On October 24, 2018, President Trump signed legislation to combat the opioid epidemic called the Substance Use–Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT for Patients and Communities Act). Part of the legislation criminalizes illegal remunerations for referrals to recovery homes, clinical treatment facilities and laboratories (Recovery Kickback Provision found at Section 8122 of the bill and to be codified at U.S.C. §220). In supporting this law, the Department of Health and Human Services emphasized that the federal Anti-Kickback Statute, 42 U.S.C. §1320a-7b(b) (AKS), only applies to federal health care programs and not privately insured patients.
Section 8122 of the SUPPORT for Patients and Communities Act provides as follows:
a) Offense.—Except as provided in subsection (b)[containing exceptions], 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 (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,
shall be fined not more than $200,000, imprisoned not more than 10 years, or both, for each occurrence.
The Recovery Kickback Prohibition includes exceptions, some of which are similar or identical to exceptions or safe harbors under the Federal AKS. These exceptions generally include the following, but it is important to note that there are additional requirements to satisfy the below criteria.
- Certain properly disclosed discounts under a health care benefit program;
- Certain payments to employees and independent contractors;
- Discounts on drugs furnished under the Medicare coverage gap discount program;
- Payments for services that meet the Federal AKS safe harbor for personal services and management contracts;
- Certain coinsurance and copayment waivers and discounts;
- Certain federally qualified health center arrangements that meet the Federal AKS exception;
- Remuneration made pursuant to alternative payment models and certain payment arrangements that the Secretary of HHS determines to be necessary for care coordination or value-based care; or
- other payment, remuneration, discount or reduction as determined by regulation.
Because these exemptions are not identical to the AKS, health care providers should determine whether their conduct is protected under the new law.
For example, the employee exception is much narrower than under the AKS. Under the AKS, an employee who falls under the bona fide employee safe harbor may be able to receive commission-based payments. Here, employees and independent contractors cannot be paid based upon (1) number of individuals referred; (2) number of tests or procedures performed; or (3) the amount billed or received.
This law is another step by the federal government to criminalize conduct not involving federal funds. As discussed at my August 2018 blog post (https://wirskyelawfirm.com/governments-use-of-the-travel-act-to-combat-bribery-in-healthcare-fraud-cases/), the government is using the Travel Act to combat bribery in health care fraud cases. However, because of differences in state commercial bribery statutes, the conduct addressed in Opioids Anti-Kickback Law may not be in violation of the Travel Act or other statutes in every state. This provision, however, covers “health care benefit programs” as used in the Health Care Fraud Statute, 18 U.S.C. §1347, and includes non-government pay patients. Therefore, health care providers and those doing business with them need to remember that not taking government funds is not a shield from the government bringing a bribery, kickback or health care fraud case against them.