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The Short Answer for Behavioral Health Operators
Patient brokering is a federal crime under the Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. § 220, prosecuted by the U.S. Department of Justice, and a separate felony under state statutes like Florida’s Patient Brokering Act, Fla. Stat. § 817.505, enforced by the Florida Office of the State Attorney and the Florida Attorney General. It covers paying, offering, soliciting, or receiving anything of value in exchange for a patient referral to a treatment center, sober home, or clinical laboratory.
Operators get tripped up because most brokering deals do not look like brokering on paper. They look like marketing contracts. W-2 salaries with a bonus structure. Per-lead fees to a call center. A friendly stipend to a sober home that keeps sending you admits.
The 2025 National Health Care Fraud Takedown put the operator-side risk in plain view. DOJ announced criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes involving over $14.6 billion in intended loss. The government seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets as part of the coordinated enforcement efforts. That is not a marketing problem. That is an operator problem.
What EKRA Actually Prohibits (And Why Your Marketing Contract Is Not a Shield)
Congress passed EKRA in October 2018 as part of the SUPPORT Act. Lawmakers took direct aim at behavioral health. EKRA is codified at 18 U.S.C. § 220 as an all-payor statute.
That is the piece founders miss. Unlike the Anti-Kickback Statute (AKS), EKRA applies to any health care benefit program (including private insurance), not only federal health plans. Your cash-pay or commercial-payer facility is not exempt. The same DOJ prosecutors and HHS-OIG agents who chase Medicare fraud will follow the commercial dollars too.
Penalties are not trivial. Under 18 U.S.C. § 220, a violator can be fined up to $200,000, imprisoned up to 10 years, or both, for each occurrence. Per occurrence. Not per case. If a call center sent you 40 admits over a quarter and DOJ can prove intent to induce, do the math on the exposure.
The most common structure a founder brings to me that fails an EKRA review is the percentage-of-collections marketing agreement. On July 11, 2025, the Ninth Circuit issued the first appellate decision interpreting EKRA in United States v. Schena. The Ninth Circuit Court of Appeals affirmed the criminal conviction of laboratory operator Mark Schena for violations of the Eliminating Kickbacks in Recovery Act, 18 U.S.C. § 220 (EKRA) based on compensation paid to marketers who sold testing on behalf of Schena’s laboratory. Schena was sentenced to 96 months in prison and ordered to pay more than $24 million in restitution. Prosecutors now have appellate authority in their pocket.
The Schena court’s reasoning matters for anyone running an outreach team. The Ninth Circuit held that EKRA “covers marketing intermediaries who interface with those who do the referrals” and does not limit liability to only those who directly refer patients. The court then drew the line founders must understand: percentage-based compensation isn’t per se illegal. It becomes unlawful when it crosses into undue influence or deception, such as misleading physicians or taking control over their clinical decision-making. The paper does not save you. Intent does.
Florida's Patient Brokering Act: The State-Level Trap
If you operate a treatment center in Florida, EKRA is only half your problem. Fla. Stat. § 817.505, the Patient Brokering Act, makes it a felony to offer or pay a commission, bonus, rebate, kickback, or split-fee to induce a patient referral. The Florida Department of Children and Families licenses these programs, and DCF referrals to law enforcement often ride alongside criminal charges.
Enforcement in Palm Beach County has been aggressive since the Sober Homes Task Force stood up. In 2016, a Palm Beach County sober homes task force was established to address the growing problem of unscrupulous addiction recovery and treatment/drug rehab home operators, led by Fifteenth Circuit State Attorney Dave Aronberg. As of August 2022, the State Attorney reported 121 arrests, 107 convictions, 2 guilty verdicts and 2 not guilty verdicts. Owners. Marketers. Sober home operators. Physicians. Lab reps. The task force does not care about your org chart.
The statute reaches beyond cash. In one Delray-area case, investigators alleged sober home operators managing Treatment Alternatives were paid $200,000 in kickbacks for referring patients to a Lake Park laboratory, Coastal Laboratory, LLC, for urine testing. Task Force Investigator Mark Berry described the scheme this way: “They were sending the cups to the lab and the lab was generally doing two tests on every cup so they could bill twice. They were billing initially at rates of $2,000 to $3,000 per test and then remitting 30 to 50-percent of the proceeds they got back to treatment centers.”
That covers the free rent you gave the sober home. The gas cards. The flights. The “scholarships” you paid on a patient’s insurance premium. All of it. Aronberg framed the exposure bluntly: “you have treatment centers in cahoots with the labs sending urine to the labs and the labs giving a kickback to the treatment centers and everybody’s making money on the backs of individuals with a substance abuse disorder.” That is the arrangement the task force built its reputation prosecuting.
What Federal and State Enforcement Look Like Right Now
DOJ is not slowing down on behavioral health. Neither are its partner agencies at HHS-OIG, the FBI, the DEA, and the CMS Center for Program Integrity. The scale of the 2025 takedown is the tell.
The action resulted in criminal charges against 324 defendants, with intended losses exceeding $14.6 billion, making it the largest health care fraud Takedown in U.S. Department of Justice history and doubling the previous record of $6 billion. FBI Director Kash Patel said the announcement demonstrated the Bureau’s commitment to pursuing those who exploit the system for personal gain. Attorney General Pamela Bondi framed it this way: “This record-setting Health Care Fraud Takedown delivers justice to criminal actors who prey upon our most vulnerable citizens and steal from hardworking American taxpayers.” That framing changes how juries decide.
