EKRA Affects Marketing Relationships with Labs and Addiction Treatment Businesses

By: Jeff Cohen

For those following the federal legislative developments on the issue of compensating marketing people who market the services of labs and addiction treatment facilities there is a new update to take note of. Congress passed on October 24, 2018 the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act.”  Yes, that’s a real name!  Part of the law is the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”).

The core aspect of EKRA has to do with how to properly compensate marketing personnel who market the services of labs, addiction treatment facilities and recovery homes.   For those of you already familiar with existing federal law pertaining to compensation arrangements (e.g. the bona fide employee exception (the “BFE”) and the personal services arrangement and management contract safe harbor (the “PSA”)), the EKRA provisions will look familiar!  Key aspects of this law (which has to be read together with similar existing laws) include—Continue reading

Healthcare Marketing Lesson: Compound Pharmacy Kickback Scheme

healthcare marketingBy: Jacqueline Bain

Monty Ray Grow was a defensive back on the Florida Gators’ football team from 1990 until 1993. He contracted to play for the Kansas City Chiefs in 1994 and then for the Jacksonville Jaguars in 1995 and 1996. On February 5, 2018, he was convicted by a federal jury in Miami for his chief role in a massive healthcare marketing scheme designed to defraud Tricare.

Tricare is a health benefit program that provides civilian benefits for U.S Armed Forces military personnel, retirees, their dependents, and some military reservists. Tricare is a Department of Defense Program.

In September 2014, Grow entered into an agreement with a compounding pharmacy in Pompano Beach, Florida, wherein the pharmacy would pay Grow’s marketing company a commission equal to fifty percent (50%) of what the pharmacy netted in Tricare reimbursement from Grow’s referral of Tricare beneficiaries to the pharmacy. (Later on, Grow became an employee of the pharmacy.) Grow then used his commission to offer and pay recruiters to convince Tricare beneficiaries to use this pharmacy. Additionally, Grow offered and paid Tricare beneficiaries themselves to use this pharmacy.Continue reading