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Ohio Recovery Housing Overhaul: New Standards and Certification Requirements Reshape Sober Living Spaces

Client Alert

For years, the State of Ohio lacked uniformity over the operation of “recovery houses” — sometimes referred to as “sober living” spaces, “halfway houses,” and so on. Ohio law broadly defines these as residences “for individuals recovering from alcohol use disorder or drug addiction that provide an alcohol-free and drug-free living environment, peer support, assistance with obtaining alcohol and drug addiction services, and other recovery assistance for alcohol use disorder and drug addiction.” See R.C. 5199.01(A)(17). 

Operators could, for example, voluntarily obtain certification through the Ohio-certifying body or, alternatively, elect to run their recovery residence(s) with no oversight and/or certification — in turn, creating a statewide system of residential recovery spaces that provided inconsistent functions and standards. That system, however, is in the midst of a complete overhaul. 

Now, “recovery houses” (and all other similarly named residential recovery spaces) have statutory standards to satisfy pre-operation — a process which is a considerable undertaking. 

One new measure requires all existing recovery housing residences, as well as those intending to operate in the future, to register with the Ohio Department of Mental Health & Addiction Services (OHMHAS). Under Ohio law, existing operators were required to register on or before October 3, 2023; however, the form remains open for late filings and updates as necessary. Newly established recovery housing residences have a grace period of thirty (30) days from the start of their operation (i.e., the date on which the first resident occupies the residence) to complete the OHMHAS registration form. 

In addition to the OHMHAS registration requirement, effective January 1, 2025, the State of Ohio will begin enforcing new requirements which bar individuals and/or entities from operating, advertising, or even representing any residence as a “recovery housing residence, sober living home, or any other alcohol and drug free housing for persons recovering from alcohol use disorder” or substance use disorder without taking the appropriate certification steps through, without limitation, Ohio Recovery Housing or Oxford House, Inc. See R.C. 5119.39.

Certification is a substantial process — requiring, among other things, policies and procedures governing residents’ rights and responsibilities; a resident agreement and legally compliant leasing arrangement; and completion of, and compliance with, a checklist of pre-operation deliverables. 

The range of requirements as applied to the individual circumstances of each recovery housing operator can make identifying priorities and achieving compliance incredibly complex. For more information or for assistance navigating and completing the recovery housing registration and/or certification processes, please contact Monica Andress at (330) 253-9153 or mbandress@bmdllc.com.


Corporate Transparency Act to be Re-evaluated

Recent federal rulings have impacted the enforceability of the Corporate Transparency Act (CTA), which took effect on January 1, 2024. While reporting requirements were briefly reinstated, FinCEN has now paused enforcement and is reevaluating the CTA. Businesses are no longer required to submit reports until further guidance is issued. For updates and legal counsel, contact BMD Member Blake Gerney.

Ohio Recovery Housing Operators Beware: House Bill 58 Seeks to Make Major Changes

Ohio House Bill 58 proposes significant changes to recovery housing oversight, granting ADAMH Boards authority to inspect and investigate recovery residences. The bill also introduces a Certificate of Need (CON) program, requiring state approval for major facility changes. OMHAS will assess applications based on cost, quality, accessibility, and financial feasibility. The bill also establishes a recovery housing residence fund to support inspections. For more information, contact BMD attorneys Daphne Kackloudis or Jordan Burdick.

January 2025 Notice of Proposed Rulemaking Brings Notable Changes to HIPAA Security Rule

In January 2025, the U.S. Department of Health and Human Services proposed amendments to the HIPAA Security Rule, aiming to enhance cybersecurity for covered entities (CEs) and business associates (BAs). Key changes include mandatory compliance audits, workforce training, vulnerability scans, and risk assessments. Comments on the proposed rule are due by March 7, 2025.

Corporate Transparency Act Effective Again

The federal judiciary has issued multiple rulings on the enforceability of the Corporate Transparency Act (CTA), which took effect on January 1, 2024. Previously, enforcement was halted nationwide due to litigation in Smith v. U.S. Department of the Treasury. However, on February 18th, the court lifted the stay, reinstating the CTA’s reporting requirements. Non-exempt entities now have until March 21, 2025, to comply. Businesses should act promptly to avoid civil penalties of $591 per day and potential criminal liability.

Status Update: Physician Noncompete Agreements in Ohio

Noncompete agreements remain enforceable in Ohio if they meet specific legal requirements. While the AMA and FTC have challenged these restrictions, courts continue to uphold reasonable noncompete provisions for physicians. Recent cases, like MetroHealth System v. Khandelwal, highlight how courts may modify overly restrictive agreements to balance employer interests with patient care. With ongoing legal challenges to the FTC’s proposed ban, Ohio physicians should consult a healthcare attorney before signing or challenging a noncompete agreement.