On October 24, 2018, Congress enacted a new anti-kickback law that applies to many commercial health insurance plans, as well as Medicare and Medicaid.  The law, known as the “Eliminating Kickbacks in Recovery Act of 2018” (the “Law”), was passed as part of the SUPPORT for Patients and Communities Act, which generally targets the national opioid crisis.

PillsMoneyThe Law makes it a criminal offense to do any of the following:

  1. Solicit or receive any remuneration (including any kickback, bribe or rebate), directly or indirectly, in return for referring a patient or patronage to a recovery home, clinical treatment facility or clinical laboratory; or
  2. Offer or pay a kickback to “induce” a referral of an individual to a recovery home, clinical treatment facility or clinical laboratory, or in exchange for an individual using the services of a recovery home, clinical treatment facility or clinical laboratory.

A “Clinical treatment facility” is broadly defined under the Law as essentially any non-hospital licensed facility that provides treatment for substance use.  Penalties for each violation can include a fine of up to $200,000 and imprisonment of up to 10 years.

The Law has seven “safe harbors”, some of which are similar to the safe harbors under the federal Anti-Kickback Statute that is generally applicable to Medicare and Medicaid services.  However, in contrast to the Anti-Kickback Statute, the safe harbor for employees and independent contractors under the Law expressly excludes from safe harbor protection any payment made to an employee or independent contractor that is determined or varies by:  (1) the number of individuals referred to one of the above facilities; (2) the number of tests or procedures performed; or (3) the amount billed to or received from the individual’s health insurance plan.

Although the Anti-Kickback Statute prohibits conduct similar to that prohibited by the Law in the context of Medicare and Medicaid, the Law casts a wider net in the context of referrals to recovery homes, clinical treatment facilities and clinical laboratories, as it applies to many commercial insurance plans.

It remains to be seen whether and how this Law may be narrowed down in application.  The U.S. Attorney General has the authority to issue additional safe harbor regulations under the Law, which could be used to clarify existing safe harbors.  The Law may also be amended by Congress in the future.

In addition to having a significant impact on the clinical laboratory industry, the Law could affect physicians employed or engaged by recovery homes or clinical treatment facilities, or participating in an arrangement directly or indirectly involving referrals to such homes or facilities.

The full text of the Law may be accessed at this link:  Eliminating Kickbacks in Recovery Act of 2018.

If you have any questions about how the Law may apply to your practice, please consult with experienced legal counsel.