On September 15, 2020, Doctor Akikur R. Mohammad, a California resident and drug treatment facility owner, pled guilty before the U.S. District Court of New Jersey for violating the Eliminating Kickbacks in Recovery Act (“EKRA”), one of the country’s first convictions under this statute targeting opioid kickbacks. Enforcement under EKRA can help shed light on questions remaining concerning the statute’s broad definitions, particularly around laboratory services, and its application in light of other federal laws such as the federal anti-kickback statute (“AKS”). Thus far, known enforcement cases under EKRA have focused on opioid and drug treatment cases.
The Eliminating Kickbacks in Recovery Act
Congress enacted EKRA as a part of the bipartisan Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act of 2018 (the “SUPPORT Act”), to respond to the opioid epidemic. EKRA prohibits patient brokering and kickback arrangements involving recovery homes, clinical treatment facilities and clinical laboratories regardless of whether the service was paid by a government payor. However, EKRA goes further in prohibiting kickbacks for all recovery homes, clinical treatment facilities and clinical laboratories without requiring any tie to opioid or other drug treatment.
EKRA goes further in prohibiting kickbacks . . . without requiring any tie to opioid or other drug treatment.
EKRA makes it a federal crime to “knowingly and willfully” at 18 U.S.C. § 220(a):
(1) solicit or receive 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) pay or offer 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.
Penalties for violation of EKRA include a fine of not more than $200,000, imprisonment of not more than ten (10) years, or both, per violation.
Questions remain as to how EKRA interacts with the AKS, particularly for laboratory services, as the AKS has statutory and regulatory safe harbors that do not apply to EKRA-prohibited conduct. As mentioned above, despite EKRA’s intent to address opioid treatment (as part of the SUPPORT Act), EKRA’s statutory language is not limited to services involved in opioid use treatment. For treatment facilities and recovery homes that operate almost wholly in the opioid treatment space, this distinction may be insignificant. However, clinical labs can be quite broad in offered services. To-date, the Department of Justice has not provided regulations or clarity on its understanding of the statute. For this reason, the industry has been closely monitoring prosecutions and convictions utilizing EKRA to better understand the parameters of the law.
Mohammed’s Conviction under EKRA
According to the DOJ’s press release, Dr. Mohammad owned a treatment facility and recovery home in Agoura Hills, California. Several of Dr. Mohammed’s co-conspirators owned and operated a California marketing company. The marketing company organized patient recruitment where Dr. Mohammed paid for patient referrals in exchange for kickbacks in part covered by reimbursements from health care programs (receiving more than $439,000 from such programs). The marketing company’s recruiters would encourage patients to remain at the facility for at least ten days to ensure reimbursement. The marketing company also steered patients to additional facilities to trigger extra payments without regard to medical necessity. Referral payments ranged from $5,000 to $10,000 per patient.
Dr. Mohammed is facing up to five years in prison and a $250,000 fine, according to the Justice Department statement. He and his co-conspirators are scheduled for sentencing on January 20, 2021.
The Importance of this Conviction
The full extent of EKRA’s implications still remain uncertain. Most open questions circulate around its application to clinical laboratories, but Dr. Mohammed’s guilty plea, as well as earlier enforcement in other jurisdictions have focused on opioid and drug treatment. Such experiences suggest DOJ is focused on EKRA’s intent and inclusion in the SUPPORT Act, despite potentially broader statutory language. That said, such focus does not ensure that it will not be used more broadly in the future. This plea does signal an increased focus on EKRA enforcement by DOJ moving forward. Future enforcement may provide further certainty around EKRA’s applicability to non-opioid-related lab and other services, as well as answer other questions about how the AKS safe harbors and EKRA interact.