Avoiding Patient Brokering: AKS & Stark Law Guide
Learn about patient brokering and let’s demystify the complex federal laws—like AKS and Stark Law—that govern patient referrals in addiction treatment.
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The “Third Rail” of Healthcare Marketing: Understanding Patient Brokering
As a leader in the addiction treatment field, you operate with a core mission: to help individuals and families find a path to recovery. You provide expert, compassionate care. But to do that, people have to find you. This is where marketing becomes essential.
However, in our industry, the line between ethical marketing and illegal “patient brokering” is not just a line—it’s a “third rail.” Touching it can have devastating legal, financial, and reputational consequences. It’s the single fastest way to destroy your mission and your facility.
You’ve heard the horror stories: call centers auctioning individuals in crisis to the highest bidder, facilities paying kickbacks for referrals, and “marketers” promising a stream of admissions for a “per-head” fee. These unethical, predatory practices are exactly what organizations like the National Association of Addiction Treatment Providers (NAATP) and federal regulators are actively fighting. And as an ethical provider, understanding the rules isn’t just a legal obligation; it’s a core part of your mission. It’s how you protect patients from harm and safeguard your own integrity.
The problem is, these laws—the Anti-Kickback Statute (AKS), Stark Law, EKRA—are a confusing “alphabet soup” of legal jargon. But they don’t have to be. We’re here to give away the secret sauce, to make this complex topic simple and actionable.
Learn the bright red flags of a bad deal and get a clear plan for building a referral network that is 100% compliant, ethical, and sustainable.
Patient Brokering vs. Ethical Marketing: Drawing a Bright, Unmistakable Line
The core of this issue comes down to one simple question: Are you paying for a patient, or for a service? One is a crime; the other is just business.
Let’s make this distinction crystal clear.
What Patient Brokering Actually Is
At its simplest, patient brokering is the act of paying or receiving “anything of value” in exchange for referring a patient to a healthcare provider. It is a “kickback.” It turns a person in need of help into a commodity to be bought and sold. The driving factor is no longer the patient’s best clinical interest, but money. This is the very definition of unethical, predatory behavior, and it is illegal under federal and state laws.
Clear-Cut Example of Patient Brokering: A call center, presenting itself as an unbiased “national helpline,” gets a call from a person with an alcohol use disorder. The call center operator sends this person to your facility because you have agreed to pay the call center $2,000 for every admission they generate.
You are paying for the patient.
This is a kickback.
This is illegal.
What Ethical Marketing Is
Ethical marketing, on the other hand, involves paying for services or access to an audience to promote your facility. You are not paying for the patient; you are paying for the opportunity to communicate your message of hope and healing to people who might need it.
The final decision on which center to choose remains with the individual, based on the information you’ve provided.
Clear-Cut Examples of Ethical Marketing:
- Paying Google for Ads (PPC): You pay Google $25 every time someone clicks on your ad. You are paying for the click—the advertisement—not the patient. Google gets paid whether that person calls you or not, and whether they admit it or not. This is a standard marketing service.
- Paying a Directory for a Listing: You pay Psychology Today or AddictionHelp.com a flat monthly or annual fee for a profile on their website. You are paying for the digital “real estate” and the service of being listed. This is a standard advertising fee.
- Paying a Marketing Agency: You pay an agency a flat monthly retainer of $5,000 for their services, which might include SEO, website management, and content creation. Their fee is for their time and expertise, not the number of admissions you get.
The line is bright: Ethical marketing involves fixed, fair-market-value payments for transparent services. Patient brokering involves variable payments tied directly to the referral or admission of a patient.
Demystifying AKS, Stark, and EKRA
This is the part that makes most providers’ heads spin. But the concepts are simpler than they sound. Let’s break down the major laws you need to know, without the dense legal jargon.
The Anti-Kickback Statute (AKS): The Big One
What it is: The federal Anti-Kickback Statute (AKS) is a criminal law. It makes it a felony to “knowingly and willfully” pay, offer, solicit, or receive “anything of value” to induce or reward referrals for items or services paid for by a federal healthcare program (such as Medicare or Medicaid).
Let’s break down those terms:
- “Knowingly and Willfully”: This means you knew what you were doing was likely wrong. You can’t just play dumb, but it does require criminal intent.
