recovery.

Florida’s Patient Brokering Act makes it a felony to offer or accept any kind of benefit in exchange for referrals. EKRA expands on this at the federal level, covering both public and private insurance cases, and closing loopholes that previously allowed unethical actors to evade prosecution.

Authorities have used these laws to arrest and convict sober home operators, lab owners, and patient recruiters involved in elaborate fraud schemes. While enforcement challenges remain, these legal tools have significantly disrupted the “patient brokering” business model and are helping restore integrity to addiction recovery services.

Supporting Behavioral Health Providers

The situation in Minnesota underscores the legal and regulatory challenges behavioral health agencies face nationwide. Lynne Legal, based in Florida, partners with behavioral health organizations to help them navigate zoning, funding, and compliance issues while ensuring discrimination or regulatory barriers do not prevent access to care.

Behavioral health providers’ mission is to deliver compassionate, lifesaving care. Lynne Legal’s mission is to ensure that zoning, funding restrictions, and regulatory hurdles—including hidden discrimination—never stand in the way of that essential work.

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