EKRA: The Bigger Kickback Statute

In the rapidly evolving landscape of healthcare compliance, understanding the Eliminating Kickbacks in Recovery Act (EKRA) is crucial for all stakeholders involved in the recovery community. Passed as part of the SUPPORT for Patients and Communities Act in 2018, EKRA significantly broadens the scope of anti-kickback provisions previously focused primarily on federally funded programs. This guide offers a detailed exploration of EKRA, aiming to illuminate its core principles, operational mandates, and the implications of non-compliance.

What is EKRA?

EKRA (Eliminating Kickbacks in Recovery Act) is a critical piece of legislation aimed at curbing unethical practices within the recovery and treatment sectors of healthcare. By setting forth clear legal standards, EKRA helps ensure that patient care decisions are made based on medical needs rather than improper financial incentives.

Foundations of EKRA

Legislative Background and Rationale

EKRA was established to address the increasing concerns over patient brokering and other corrupt practices in the substance abuse treatment industry. It expands upon previous laws like the Anti-Kickback Statute (AKS), making it illegal to exchange any form of remuneration for patient referrals.

Scope and Coverage

Unlike AKS, which is limited to services paid for by federal healthcare programs, EKRA applies broadly to all healthcare benefit programs, whether public or private. This expansion marks a significant development in the legal landscape, covering a wider array of healthcare services including laboratory testing, clinical treatment services, and recovery homes.

Key Provisions of EKRA

EKRA stipulates that it is a criminal offense to:

• Solicit, receive, offer, or pay any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory.

• The statute also covers the solicitation or receipt of remuneration for inducing a referral of an individual to a particular provider whose services are covered by a health care benefit program.

Interpretation and Compliance

Understanding the Legal Language

The broad language of EKRA leaves room for various interpretations, often confusing healthcare providers about what constitutes a violation. Legal advisories and compliance experts emphasize the importance of understanding the specific nuances and judicial precedents associated with EKRA to avoid inadvertent breaches.

Compliance Strategies

Healthcare entities must develop robust compliance programs that include:

• Regular training sessions for all employees on the specifics of EKRA.

• Implementation of strict internal controls and monitoring mechanisms to detect and prevent unethical practices.

• Consulting with legal experts to ensure all business arrangements comply with EKRA provisions.

Penalties for EKRA Violations

Violating EKRA can result in severe consequences, including hefty fines and imprisonment. Each violation can lead to:

• Fines of up to $200,000.

• Up to ten years in prison per violation.

Prosecution of EKRA Cases

Who Prosecutes EKRA Violations?

EKRA violations are prosecuted by the U.S. Department of Justice (DOJ). The DOJ works in conjunction with local U.S. Attorney's Offices and may involve collaboration with other federal agencies such as the Department of Health and Human Services (HHS) and the Federal Bureau of Investigation (FBI).

Examples of EKRA Prosecutions

Several high-profile cases have emerged since the enactment of EKRA, serving as cautionary tales for healthcare providers. For instance, a Florida-based laboratory faced significant penalties for their involvement in a kickback scheme related to urine testing services for rehabilitation patients. These examples underscore the aggressive enforcement stance taken by federal authorities concerning EKRA violations.

How Does EKRA Differ from the Anti-Kickback Statute

1. Scope of Coverage

• Anti-Kickback Statute (AKS): AKS specifically targets any transactions involving federal healthcare programs like Medicare and Medicaid. Its primary focus is to prevent financial incentives that might influence healthcare decisions regarding services payable by federal healthcare programs.

• Eliminating Kickbacks in Recovery Act (EKRA): EKRA has a broader scope that extends beyond federal healthcare programs. It applies to all health care benefit programs, whether they are federally funded or not. This includes private insurance and affects a wider range of healthcare-related services, including those related to substance abuse treatment and recovery.

2. Specific Services Targeted

• AKS: The statute is generally applicable to any services covered under federal healthcare programs, broadly encompassing a wide range of medical services and treatments.

• EKRA: While also broad, EKRA specifically targets practices related to the substance abuse treatment industry, including recovery homes, clinical treatment facilities, and laboratories. It was enacted partly in response to the opioid crisis and the specific challenges and abuses observed in the recovery sector.