Arizona is now the epicenter. In Arizona, a sweeping $2.8 billion Medicaid fraud scheme promised addiction treatment and recovery. Instead, it exploited thousands of vulnerable people, many of them Native American. AHCCCS has suspended 364 providers over credible allegations of behavioral health fraud. The agency has implemented more than 20 new oversight measures, suspended hundreds of providers, and provided direct support to more than 11,000 individuals since the scheme was uncovered in May 2023. Behind the numbers is a state Medicaid agency that failed for years before the crackdown landed.
How Operators Actually Stay Clean
What I tell every founder and PE-backed buyer who walks into a diligence conversation: your compliance program starts at the marketing contract, not at the chart. Here is what an operator-side review actually looks at.
- Compensation structure. W-2 employees, fixed salary, no commission tied to admissions or revenue. EKRA has fewer safe harbors than the AKS and notably does not protect volume-based or commission-based compensation for employees or contractors, even if they are W-2 employees. If your outreach team is paid per admit, you have an EKRA problem regardless of what your handbook says.
- Sober home relationships. No rent subsidies. No shared staff. No “we help each other out.” Written referral policies that document clinical fit, not financial exchange.
- Call center and lead vendors. Flat monthly fee for services rendered, benchmarked to fair market value, with deliverables that are not tied to patient volume or payer mix. Get the FMV opinion in writing.
- Marketing agreements with third parties. No percentage of collections. No per-lead pricing that varies with conversion. Written scope, hours logged, deliverables documented. Marketing arrangements must preserve provider independence. If marketers are effectively directing referrals, the arrangement likely violates EKRA.
- Ownership and referral overlap. If your treatment center and your lab share owners, DOJ, HHS-OIG, and state Medicaid Fraud Control Units scrutinize that structure hard. Papered properly, it can work. Papered lazily, it becomes exhibit A.
Every operator I have advised who received a subpoena had one thing in common. They knew the arrangement was aggressive. Someone on the team, usually the CFO or the outreach director, had already flagged it. The founder chose census over caution. That is the moment a compliance program either exists or it does not.
Frequently asked questions
Does EKRA apply to my facility if we do not bill Medicare or Medicaid?
Yes. This is the single biggest misconception operators bring to a compliance review. EKRA is an all-payor statute. Unlike the Anti-Kickback Statute, EKRA applies to any health care benefit program, including private insurance and cash-pay patients, not only federal health plans. Commercial-payer PHPs and IOPs are not exempt. DOJ, HHS-OIG, and the FBI can all investigate.
Can I pay my outreach team a commission if they are W-2 employees?
Be very careful. EKRA’s employee safe harbor is narrower than the AKS equivalent and does not protect volume-based or commission-based compensation for employees or contractors, even W-2 employees. In United States v. Schena, the Ninth Circuit affirmed that payments varying by the number of tests or procedures performed fall outside the safe harbor. Percentage-of-collections comp and per-admit bonuses have been the subject of federal EKRA prosecutions. The safer path is fixed salary with bonuses tied to activity metrics that are not volume-of-referrals or revenue-generated. Get a healthcare attorney to review the comp plan before rollout, not after a subpoena.
What penalties do operators actually face for patient brokering?
Federal EKRA violations under 18 U.S.C. § 220 carry up to 10 years in prison and fines up to $200,000 per occurrence, prosecuted by DOJ. Under Florida’s Patient Brokering Act, Fla. Stat. § 817.505, violators may be convicted of a first, second, or third-degree felony, prosecuted by the local State Attorney or the Florida Attorney General. Real cases show the exposure: Palm Beach County’s Sober Homes Task Force reported 121 arrests and more than 100 convictions as of August 2022, and DOJ’s 2025 National Health Care Fraud Takedown charged 324 defendants in schemes involving over $14.6 billion in intended loss, with over $245 million in cash and assets seized.
Did the Ninth Circuit’s Schena decision make percentage-based marketing compensation illegal?
No, but it narrowed the safe zone considerably. In United States v. Schena (July 11, 2025), the Ninth Circuit held that EKRA covers payments made to marketing intermediaries who interface with referral sources, not only those who interact with patients directly. On compensation structure, the court held that a percentage-based marketing arrangement, without more, does not constitute a per se violation of EKRA. Such arrangements become unlawful when accompanied by undue influence, such as directing marketers to mislead physicians about the necessity or effectiveness of services. Operators inside the Ninth Circuit should have counsel reexamine every outside marketing contract against Schena, and operators everywhere else should assume other circuits will look to Schena for guidance.
References
- U.S. Department of Justice, National Health Care Fraud Takedown Results in 324 Defendants Charged in Connection with Over $14.6 Billion in Alleged Fraud (June 30, 2025)
- HHS Office of Inspector General, 2025 National Health Care Fraud Takedown
- 18 U.S.C. § 220, Eliminating Kickbacks in Recovery Act (EKRA)
- Fla. Stat. § 817.505, Florida Patient Brokering Act
- Epstein Becker Green, Ninth Circuit Applies EKRA to Marketing Intermediaries in Lab Operator’s Allergy Testing Scheme (United States v. Schena analysis)
- Morgan Lewis, Ninth Circuit Ruling Confirms Strength of the Eliminating Kickbacks in Recovery Act (August 2025)
- WPTV, Palm Beach County State Attorney Announces Arrests in Major Drug Treatment Fraud Case
- Arizona Health Care Cost Containment System (AHCCCS), Sober Living Fraud Resources
- AHCCCS Press Release, Reforms in Response to Sober-Living Fraud (May 2024)