Before you take the client
Tennessee's lead-gen ban for treatment referrals
The per-lead model is out; the disclosed, flat-fee model survives.
Tennessee outlawed the pricing agencies like most, not marketing. Tenn. Code Ann. 33-2-423 bans paying or taking a commission, rebate, or split fee for a treatment referral, and bars lead-generation contracts through a call center or website unless callers are told who pays the marketer. That ends per-lead and per-admission pay; disclosed flat fees remain.
Tennessee's marketing rules for addiction treatment live in one section, Tenn. Code Ann. 33-2-423, "Prohibited marketing practices," enacted by Public Chapter 978 and effective July 1, 2018. It targets four things a provider or its marketer cannot do: False identity or claims, no materially false or misleading statement about identity, products, services, or location (subsection (a)(1)); Deceptive web routing, no false information or coded links that deceptively redirect a reader, the classic "neutral directory" funneling every caller to one buyer (subsection (a)(2)); Referral commissions, no soliciting or receiving a commission, benefit, rebate, kickback, or bribe and no split-fee arrangement for a referral (subsection (a)(3)); and Undisclosed lead-gen contracts, no contract with a marketing provider generating referrals or leads through a call center or web presence unless callers are told in clear language which providers pay the marketer (subsection (a)(4)). Read (a)(3) and (a)(4) together: you cannot be paid per referral at all, and even flat-fee lead generation must disclose the paid relationship to the person on the phone.
An alcohol and drug treatment service provider or operator shall not solicit or receive a commission, benefit, rebate, kickback, or bribe, or engage in a split-fee arrangement, in return for a referral; nor enter into a contract with a marketing provider that generates referrals or leads through a call center or web-based presence unless the disclosures required by this section are made to the prospective patient.
On its face, 33-2-423 speaks to the "provider or operator," but two things pull the agency in. First, subsection (a)(4) governs the contract with the marketing provider, so the arrangement an agency signs is itself the regulated object, and a provider cannot lawfully sign the per-referral deal a vendor proposes. Second, Tennessee backstopped the provider-side ban with Tenn. Code Ann. 63-1-159, which bars a licensed health professional from paying a commission or split fee to induce a treatment referral, so both the paying and receiving sides are covered. The result: a Tennessee treatment client cannot buy what a per-lead vendor is selling, and a vendor who structures around the ban is asking a licensee to risk suspension or worse. There is no version where only the clinic is exposed and the agency walks away clean.
A health care provider licensed under this title shall not knowingly offer or pay a commission, benefit, rebate, kickback, or bribe, directly or indirectly, in cash or in kind, or engage in any split-fee arrangement, to induce the referral of a patient or patronage to or from a licensee or facility licensed under title 33, chapter 2, part 4.
The scanner reads the pricing an arrangement advertises, not the contract itself. A per-lead offer aimed at Tennessee providers is the tell.
Tennessee treatment centers: we deliver verified admits and bill you 450 dollars per admission, so you pay only for results.
Paying per admission or per referral for Tennessee treatment placements is a commission or split-fee for a referral, which Tenn. Code Ann. 33-2-423(a)(3) prohibits outright. No disclosure cures a volume-based referral fee.
Tennessee per-referral pay and lead-gen disclosure · Tenn. Code Ann. 33-2-423
Tennessee treatment centers: a flat monthly retainer for campaign management, and every intake page names who pays us for placement.
A fixed fee untied to referral volume, run with the 33-2-423(a)(4) disclosure of who pays the marketer, is the structure Tennessee leaves open.
Sources
Pre-Trip is a rigorous screen, not legal advice. Counsel decides; we help you arrive prepared.