18 U.S. Code § 220 - Eliminating Kickbacks in Recovery Act
In the healthcare sector, the act of accepting kickbacks for referrals is a form of fraud. For many years, the Anti-Kickback Statute (AKS) has made it a federal crime to accept kickbacks for referrals involving any federally funded healthcare program defined under 42 U.S.C. 1320a–7b.
However, in 2018, the Eliminating Kickbacks in Recovery Act, commonly known as EKRA, greatly expanded the federal government's reach to include private payers, not just federal healthcare programs. This law is now embodied in Title 18 U.S. Code 220.
Congress enacted EKRA to fight patient brokering and recovery profiteering. EKRA prohibits accepting or paying kickbacks for referrals to recovery homes, clinical treatment facilities, or laboratories. It is supposed to help reduce the tide of opioid-related fraud.
Patient brokers will recruit patients and shop them for the highest bidder. Further, they will often defraud patients and offer them bribes.
To fund the kickbacks paid to the brokers, facilities and brokers guide patients to expensive private insurance policies that are usually government subsidized. They could even pay insurance premiums for the length of the treatment.
Similarly, drug treatment urine drug testing is a billion-dollar-a-year business that is very profitable for treatment clinics. Thus, facilities often overly use expensive urine drug testing and obtain massive profits from the insurer.
The EKRA law prohibits any recovery home, clinical treatment facility, or laboratory from paying kickbacks to anybody. The EKRA applies to all laboratories, even if they don't perform substance abuse testing. It also applies to a hospital laboratory that tests only hospital patients.
If you are charged and convicted under this law, you could receive up to 10 years in federal prison. Let's review this federal law in greater detail below.
Background of EKRA
EKRA was enacted in October 2018 as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act.
The main objective of EKRA was to address the opioid crisis in the United States by eliminating financial incentives that might otherwise encourage the overutilization of particular services in the treatment of substance use disorders.
The law was designed to complement the AKS by specifically extending its reach to services paid for by private insurers, not just those funded by federal healthcare programs.
That said, while EKRA originated as a response to the opioid crisis, its language extends to all healthcare goods and services, not only those related to substance use disorders.
This broad scope covers transactions involving private payers and federal healthcare programs, making EKRA much more expansive than AKS.
At the same time, there has been some controversy regarding the bill's language and how it is interpreted, leaving room for skilled federal criminal defense attorneys to challenge certain aspects of the law in the courts.
What Does the Law Say?
In legal terms, EKRA, defined under 18 U.S.C. 220, addresses the crime of illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories.”
Specifically, EKRA makes it a criminal offense to solicit, receive, pay, or offer “any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or kind, for referring a patient to a recovery home, clinical treatment facility, or laboratory.”
The law covers any remuneration intended to induce referrals to recovery homes, clinical treatment facilities, or laboratories. This includes not just monetary payments but also non-monetary items of value.
What Are the Exceptions to the Rule?
18 U.S.C. 220 does provide several exceptions. These include, among other things:
- Certain discounts and price reductions for services obtained under a health care benefit program, provided the discounts are properly disclosed and reflected in the price;
- Payments to employees and independent contractors under specific conditions;
- Discounts of certain drugs that fall under a Medicare gap discount program;
- Certain arrangements and payments made under eligible personal services and management contracts.
These and other qualifying exceptions do not count as illegal kickbacks and are exempt from prosecution under 18 U.S.C. 220.
What Are the Related Federal Crimes?
18 U.S. Code Chapter 11, bribery, graft, and conflicts of interest have numerous federal statutes that are related to 18 U.S. Code 220 illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories, including the following:
- 18 U.S.C. 201 - bribery of public officials and witnesses;
- 18 U.S.C. 202 - definitions;
- 18 U.S.C. 203 - compensation to members of Congress;
- 18 U.S.C. 204 - practice in United States Court of federal claims;
- 18 U.S.C. 205 - activities of officers and employees in claims;
- 18 U.S.C. 206 - exemption of retired officers of the services;
- 18 U.S.C. 207 - restrictions on former officers, elected officials;
- 18 U.S.C. 208 - acts affecting a personal financial interest;
- 18 U.S.C. 209 - salary of government officials and employees;
- 18 U.S.C. 210 - offer to procure appointive public office;
- 18 U.S.C. 211 - solicitation to obtain appointive public office;
- 18 U.S.C. 212 - offer of gratuity to financial institution examiner;
- 18 U.S.C. 213 - acceptance of gratuity by the financial examiner;
- 18 U.S.C. 214 - offer for procurement of federal reserve bank loan;
- 18 U.S.C. 215 - receipt of commissions or gifts for procuring loans;
- 18 U.S.C. 216 - penalties and injunctions;
- 18 U.S.C. 217 - acceptance of consideration for farm indebtedness;
- 18 U.S.C. 218 - voiding transactions in violation of chapter;
- 18 U.S.C. 219 - officers acting as agents of foreign principals;
- 18 U.S.C. 224 - bribery in sporting contests;
- 18 U.S.C. 225 - continuing financial crimes enterprise;
- 18 U.S.C. 226 - bribery affecting port security;
- 18 U.S.C. 227 - wrongfully influencing a private entity's employment decisions by a member of Congress or executive branch employee.
What are the Penalties for 18 U.S.C. 220?
Violations of EKRA are serious offenses carrying significant penalties upon conviction. If you're convicted of this crime, you face:
- A potential fine of up to $200,000; and
- Imprisonment for up to 10 years.
Note that this penalty applies separately to each violation. Thus, if convicted for five separate kickback incidents, you could face a maximum prison sentence of 50 years.
Defenses for EKRA Violations
Despite the serious nature of the penalties, a skilled federal criminal defense lawyer can employ one or more effective defense strategies if you are accused of violating EKRA. Some common forms of defense used are discussed below.
Perhaps we can argue there was a lack of Intent. To procure a conviction against you, federal prosecutors must prove that you “knowingly and willfully” participated in the kickback.
Your attorney may combat this element by showing that you had no intention of defrauding through an illegal kickback or that you genuinely believed the action was legal.
Perhaps we can argue that there was unwitting involvement. Similarly, your attorney may demonstrate that you were unwittingly involved in the violation or were unaware of the illegal nature of the transaction.
Perhaps we can argue that there are safe harbor provisions. Your attorney may also combat the charges by showing that your conduct fell within one of EKRA's approved exceptions, thereby exempting you from prosecution under the law.
Implications of EKRA
EKRA has far-reaching implications for healthcare providers because its scope extends well beyond the original constraints of the EKS.
Providers should exercise extreme caution in their referral and compensation practices and review existing financial arrangements to ensure compliance.
Additionally, the law impacts other professionals and entities within the healthcare sector, including legal practitioners, consultants, and healthcare investors. These stakeholders must consider EKRA when advising on, structuring, or investing in healthcare transactions.
You can contact us for a case review by phone or through the contact form. Eisner Gorin LLP is located in Los Angeles, California.