Client Advisory: EKRA and Its Impact on Behavioral Health and Medical Providers

Introduction

Congress recently passed an omnibus bill (the SUPPORT Act) intended to combat this country’s growing national opioid epidemic. One of the measures included in this legislation was the Eliminating Kickbacks in Recovery Act of 2018 (EKRA). The SUPPORT Act focuses on opioid treatment and recovery but EKRA will have implications for medical laboratories that extend beyond the addiction treatment and recovery industry. Violations of EKRA can expose a person working with a recovery home, clinical treatment facility, or medical laboratory to serious criminal liability. Each violation of EKRA is punishable by a fine of up to $200,000 or a prison sentence of up to 10 years, or both. Here is what affected providers should know in light of the new legislation and the practices and documents these providers will need to re-examine to ensure compliance with this new regulation.

Scope and Language of EKRA

A violation of EKRA occurs when someone “solicits or receives any renumeration . . . in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory[.]”[1] It is also a violation if one: “pays or offers any renumeration . . . to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory[.]”[2] The statute is makes it illegal for recovery homes, clinical treatment facilities, and medical laboratories to pay for referrals to use their services, even if the treatment is covered by a private medical insurance option. Similar to other anti-kickback measures, the statute then contains several exceptions to these enumerated offenses.

EKRA relates to any “services covered by a health care benefit program[.]”[3] This is much broader than other anti-kickback measures in health care legislation that typically are limited to “which payment may be made in whole or in part under a Federal health care program[.]”[4] As written, EKRA extends anti-kickback measures beyond just the scope of Medicare and Medicaid enforcement and applies to payments made in conjunction to claims made to private payors as well.[5] Payments to treatment facilities and labs are less likely to come from Medicare and Medicaid so this code section extends the enforcement thrust of the federal government beyond federal health care dollars. EKRA defines medical laboratory broadly and by this definition extends the reach of EKRA to the vast majority of medical laboratories, even those outside of substance abuse treatment and recovery.

This is notable as it extends the reach of EKRA beyond the general thrust and legislative intent of the SUPPORT Act; entities engaged in recovery, rehabilitation, or substance abuse services, and impacts the behavior of general medical laboratories.[6] The broad way EKRA was drafted may subject the law to future judicial challenge and scrutiny. At this point, health care providers who fall under EKRA, and their attorneys, should be on the lookout for future EKRA interpretation and regulations from the Attorney General that will explain the enforcement future of this broad legislation.[7] Even though this legislation was part of a broader measure that was not targeted at medical laboratories, laboratory administrators need to be aware of EKRA and make sure that their practices are complying with its provisions.

The Relationship Between EKRA and the AKS

Because both measures deal with paying for the referral of medical services, there is overlap between the EKRA and the Anti-Kickback Statute (AKS). Congress was aware of this overlap and even contemplated some of it in the drafting of the EKRA. The EKRA says that, “[t]his section shall not apply to conduct that is prohibited under [the AKS].”[8] This means that any improper kickbacks already falling under the prohibitions of the AKS do not fall under the provisions of the EKRA.

However, the provisions of the AKS and EKRA do not protect conduct from punishment under EKRA if that conduct is otherwise excepted by, or falls outside the scope of, the AKS. While some of the exceptions in EKRA reference exceptions in the AKS, it is not a wholesale inclusion or shelter. This means that EKRA can still address conduct if that conduct falls outside the scope of the AKS, or if that conduct falls under the AKS but is protected by one of the AKS safe harbors. This will require recovery homes, clinical treatment facilities, and medical laboratories to complete two separate analyses; one to ensure compliance with the AKS, and the other to ensure compliance with EKRA.

Actions Affected Medical Service Providers Should Take

Recovery homes, treatment facilities, and medical laboratories need to take proactive measures to ensure that they are complying with the new provisions of EKRA. If a recovery home, treatment facility, or medical laboratory is paying any party for referring business to their service, they should cease such practice immediately, and have the practice reviewed by an attorney. These facilities should be particularly skeptical of their old marketing and sales contracts as they are the most likely to contain provisions for compensation for the number of referrals generated. Such provisions may be in violation of EKRA and an attorney should review them to ensure compliance. An attorney should review all referral source arrangements where a recovery home, treatment facility, or medical laboratory is a party to ensure compliance with EKRA.

Should you or your facility have a need to your contracts evaluated for compliance with EKRA, or have questions about compliance with this new legislation, please contact Peter Mellette, Harrison Gibbs, or Scott Daisley at Mellette PC.

This client advisory is for general educational purposes only. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.

[1] 18 U.S.C.A. § 220(a)(1).

[2] 18 U.S.C.A. § 220(a)(2). 18 U.S.C.A. § 220(e)(5) defines a “recovery home” as “a shared living environment that is, or purports to be, free from alcohol and illicit drug use and centered on peer support and connection to services that promote sustained recovery from substance abuse disorders. 18 U.S.C.A. § 220(e)(2) defines a “clinical treatment facility” as “a medical setting, other than a hospital, that provides detoxification, risk reduction, outpatient treatment and care, residential treatment, or rehabilitation for substance use, pursuant to licensure or certification under State law.” See 18 U.S.C.A. § 220(e)(4) and 42 U.S.C.A. § 263a(a). 42 U.S.C.A. § 263a(a) defines a “laboratory” or a “clinical laboratory” as “a facility for the biological, microbiological, serological, chemical, immune-hematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings.

[3] 18 U.S.C.A. § 220(a).

[4] See for example 42 U.S.C.A. § 1320a-7b(b).

[5] See 18 U.S.C.A § 220(a).

[6] Reese N. Benkoff and Dustin T. Wachler, EKRA: Enactment and Implications of the SUPPORT Act’s New All-Payor Federal Antikickback Law, American Bar Association (Mar. 20, 2019), available at https://www.americanbar.org/groups/health_law/publications/aba_health_esource/2018-2019/march/ekra/.

[7] Id. and James Junger, A Seismic Shift for Providers: The Eliminating Kickbacks in Recovery Act, State Bar of Wisconsin (Feb. 2019), available at https://www.wisbar.org/NewsPublications/InsideTrack/Pages/Article.aspx?Volume=11&Issue=2&ArticleID=26813.

[8] 18 U.S.C.A. § 220(d)(1).