18 U.S.C. § 220 | Illegal Remunerations for Referrals

18 U.S. Code § 220 - Illegal Remunerations for Referrals

Let's review 18 U.S. Code 220, illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories law, to eliminate kickbacks in the Recovery Act.

The Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. 220, prohibits the payment of remuneration in exchange for referring a patient to a recovery home, clinical treatment facility, or laboratory.

18 U.S. Code 220 prohibits the payment of remuneration in exchange for referring a patient.

The EKRA is based on the Anti-Kickback Statute (AKS) that applies only to federally funded health insurance programs, such as Medicare and Medicaid. However, EKRA broadly applies to any health care benefit program. A common issue with EKRA is how it applies to employee compensation, as the provisions are ambiguous.

18 U.S.C. 220 says, “(a) Except as provided, whoever, with respect to services covered by a health care benefit program, in or affecting interstate or foreign commerce, knowingly and willfully—

(1) solicits or receives 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) pays or offers any remuneration 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, shall be fined not more than $200,000, imprisoned not more than ten years, or both for each occurrence.”

Eliminating Kickbacks in Recovery Act

There are some essential facts that you should know about the Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. 220, such as the following:

• In healthcare, accepting kickbacks for referrals is a form of fraud.
• The Anti-Kickback Statute (AKS) makes it a crime to accept kickbacks for referrals related to federally funded healthcare programs defined under 42 U.S.C. 1320a–7b.
• In 2018, the Eliminating Kickbacks in Recovery Act (EKRA) expanded the law to include private payers (Title 18 U.S. Code 220).
• Congress enacted the EKRA to fight patient brokering and profiteering and to reduce the trend of opioid-related fraud.
• The EKRA prohibits kickbacks for referrals to recovery homes, clinical treatment facilities, or laboratories.
• The law covers any remuneration intended to encourage referrals, not just monetary payments but also non-monetary value items.
• The law impacts other professionals within the healthcare sector, such as legal practitioners, consultants, and healthcare investors.

What is the History of the EKRA?

In October 2018, the EKRA was enacted as part of the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT).”

It was a bipartisan effort to deal with the opioid and substance misuse epidemic in the United States. The law has crucial provisions to standardize the delivery of addiction medicine, expand access to high-quality care, and address the severe impact of the epidemic by increasing the workforce.

Simply put, the main objective of EKRA was to address the opioid crisis by eliminating financial incentives encouraging the overuse of some services in the treatment of substance use disorders.

It is specifically designed to complement the Anti-Kickback Statute (AKS) by extending its reach to services paid for by private insurers instead of just those funded by federal healthcare programs.

The statutory language within the EKRA extends to all healthcare goods and services, not only those related to substance use disorders. In other words, the EKRA is much broader than the AKS, but some of the language in the bill is controversial and often challenged by experienced defense lawyers in court.

As noted, the law covers any remuneration intended to encourage 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?

The language within Section 220(b) contains several exceptions. In other words, they do not count as illegal kickbacks and are exempt from prosecution. These include, but are not limited to, the following:

Some discounts and price reductions for services under a health care benefit program, provided they are reflected in the price.
Some payments to employees and independent contractors.
Discounts of some drugs under a Medicare gap discount program.
Some payments that are made under eligible management contracts.
A remuneration described in section 1128B(b)(3)(I) of the Social Security Act (42 U.S.C. 1320a–7b(b)(3)(I)).

What Are Related Federal Offenses?

18 U.S. Code Chapter 11, bribery, graft, and conflicts of interest have several federal laws related to 18 U.S. Code 220 illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories, such as 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, officers, and others in matters affecting the Government,
18 U.S.C. 204 - Practice in United States Court of Federal Claims or the United States Court of Appeals for the Federal Circuit by Members of Congress,
18 U.S.C. 205 - Activities of officers and employees in claims against and other matters affecting the Government,
18 U.S.C. 206 - Exemption of retired officers of the uniformed services,
18 U.S.C. 207 - Restrictions on former officers, employees, and elected officials of the executive and legislative branches,
18 U.S.C. 208 - Acts affecting a personal financial interest,
18 U.S.C. 209 - Salary of Government officials and employees payable only by the United States,
18 U.S.C. 210 - Offer to procure appointive public office,
18 U.S.C. 211 - Acceptance or solicitation to obtain appointive public office,
18 U.S.C. 212 - Offer of loan or gratuity to financial institution examiner,
18 U.S.C. 213 - Acceptance of loan or gratuity by financial institution examiner,
18 U.S.C. 214 - Offer for procurement of Federal Reserve bank loan and discount of commercial paper,
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 adjustment of farm indebtedness,
18 U.S.C. 218 - Voiding transactions in violation of chapter; recovery by the United States,
18 U.S.C. 219 - Officers and employees 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 18 U.S.C. 220 Penalties?

Suppose you are convicted of violating the EKRA (section 220). In that case, you are facing the following penalties:

A fine of up to $200,000, and
Imprisonment for up to 10 years,
Penalties apply to each violation.

What are the Defenses?

As discussed below, an experienced federal criminal defense attorney could use different strategies to challenge allegations that you violated the EKRA.

Maybe we can argue there was a lack of Intent. Federal prosecutors must prove that you knowingly and willfully participated in the kickback. Perhaps we can confirm you had no intention of defrauding through an illegal kickback. Maybe you had a reasonable belief the payment was a legal transaction.

Maybe we can argue that you were unknowingly involved in the violation or did not know the illegal nature of the transaction. Perhaps we can say that there are safe harbor provisions. Maybe we can argue that your conduct fell within one of EKRA's approved exceptions, exempting you from prosecution under the law.

Healthcare providers must use caution in referral and compensation practices and review their financial arrangements to ensure compliance. Contact us for a free case evaluation. The Hedding Law Firm is based in Los Angeles, California.

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