The Eliminating Kickbacks in Recovery Act (EKRA) – What Treatment Facilities Need to Know

The Eliminating Kickbacks in Recovery Act (EKRA) – What Treatment Facilities Need to Know

February 20th, 2019

On October 24, 2018, the president signed into law the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act, commonly referred to as the SUPPORT for Patients and Communities Act. This comprehensive act brings together several key pieces of legislation meant to address the diverse areas of the substance abuse treatment, prevention, and enforcement conversation, including the Eliminating Kickbacks in Recovery Act (EKRA).

The EKRA seeks to address the issue of “patient brokering,” a practice that involves the enrollment of an addicted person by a third party into a private insurance plan for the purposes of entering them into a treatment or sober home in exchange for financial compensation. At the back end of the process, the facility bills the insurance company for what are very often substandard or nonexistent care services, leaving the patient worse off than when they entered the program.

Previous legislation that has attempted to address patient brokering, including the Anti-Kickback Statute (AKS) and the Stark Law, have been largely ineffective because they don’t deal with cases involving federal health care dollars; the EKRA permits federal prosecutors to bring charges in connection with any patient whose care is paid for by a private-pay insurer.

Examining Key Provisions of the EKRA

The EKRA has several critical and operational implications for treatment providers and addiction care professionals across the United States, and it’s important that the industry understands its rights and responsibilities under this law, and how best to comply:

Penalties for Patient Brokering

Under the EKRA, it is now a federal crime to knowingly and willfully solicit or receive any compensation in return for referring a patient to a recovery home, clinical treatment facility, or laboratory, or to pay or offer any remuneration either to induce such a referral or in exchange for an individual using the services of a recovery home, clinical treatment facility, or laboratory. Violation of this law is punishable by a fine of up $200,000 and a prison term of up to ten years.

Notable Exceptions to EKRA Enforcement and Prosecution

In an effort to promote increased affordability and accessibility to care, the authors of the EKRA have included several key exceptions within the law’s text, such as:

  • Appropriately documented and full disclosed discounts or other price reductions under a health care benefit program
  • Payments to an employee or independent contractor that do not vary based on the number of individuals referred, the number of tests or procedures performed, or the amount billed to or reimbursed from a health care benefit program
  • Payments by vendors to a party authorized to act as a purchasing agent or a group of individuals or entities who are furnishing services reimbursed if the agent has adequately documented and disclosed authority to act on their behalf
  • Drug discounts under the Medicare coverage-gap discount program
  • Payments made in accordance with the AKS’s personal services and management contracts
  • Waivers or discounts of any of any coinsurance or copayment by a health care benefit program, as determined by the health care benefit program
  • Alternative payment model payments or payments under an arrangement used by a state, health insurance issuer, or group health plan, if HHS determines it necessary for care-coordination or value-based care

It’s also important to note that certain payment models approved under the AKS may now be in violation of the EKRA.

What This Means for You and Your Addiction Treatment Center

At the very least, addiction treatment centers should embark on a thorough legal re-examination of their current payment model, insurance relationships, and peripheral third-party affiliations. Many treatment centers have traditionally aligned with third-party referral resources or have enlisted the services of marketing companies hired to generate leads and referrals.

A comprehensive examination of your treatment center’s current relationships with referral entities with the help of an attorney who is familiar with the entirety of the EKRA can help ensure your organization’s compliance. It’s entirely possible that your organization may have to make deep-rooted systemic changes to your existing referral agent compensation model.

The legislative and regulatory landscape of clinical addiction treatment is constantly changing, and the EKRA and similar measures have been put in place to protect integrity, quality, and efficacy of care. It’s important that treatment centers ensure they’re ready to maintain compliance with these changes. It might be time for an audit of your treatment center’s referral model.


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