The Eliminating Kickbacks in Recovery Act of 2018: A new federal kickback law affecting the substance abuse treatment community
There’s a new federal kickback law to worry about, and it applies to all payors including commercial plans, not just federal health care programs. The Eliminating Kickbacks in Recovery Act of 2018 (EKRA) is part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act, which was signed into law by President Trump on October 25, 2018, and includes provisions on a wide range of topics related to the opioid crisis.
EKRA prohibits knowingly and willfully:
1. Soliciting or receiving any remuneration (including any kickback, bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility or laboratory; or
2. Paying or offering any remuneration (including any kickback, bribe or rebate) directly or indirectly, overtly or covertly, in cash or in kind
a. To induce a referral of an individual to a recovery home, clinical treatment facility or laboratory; or
b. In exchange for an individual using the services of that recovery home, clinical treatment facility or laboratory.
The terms “recovery home,” “clinical treatment facility” and “laboratory” are defined in the law.
EKRA includes seven statutory exceptions that describe situations where EKRA will not apply, some of which are similar to the federal Anti-Kickback Statute (AKS) safe harbors. However, one big difference between the AKS safe harbors and the EKRA exceptions is how compensation to employees and independent contractors is treated. The EKRA exception:
Applies to both employees and independent contractors (the AKS safe harbor only protects compensation to bona fide employees); and
Will only protect payments made by an employer to an employee or independent contractor if the payment is NOT determined by or DOES NOT vary by:
the number of individuals referred to a particular recovery home, clinical treatment facility or laboratory;
the number of tests or procedures performed; or
the amount billed to or received from, in part or in whole, the health care benefit programs of the individuals referred to a particular recovery home, clinical treatment facility or laboratory.
The AKS safe harbor for bona fide employees protects such commission-based compensation methods. As a result, EKRA prohibits certain marketing practices from being used by the substance abuse treatment community and creates criminal penalties (fines of up to $200,000, imprisonment for up to 10 years or both) for each violation.
Recovery homes, clinical treatment facilities and laboratories that employ or contract with individuals to provide marketing services should review their contracts and employment arrangements to ensure they comply with this new law in order to avoid possible criminal penalties.
This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.Download PDF