New Laws to be Implemented Regarding Kickbacks and Opioid Treatment

The Eliminating Kickbacks and Recovery Act of 2018 (EKRA) is part of a group of laws that was recently passed by the United States Congress to expand the spectrum of law enforcement available to fight the opioid epidemic. The main legislation, known as the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act (the SUPPORT Act), consolidated multiple opioid-related bills, including EKRA.

EKRA was initially introduced and intended to address the problem of “patient brokering” in the context of treatment centers and sober homes. “Patient brokering” refers to a third party enrolling an addicted patient into a private health insurance plan and then arranging for the addicted patient to enter a treatment facility or sober home (usually in another state) in exchange for a kickback payment. The sober home or treatment facility then bills the insurance company for treatment services, which are often substandard or never even provided at all.

However, because this act typically involves private pay insurance, the Anti-Kickback Statute (AKS) is not available to prosecute and stop the practice because federal healthcare dollars are not involved. EKRA, therefore, is intended to step into this “gap” in the law to allow federal prosecutors to bring charges in connection with any patient whose care is paid for by a private health insurer. Doing so essentially eliminates Safe Harbor protections by statutorily narrowing the available protections.

EKRA states that “whoever” (expanding from just providers or doctors as in the Stark Act) with respect to any “healthcare benefit program” solicits or receives remuneration in return for referring a patient or patron to a recovery home, clinical treatment facility or laboratory, or who pays or offers any remuneration directly or indirectly to induce referrals of an individual to a recovery home, clinical treatment facility or laboratory, or in exchange for any individual using such services, shall be fined no more than $200,000, imprisoned for no more than 10 years, or both for each occurrence.

As noted above, Safe Harbor protections are drastically reduced, as the only exceptions that the Act does not apply to are:

1. A discount or other reduction in price obtained by a provider or other entity under a healthcare program if the reduction is properly disclosed and appropriately reflected in cost or charges.
2. A payment made by an employer to an employee or an independent contractor (who have “bonafide” relationships with the employers) if the payment is not determined by or does not vary by:
   1. The number of individuals referred to a particular recovery home, clinical treatment facility or laboratory,
   2. The number of tests or procedures performed, or
   3. The amount billed to or receipt from the healthcare benefit program from the individuals referred to a particular recovery home, clinical treatment facility or laboratory.
3. Bonafide drug discounts.
4. Payments made as compensation for services under the personal services and management contract Safe Harbor provisions of 42 CFR 1001.952(d).
5. Waivers or discounts defined in 42 CFR 1001.952(h)(5) or other co-insurance or co-payments of the healthcare program.