October's invoice from the answering vendor reads $14,000: fourteen admits at $1,000 each. The same week, a healthcare law firm's newsletter arrives with EKRA in the subject line. You read it twice and still can't tell whether that invoice is a marketing cost or the thing the newsletter warns about.
This post walks through the brokering laws in plain words: the federal law, the two state laws owners ask about most, what a center may pay for, and what to bring to your lawyer. It's a guide to what to ask, not legal advice. Have your own healthcare counsel review any contract before you sign it.
What brokering means
Brokering is paying for referrals. Someone offers, pays, asks for or takes any reward, in cash or otherwise, for steering a person to a treatment program, a recovery home or a lab.
Cash is the plain case, and the laws reach much further. A bonus per admit, gift cards, a share of what's billed, paid flights and free rent in sober living can all count. The laws grew out of South Florida in the 2010s, where recruiters were paid for each person they moved into a program. Palm Beach County's sober homes task force, formed in 2016, led to dozens of arrests and to new state laws in 2017.
EKRA, the federal law
EKRA became law on October 24, 2018, as part of the SUPPORT Act. Its full name: the Eliminating Kickbacks in Recovery Act. Its citation is 18 U.S.C. §220.
It makes it a federal crime to knowingly and willfully pay, offer, ask for or take any reward for referrals to labs, recovery homes and treatment centers. Paying someone to get a person to use one of them counts too.
Two details matter most to a center. EKRA covers services paid by any health care benefit program, public or private, so it reaches well past Medicare and Medicaid. Fines run as high as $200,000 and prison terms as long as 10 years, for each occurrence.
Who EKRA reaches
EKRA reaches both sides of a deal. The center that pays and the person who takes the money can each be charged. That includes owners and staff, and outsiders too: marketers, directories, answering vendors and recruiters.
The law lists exceptions. The one owners ask about most covers pay for employees and contractors. It applies only when the pay doesn't depend on, or change with, how many people were referred, the tests or procedures done, or the amount billed.
Courts have read that exception strictly. In 2021, a federal court in Hawaii found that a lab's commission plan for a salesperson broke EKRA, even if it might have passed the older federal rule. If your BD rep earns a commission on admits, put that question to counsel first.
The older federal rule
Before EKRA, the Anti-Kickback Statute already barred paying for referrals of care billed to Medicare, Medicaid and other federal programs. It still does. Its safe harbors describe the deals it leaves alone.
EKRA has its own, narrower list of exceptions. An arrangement that fits an Anti-Kickback safe harbor still needs a separate look under EKRA.
Florida's brokering statute
Florida's Patient Brokering Act, §817.505 of the Florida Statutes, is the state law most owners know by name. It bars offering, paying, asking for or taking a commission, bonus, rebate, kickback or bribe, or splitting fees, to steer people to or from health care businesses. It applies whoever pays for the care.
A violation is a felony, and the fine rises with how many people were involved: $50,000 for fewer than 10, $100,000 for 10 to 19, and $500,000 for 20 or more. Florida's 2017 changes also added §397.55, which bars deceptive marketing by licensed substance use programs.
California and other states
California added §11831.6 to its Health & Safety Code through Senate Bill 1228 in 2018. It bars licensed and certified treatment programs in California from giving or taking any reward for a referral. The state can act on a program's license for it.
Other states have their own statutes, and the wording differs from one state to the next. Don't assume the federal law is the whole story: ask counsel which statutes reach each of your locations.
What a center may pay for
The pattern behind these statutes is plain. A price set in advance, one that doesn't move with referrals, is the kind of spending they leave alone. AddictionHelp.com's guide for centers puts the test well: a marketer's bill shouldn't change between a month with no admits and a month with twenty.
Spending that usually fits the pattern:
- Ad spend paid straight to Google, Microsoft or Meta, in your center's own ad accounts.
- A flat monthly fee to an agency or a software company, the same whether the month is slow or busy.
- Salaries for admissions and BD staff, set in advance, with no bonus per admit.
- A directory listing at a flat price, with a number that goes straight to your admissions desk.
- Teaching partners what your center treats and the direct line for admissions.
We price RehabSignal this way on purpose: three monthly plans, $97 up to $297, priced on logins alone, with nothing tied to a lead, a call or an admit. Even so, have counsel read each contract. The details decide the answer.
What a center may not pay for
These are the patterns enforcement cases keep finding:
- A fee per admit, per call or per inquiry to a marketer, a directory or an answering vendor.
- A commission or bonus for staff that rises with admits.
- Gifts, meals, tickets or cash for an interventionist, a therapist or someone at the ER, as thanks for referrals.
- Free rent in sober living, paid flights or other help for a person who picks your program.
- Money to a house manager for each resident sent your way.
- Rewards for alumni who send a friend.
Take any of these to counsel and get answers before you pay the next invoice.
Referral partners without payment
Partners send people when a program fits and the hand-off goes well. Your BD rep keeps partners informed: what you treat, the direct line for admissions and what happened after they called, with the client's signed consent.
None of that pays a partner anything. Track which partner sent each inquiry and admit so you know which relationships need a visit, never to reward anyone. A partner list with visit notes does that job, and so does the simple tracking template in our earlier post.
Alumni referrals
Alumni are often the people a friend listens to first, and many send friends your way. Thank them in person or with a handwritten card. Don't give gift cards, discounts, event perks or anything else of value for a referral: EKRA and the state statutes reach that too.
Red flags in a marketing contract
An admissions worker at a detox asked on r/PPC whether any vendor selling calls could be trusted. An agency worker answered: “If you're looking to just buy calls from a lead vendor, I don't know of any that are both reputable and cost effective in this industry”.
Read every contract for these:
- A price by the admit, the call or the “qualified” inquiry.
- A promised number of admits each month.
- A tracking number the vendor owns, so the vendor decides where your calls ring.
- A payment to anyone who also refers people to you.
- “Consulting” or “bonus” lines that grow in busy months.
Questions to bring to counsel
Book an hour with a healthcare lawyer who knows your state. Bring your marketing contracts, your staff pay plans and the last three invoices from each vendor. Then ask:
- How is each vendor paid, and could the amount ever change with referrals?
- How are admissions and BD staff paid, bonuses included?
- What did partners receive from us this year, and does any of it need to change?
- Who owns our phone numbers and ad accounts?
- Which state statutes reach each of our locations?
Write the answers down and keep them with the contracts. When the next newsletter about EKRA arrives, you'll have answers on paper.
RehabSignal
We write these posts for owners, admissions directors and outreach reps at US treatment centers. The statutes themselves and owners' own forum threads are the sources for this one.
