Summary of the Proposed 'Eliminating Kickbacks in Recovery Act' Law
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Summary of “Eliminating Kickbacks in Recovery Act” of 2018

Posted on Sep 27, 2018 by Jim Peake

As a drug treatment consultant, we must keep abreast of the laws that are being passed and make sure we adhere to them.  Unfortunately, if we don’t pay attention and we break the law it will cost us not only in dollars but possibly our freedom as well.  Our attorneys have summarized the Kickback in the Recovery Act below.  For more detailed information please see the PDF here.

The Eliminating Kickbacks in Recovery Act would (if passed):

  • Make it illegal to provide, or receive, financial kickbacks for referring patients to recovery homes and clinical treatment facilities. These kickbacks are already illegal under Federal health care plans, like Medicare, but there is no federal law to prohibit them in private health insurance plans;
  • Fine anyone found guilty up to $200,000 or 10 years of prison, or both;
  • Establish limited exceptions to enable legitimate cases of patient referral:

 Kickback exceptions are:

‘‘(1) a discount or other reduction in price obtained by a provider of services or other entity under a health care benefit program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity;

‘‘(2) a payment made by an employer to an employee or independent contractor (who has a bona fide employment or contractual relationship with such employer) for employment, if the employee’s payment is not determined by or does not vary by—

‘‘(A) the number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory;

‘‘(B) the number of tests or procedures performed; or

‘‘(C) the amount billed to or received from, in part or in whole, the health care benefit program from the individuals referred to a particular recovery home, clinical treatment facility, or laboratory;

‘‘(3) a discount in the price of an applicable drug of a manufacturer that is furnished to an applicable beneficiary under the Medicare coverage gap discount program under section 1860D–14A(g) of the Social Security Act (42 U.S.C. 1395w–114a(g));

‘‘(4) a payment made by a principal to an agent as compensation for the services of the agent under a personal services and management contract that meets the requirements of section 1001.952(d) of title 42, Code of Federal Regulations, as in effect on the date of enactment of this section;

‘‘(5) a waiver or discount (as defined in section 1001.952(h)(5) of title 42, Code of Federal Regulations, or any successor regulation) of any coinsurance or copayment by a health care benefit program if—

  • ‘‘(A) the waiver or discount is not routinely provided; and
  • ‘‘(B) the waiver or discount is provided in good faith;

‘‘(6) a remuneration described in section 1128B(b)(3)(I) of the Social Security Act (42 U.S.C. 1320a–7b(b)(3)(I));

‘‘(7) a remuneration made pursuant to an alternative payment model (as defined in section 1833(z)(3)(C) of the Social Security Act) or pursuant to a payment arrangement used by a State, health insurance issuer, or group health plan if the Secretary of Health and Human Services has determined that such arrangement is necessary for care coordination or value-based care; or

‘‘(8) any other payment, remuneration, discount, or reduction as determined by the Attorney General, in consultation with the Secretary of Health and Human Services, by regulation.

Continue to follow the proposed law here.

Jim Peake

Jim is an Internet Oldtimer, literally, and he was making a living online before Yahoo and Google were incorporated and even before Al Gore “invented” the Internet. Jim was the catalyst for putting the internet on the front page of every newspaper around the world in one day when he sold the website design and development to IBM for the Kasparov vs. IBM’s Deep Blue chess tournament in 1996. Jim has been in the direct response and advertising industry (printing) since the early 1980’s. Jim’s primary focus is the healthcare and addiction treatment field where he is a management consultant as well as an analytics and digital marketing consultant. - Learn more about Jim Peake, President

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