Most health care providers have at least a basic understanding of the Anti-Kickback Statute. This federal law prohibits providers from offering, paying, soliciting, or accepting any form of “remuneration” for patient referrals paid with funds received from government health care benefit programs. Most physicians are aware of the Stark Law as well—a federal law that imposes civil fines for doctors who engaging in unlawful “self-referrals” involving Medicare and Medicaid beneficiaries.
However, there is another federal law that prohibits unlawful referral-related compensation and that is far less well-known in the health care sector. This is the Eliminating Kickbacks in Recovery Act (EKRA), which was enacted in 2018 as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act).
What Do Health Care Providers Need to Know about the Eliminating Kickbacks in Recovery Act (EKRA)?
The EKRA is similar to the Anti-Kickback Statute and Stark Law in that it prohibits compensation for patient referrals. However, the EKRA differs from these statutes in several important respects as well. As a result, health care providers and professionals must address EKRA compliance separately from Anti-Kickback Statute and Stark Law compliance, and they cannot rely on their existing policies and procedures to mitigate their risk under the EKRA.
1. The EKRA Applies to Patient Referrals to Recovery Homes, Clinical Treatment Facilities, and Laboratories
As a component of the SUPPORT ACT’s legislative package, the EKRA has modest ties to the SUPPORT Act’s focus on combatting the nation’s opioid epidemic. Specifically, the EKRA is limited in scope to unlawful referral transactions (and attempted or proposed transactions) involving recovery homes, clinical treatment facilities, and laboratories. Each of these types of entities is statutorily defined, although the statutory definitions generally align with the commonly understood descriptions of these facilities.
However, while the EKRA applies exclusively to referral transactions involving recovery homes, clinical treatment facilities, and laboratories, all types of health care providers and professionals can face penalties for non-compliance. This is because the EKRA prohibits the offering, payment, solicitation, and receipt of unlawful “remuneration.” Thus, a physician who sought or accepted a referral fee for directing a patient to a particular clinical treatment facility, for example, would be at risk for prosecution under the EKRA.
2. The EKRA Prohibits All Forms of Remuneration (with Some Exceptions)
The EKRA is structured similarly to the Anti-Kickback Statute in that it establishes broad prohibitions which are then scaled back with a list of specific exceptions. However, the EKRA’s statutory exceptions are neither the same as nor as extensive as those under the Anti-Kickback Statute. As a baseline, Section 220(a) of EKRA prohibits three specific types of knowing and willful conduct:
- Soliciting or receiving, “any remuneration (including any kickback, bribe, or rebate),” in exchange for referring a patient to a recovery home, clinical treatment facility, or laboratory;
- Paying or offering any remuneration to induce the referral of a patient to a recovery home, clinical treatment facility, or laboratory; and,
- Paying or offering any remuneration in exchange for a patient using the services of a recovery home, clinical treatment facility, or laboratory.
Then, Section 220(b) EKRA goes on to provide that the following types of offers and payments are excepted from the prohibitions in Section 220(a):
- Disclosed Price Discounts – “[A] discount or other reduction in price obtained by a provider . . . if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider . . . .”
- Bona Fide Employee Compensation – “[A] payment made by an employer to an employee or independent contractor (who has a bona fide employment or contractual relationship with such employer) for employment, if the employee’s payment is not determined by or does not vary by [volume of referrals, tests, procedures, or billings].”
- Medicare Part D Discounts – “[A] discount in the price of an applicable drug of a manufacturer that is furnished to an applicable beneficiary under the Medicare coverage gap discount program . . . .”
- Personal Services – “[A] payment made by a principal to an agent as compensation for the services of the agent under a personal services and management contract that meets [federal] requirements . . . .”
- Copay Waivers – “[A] waiver or discount . . . of any coinsurance or copayment by a health care benefit program if [provided in good faith and not as a matter of routine].”
