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Another Anti-Kickback Law to be Aware of in Clinical Treatment Facility Deals

Posted in Fraud and Abuse

The impact of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA), enacted in October 2018, as part of  the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT Act),  is now impacting the due diligence for transactions involving certain behavioral health facilities and laboratories.  EKRA was intended to combat the opioid crisis by targeting illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories. Under EKRA, clinical treatment facilities are defined 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.

EKRA makes it a federal crime to knowingly and willfully:

(1) 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

(2) pay or offer 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.

Significantly, EKRA applies to all clinical treatment facilities regardless of the payor, whereas the Federal Anti-Kickback Statute applies only to Federal health care programs. Furthermore, violations of EKRA can result in criminal and/or civil penalties – each violation of EKRA may result in fines up to $200,000 and/or imprisonment up to ten years.

Due to EKRA’s expanded liability for kickbacks, buyers or investors  involved in behavioral health transactions need to fully review a company’s compliance with EKRA.

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