PHYSICIANS NEED TO BE AWARE OF NEW CHANGES TO FEDERAL KICKBACK STATUTES IN RECENTLY ENACTED OPIOID LAW

 

            The bipartisan federal opioid law, which was signed on October 24, 2018, contained important new provisions governing payments for patient referrals to recovery homes, clinical treatment facilities, and clinical laboratories. The new requirements were set forth in the Eliminating Kickbacks in Recovery Act of 2018, which was a constituent part of the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“SUPPORT”).

            The new requirements make it a federal crime to pay or to receive payments for referrals of patients to recovery homes, clinical treatment facilities, and clinical laboratories, with violations punishable by fines of up to $200,000 and imprisonment of up to ten years for each occurrence. The new requirements were intended to fill a perceived gap in the Federal Anti-kickback Statute and to address Congress’ concern with “patient brokers” who recruited and referred patients to recovery programs in exchange for kickbacks paid from reimbursements to these facilities from third party payers.

            As with the Federal Anti-kickback Statute, there are several safe harbors, including certain disclosed discounts or reductions provided under a health benefit program, certain payments to bona fide employees and independent contractors, and payments for services that meet the Federal Anti-kickback Statute’s safe harbor for personal services and management.

            There are, however, some very important differences between the new requirements and the Federal Anti-kickback Statute. First, the new requirements apply only to recovery homes, clinical treatment facilities and clinical laboratories, which are defined to exclude facilities owned or controlled by hospitals. Second, the new requirements prohibit payments and receipt of payments for referrals of patients to those facilities that receive remuneration from all health benefit programs, not just federal health care benefit programs. Third, the safe harbor for payments to bona fide employees and independent contractors does not allow productivity-based incentive payments based on the number of tests or procedures performed or the amount billed or received from a health benefit program. It should also be noted that the new anti-kickback requirements apply to patient referrals for all types of medical services, not just for services related to substance abuse treatment.

            Physicians referring patients to recovery homes, clinical treatment facilities, and clinical laboratories, and particularly physicians with ownership interests in these types of facilities, need to be aware of the new requirements and ensure that their referral practices fully comply with the new law.

            For other provisions in the SUPPORT Act of importance to physicians, please see Whatley Kallas’s previous article on the opioid law.

NOTICE:  This information provided in this article constitutes general commentary on the issues discussed herein and is not intended to provide legal advice on any specific matter or to create any attorney-client relationship.