EKRA and Treatment Centers: Why Vendor Fees Can Never Follow Admissions

Congress passed the Eliminating Kickbacks in Recovery Act, codified at 18 U.S.C. 220, on October 24, 2018, as subtitle J of title VIII of the SUPPORT for Patients and Communities Act (Pub. L. 115-271). It was aimed squarely at the addiction treatment industry's patient brokering problem: marketers and "body brokers" paid for each person they delivered to a facility or sober home, often with private insurance paying the bills. EKRA closed the gap that the older Anti-Kickback Statute left, because that statute covers only federal health care programs.

For a treatment program, EKRA matters less as a description of what brokers do than as a rule about what you may pay anyone, including your marketing agency, your consultants and your staff. What follows is a plain reading of the statute for compliance readiness, not legal advice. Talk to health care counsel about any arrangement that pays someone in relation to the people you serve.

What exactly does EKRA prohibit?

With respect to services covered by a health care benefit program, it is a crime to knowingly and willfully:

• solicit or receive 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
• pay or offer any remuneration "to induce a referral of an individual" to one of those, or "in exchange for an individual using the services" of one (18 U.S.C. 220(a)).

The penalty is a fine of up to $200,000, imprisonment for up to 10 years, or both, "for each occurrence."

Which programs does it reach?

EKRA 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" (220(e)(2)). That describes nearly every licensed outpatient, IOP, PHP, residential and withdrawal management program. A recovery home is "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" (220(e)(5)). Sober homes are covered whether or not they are certified.

The reach over payers is the key difference from the Anti-Kickback Statute. EKRA applies to services covered by a "health care benefit program," which federal criminal law defines as "any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided" (18 U.S.C. 24(b)). Commercial insurance is included.

How does it differ from the Anti-Kickback Statute?

The Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), makes it a felony to knowingly and willfully offer, pay, solicit or receive remuneration to induce or reward referrals of items or services payable by a federal health care program, with fines up to $100,000 and imprisonment up to 10 years. EKRA borrows its structure but:

• covers private plans, not only Medicare, Medicaid and other federal programs;
• applies only to referrals to recovery homes, clinical treatment facilities and laboratories; and
• carries a higher maximum fine.

The two do not stack for the same conduct: EKRA "shall not apply to conduct that is prohibited under" the Anti-Kickback Statute (220(d)(1)). And EKRA does not occupy the field, so state laws on the same subject remain in force (220(d)(2)). Florida's Patient Brokering Act is the best-known example; see Florida's Patient Brokering Act for providers and their vendors.

Why are the exceptions so narrow?

Section 220(b) lists eight. The ones a treatment program meets most often are:

• Employees and contractors. Payments by an employer to an employee or independent contractor with a bona fide relationship are excepted only "if the employee's payment is not determined by or does not vary by" the number of individuals referred, the number of tests or procedures, or the amount billed to or received from the health care benefit program for the people referred (220(b)(2)). A salaried intake coordinator is one thing; a bonus for each person enrolled is another.
• Personal services and management contracts that meet the Anti-Kickback Statute's safe harbor at 42 CFR 1001.952(d), as in effect when EKRA was enacted (220(b)(4)).
• Properly disclosed discounts, and copay or coinsurance waivers that are not routine and are given in good faith (220(b)(1), (b)(5)).

The statute's message is consistent: compensation that rises and falls with the number of people who come through the door, or with what their insurance pays, is the problem.

What does this mean for the vendors a program pays?

Every vendor contract deserves the same question: does the fee depend on who or how many people are treated, or on what gets billed for them? Arrangements that raise it include:

• Marketing or call-center vendors paid for each caller, lead, intake or enrollment.
• "Consultants" whose fee is a share of revenue or collections from the people they bring in.
• Payments, rent or "scholarships" to sober homes that send residents to your program, or that receive residents from you.
• Staff bonuses tied to enrollment counts or to insurance collected for those referred.

Some states add their own limits. Arizona bars a licensed health care institution from offering or implying an offer of rebate or fee splitting to any person regulated under Title 32 or chapter 17 of Title 36 of its statutes (A.R.S. 36-407(D)). Delaware bars treatment providers from advertising or soliciting within 500 feet of another provider's facility (16 Del. C. 5604(7)). Housing and travel offers raise separate problems, covered in housing and travel offers: California's rule and the federal risk.

How should a program check its own arrangements?

1. List every payment the program makes to anyone outside payroll, and every variable component of payroll.
2. For each, write down what the amount depends on. Hours, a fixed monthly retainer or a deliverable are easier to defend than counts of people or dollars billed.
3. Look at what the program receives, too. EKRA reaches soliciting or receiving remuneration for referrals, so payments from labs or other providers to the program are in scope.
4. Put the policy in writing, train the staff who negotiate contracts, and have counsel review anything that does not fit a clear exception.

Why are our fees flat?

Because the alternative would be indefensible. White Glove Behavioral does compliance work only: state licenses, accreditation readiness, opioid treatment program approval packages, enrollment filings and policy work. Every fee is a published flat price on our pricing page, and none is ever tied to admissions, referrals, census, revenue or outcomes. We do not market treatment, run call centers, operate or recommend sober homes, or connect programs with anyone who does. Our Policy and Procedure Manual ($1,495) can include a referral and marketing compliance policy written to EKRA, the Anti-Kickback Statute and your state's law, as policy readiness for your counsel to review rather than legal advice.