- Federally Qualified Health Centers – “[A] remuneration described in section 1128B(b)(3)(I) of the Social Security Act (42 U.S.C. 1320a–7b(b)(3)(I)) [pertaining to Federally Qualified Health Centers].”
- Alternative Payment Models – “[A] remuneration made pursuant to an alternative payment model (as defined in . . . the Social Security Act) or pursuant to a payment arrangement used by a State, health insurance issuer, or group health plan if [approved by] the Secretary of Health and Human Services . . . .”
The EKRA also allows for the adoption of additional exceptions by regulation. To date, no such regulations appear to have been promulgated.
3. The EKRA Applies to Remuneration Paid with Funds Received from All Payors
Another critical difference between the EKRA and the Anti-Kickback Statute and Stark Law is that the EKRA applies to remuneration paid with funds received from all payors. While the Anti-Kickback Statute applies to federally-reimbursed funds and the Stark Law is specific to Medicare and Medicaid, the EKRA encompasses all services that are, “covered by a health care benefit program.”
Under 18 U.S.C. Section 24(b), a “health care benefit program is defined as, “any public or private plan or contract . . . under which any medical benefit, item, or service is provided to any individual . . . .” Thus, the EKRA applies not only to remuneration paid in connection with referrals of federal health care benefit program beneficiaries, but to remuneration paid in connection with patients who have private health insurance coverage as well.
4. The Penalties for EKRA Non-Compliance are Substantial
Under the EKRA, the penalties for offering, paying, soliciting, and receiving unlawful compensation for referrals are substantial—even more substantial than those under the Anti-Kickback Statute. The EKRA is a criminal statute, and this means that facility owners, company executives, professionals, and other providers that violate the statute can face fines and federal imprisonment. For each individual violation of the statute (i.e. each individual unlawful payment), the maximum penalties are a $200,000 fine and 10 years of incarceration.
In order to give rise to criminal culpability under the EKRA, an unlawful payment (or offer or solicitation of payment) must be both “knowing” and “willful.” While the nature of the conduct targeted by the EKRA means that the requisite mental state is not likely to present a significant challenge for federal prosecutors in many (if not most) cases, there is also a possibility that providers could face civil liability in the event that prosecutors determine criminal charges are unwarranted. All providers will be at risk for facing civil liability under the False Claims Act if they engage in prohibited referral-related transactions involving government health care benefit programs, and physicians could face civil liability under the Stark Law if they engage in prohibited “self-referrals” involving recovery homes, clinical treatment facilities, or laboratories.
5. EKRA Compliance Requires a Multi-Faceted Approach
Given the unique requirements and risks that the EKRA presents for all types of health care providers, compliance requires a targeted and multi-faceted approach. For providers that have existing anti-kickback compliance policies and procedures, these policies and procedures will need to be expanded in order to account for the broad prohibitions contained in the EKRA.
“Despite now being more than two years old, many health care providers (including many recovery homes, clinical treatment facilities, and laboratories) are still unaware of the EKRA and its implications for their businesses. But, compliance needs to be a priority, and those providers that fail to adequately address the EKRA’s prohibitions are putting themselves at risk for federal prosecution.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
Establishing EKRA compliance starts with identifying and understanding the provider’s risks. For example, the risks facing recovery homes, clinical treatment facilities, and laboratories are very different from those facing other types of providers—who are on the opposite side of any potential prohibited transactions. The scope and nature of a provider’s specific operations are important considerations as well, as these factors will determine the lengths to which the provider must go in order to establish and maintain compliance.
As with all aspects of health care compliance, EKRA compliance requires a custom-tailored approach. There is no one-size-fits-all compliance strategy, and there is really no such thing as a “standard” EKRA compliance program. With that said, there are certainly standards that providers need to meet; and, in addition to meeting these standards, providers must comprehensively document their compliance efforts as well.
Ultimately, while the EKRA presents unique compliance challenges for health care providers, these challenges can be overcome. The key is to be proactive in addressing the statute’s prohibitions, and to ensure that your practice or facility has the documentation on hand to prove compliance when necessary.