3. Penalties

• AKS: Violations of AKS can result in criminal penalties including fines of up to $100,000 per violation and up to 10 years in prison, alongside civil monetary penalties and possible exclusion from participation in federal healthcare programs.

• EKRA: The penalties under EKRA are severe, with fines of up to $200,000 per violation and up to 10 years in prison.

4. Safe Harbor Provisions

• AKS: AKS includes a set of "safe harbor" provisions that detail specific practices that, if met, protect participants from prosecution under the statute. These safe harbors cover various arrangements like bona fide employment relationships, investment interests, and rental agreements, providing clear compliance pathways for healthcare providers.

• EKRA: EKRA also includes safe harbors, but they are fewer and less developed than those under AKS. EKRA’s safe harbors include discounts passed on to customers, payments to bona fide employees, and other specific situations where remuneration is permitted.

5. Legal Intent

• AKS: AKS requires proof of intent to induce referrals of federal healthcare program business, meaning the government must demonstrate that the kickbacks were intended specifically to influence such referrals.

• EKRA: EKRA requires proof of knowing and willful conduct but does not necessarily require proof of specific intent to influence referrals. This subtle difference can make EKRA easier to enforce from a prosecutorial standpoint.

In summary, while both EKRA and AKS aim to reduce kickbacks and promote integrity in healthcare decision-making, EKRA casts a wider net with its application to private insurance and a specific focus on the substance abuse treatment sector. Its enactment underscores the growing recognition of the need for stringent regulations across all aspects of healthcare, not just those funded by the federal government. How does EKRA differ from the Anti-Kickback Statute?

EKRA Safe Harbors

Yes, EKRA (Eliminating Kickbacks in Recovery Act) includes specific safe harbor provisions that exempt certain activities from its broad prohibitions against kickbacks. These safe harbors are designed to protect legitimate business arrangements that are not intended to induce or reward the referral of patients. Understanding these safe harbors is crucial for healthcare providers and entities to ensure that their practices comply with the law while conducting necessary business operations. Here are the main safe harbors under EKRA:

1. Discounts and Reduced Costs

This safe harbor allows for a discount or other reduction in price to be offered to a client as long as the price reduction is appropriately disclosed and accurately reflected in the costs claimed or charges made by the provider.

2. Bona Fide Employee Relationships

Payments made to bona fide employees or independent contractors that do not vary based on the number of referrals or the amount of business generated are protected under this safe harbor. This means that regular wages, salaries, and payment arrangements that do not incentivize referrals are permissible.

3. Services Not Based on Volume or Value of Referrals

Payments that do not take into account the volume or value of referrals or other business generated between the parties are also covered. This provision is important for service agreements and contractual relationships that might involve multiple business aspects beyond referrals.

4. Discounts Passed on to the Government

If a discount is given and it is required to be passed through to the government or private health plan, then this arrangement would not be considered a kickback under EKRA. This aligns with practices aimed at reducing the cost burden on healthcare programs.

5. Waivers or Discounts for Financial Hardship

This safe harbor allows for waivers of copayments or offering discounts to individuals facing financial hardship, under certain conditions. It is important that these waivers are not used as a part of a referral inducement but genuinely intended to assist those in financial need.

6. Payments That Do Not Involve Federally Funded Healthcare Programs

Since EKRA also applies to services covered under private health plans, this safe harbor specifies that payments related to services not paid by any health care benefit program are not subject to EKRA's restrictions.

These safe harbors provide necessary legal cover for many standard business practices in healthcare, provided they are conducted transparently and without intent to manipulate patient referrals unjustly. Entities engaged in healthcare services, particularly in sectors like substance abuse treatment and recovery, should carefully review these provisions and consider consulting with legal experts to ensure that their business arrangements fully comply with EKRA while effectively serving their operational and patient care goals. Can a compliance program help mitigate risks associated with EKRA?

1. Are there specific record-keeping requirements under EKRA?

2. How should healthcare entities approach third-party marketing agreements under EKRA?

3. What steps can be taken if an EKRA violation is suspected within an organization?

Conclusion

Navigating the complexities of EKRA requires a proactive approach to compliance and a thorough understanding of the legal landscape. Healthcare providers must prioritize ethical practices and robust compliance strategies to mitigate risks and foster an environment of trust and safety in patient care. Being well-informed and vigilant is key to ensuring that your operations