The state legislature recently passed a law making patient brokering a felony. If you haven’t heard of patient brokering, well, you’re in the same boat I was in until recently. Read on to learn more.
What’s patient brokering? Patient brokering, sometimes called body brokering, is an issue in the substance use disorder treatment industry. It happens when one person (the broker) refers another person (the patient) to a substance use disorder treatment facility in exchange for a referral fee. These fees are often described as kickbacks.
This practice may seem similar to accepted practices in other industries. For example, insurance navigators help people choose between insurance plans, and services like A Place for Mom are paid referral fees for matching older adults with senior living communities. These referral fees have spawned some controversy, as the Washington Post reports here, but they do not appear to be unlawful.
Whatever the status of those other practices, in the substance use disorder treatment industry, patient brokering is generally recognized as having become unethical and predatory. Brokers may loiter outside 12 step meetings or methadone clinics offering cigarettes, gift cards, or cash to those willing to be brokered into a residential facility. Brokers may even provide drugs to recovering drug users in order to induce a relapse, then monetize the relapse by referring the patient to a treatment facility. In some cases, brokers refer the same patient to facility after facility, encouraging relapses in between. You can read about one parent’s experience with patient brokers here. An academic paper based on structured stakeholder interviews regarding patient brokering is here.
The fundamental problem is a conflict of interest. Patient brokers are compensated only once for recovery, but may be paid over and over again for relapse and continued addiction.
Is patient brokering legal? No. Federal law has prohibited it since the enactment of EKRA, the Eliminating Kickbacks in Recovery Act of 2018. EKRA is codified at 18 U.S.C. § 220. It makes it a felony, punishable by up to 10 years in prison, to “solicit[] or receive[] any remuneration . . . in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory.” Many states also have laws prohibiting patient brokering.
What did the General Assembly do? Last year, the General Assembly passed S.L. 2023-141, which enacted G.S. 90-113.152. That statute makes it a Class G felony to pay or receive “anything of value” to “induce the referral of,” or in exchange for the referral of, a patient “to or from a treatment provider or laboratory.”
Comments. There do not appear to have been many prosecutions under the federal patient brokering law. There may be several reasons for this. The law may not be widely known. The victims of patient brokering may not see themselves as victims or may be reluctant to report patient brokering activity. Even when it is reported, the prosecution of patient brokering may be challenging because individuals experiencing or recovering from substance use disorder may not be seen as credible witnesses.
Turning to the new state law, the text of the provision may create some uncertainties. For example, suppose a treatment center contracts with a marketing company to design and place billboards advertising the center. Has the marketing company received a thing of value in exchange for making a referral to the center? Putting up a billboard may not seem like a referral in that way that, for example, a primary care provider refers a patient to a specialist, but the statutory definition of “referral” includes “inform[ing] a patient by any means of the name, address, or other identifying information for a licensed treatment provider or recovery residence.” G.S. 90-113.150(3). So there may be an argument that putting up a billboard – or deploying any other marketing tool – is a referral under the law.
Another question is whether a patient who knowingly participates in a patient brokering arrangement is liable under the law. Under at least some circumstances, the answer may be yes, either pursuant to G.S. 90-113.152(a)(3) (which makes it a violation to “[k]nowingly solicit or receive anything of value . . . in return for the acceptance . . . of treatment”), or pursuant to G.S. 90-113.152(a)(4) (which makes it a violation to knowingly aid and abet patient brokering).
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