- “Anything of Value”: This is incredibly broad. It’s not just cash. It can be a “consulting fee” for no real work, a free vacation, expensive dinners, “free” rent for a sober living home’s office space, or waiving copays for specific referrers.
- “Federal Healthcare Program”: This is a key distinction. The federal AKS generally applies only when the service is billed to a program such as Medicare or Medicaid. However, as we’ll see, other laws are closing this loophole.
Rehab-Specific Example: Your facility’s marketing person takes the owner of a sober living home to a lavish steak dinner every week and pays them a $500 “consulting fee” each month. In return, that sober living home sends all of its residents who need a higher level of care to your IOP program, which is then billed to Medicaid. This is a classic AKS violation. You are exchanging “value” (dinners, cash) for referrals. The U.S. Office of Inspector General (OIG) actively prosecutes these cases.
What about “Safe Harbors”? The AKS has exceptions, called “safe harbors,” for specific, legitimate business practices (such as payments to a W-2 employee or proper leasing arrangements). These are complex, and you should never assume you fall into one without consulting a healthcare attorney.
The Stark Law (Physician Self-Referral Law)
What it is: The Stark Law is a civil law (meaning the penalties are financial, not criminal jail time). It prohibits physicians from referring Medicare or Medicaid patients for “designated health services” (DHS) to any entity with which the physician (or an immediate family member) has a financial relationship (ownership, investment, or compensation).
Rehab-Specific Example: Dr. Smith is a part-owner of your addiction treatment facility. She also runs her own private medical practice. Under the Stark Law, Dr. Smith is prohibited from referring her private practice patients (who have Medicare) to her own treatment facility for services like PHP or lab tests.
The law assumes this is a conflict of interest—she might refer the patient just to profit, not because it’s clinically necessary. Like the AKS, the Stark Law has many complex exceptions, but the core principle is to prevent physician self-dealing.
EKRA: The Law That Changed the Game
This is the one you really need to know. For years, some unethical providers tried to skirt the AKS by saying, “We only take private insurance, so the federal kickback laws don’t apply to us.” The Eliminating Kickbacks in Recovery Act of 2018 (EKRA) slammed that loophole shut.
What it is: EKRA is a federal criminal law that applies to all payers, including private insurance companies. It makes it illegal to solicit, receive, pay, or offer any kickback for referrals to a recovery home, clinical treatment facility, or laboratory.
This is a game-changer. That call center example we used earlier? Even if the patient has Blue Cross Blue Shield, paying that $2,000 “per-head” fee is now a potential federal crime under EKRA. This law directly targets the “patient brokering” models that were rampant in the private-pay sector. It levels the playing field and holds all providers accountable to the same ethical standard.
Red Flags: How to Spot Unethical Partnerships and “Lead Gen” Deals
This is the “secret sauce” in action.
As an ethical provider, you need to spot a bad deal from a mile away.
Unethical marketers are persuasive, but their models almost always have one of these red flags.
Walk away immediately if you see them.
Red Flag #1: The “Per-Admission” or “Per-Patient” Model
This is the brightest red flag of all. If any company—a call center, a directory, a marketer, or a “helpline”—prices their services based on the number of admissions you get, it is almost certainly an illegal kickback under EKRA. This includes “cost-per-lead” models where the “lead” is a verified, admissible patient. Do not engage. Period.
What to do instead: Only work with marketers, directories, and call centers that charge a flat, fixed fee for their services. You should pay the same amount whether they send you 0 patients or 20 patients. This proves you are paying for their service, not for the patients.
Red Flag #2: Vague “Consulting” or “Marketing” Fees
Be extremely wary of paying a high monthly “consulting” or “marketing” fee to an individual or company that provides no clear, itemized list of services. This is often a way to disguise a kickback. The “consultant” is simply a “patient broker” who has relationships with sober living homes, and the “consulting fee” is just a laundered referral payment.
What to do instead: Demand 100% transparency. Any agency or consultant you hire must provide a clear Statement of Work (SOW) that details exactly what you are paying for. For example: “For $4,000/month, we will provide: 2 blog posts, weekly social media management, technical SEO monitoring, and management of your Google Ads campaign.” This creates a clear paper trail showing you are paying for legitimate services at a fair market value.
Red Flag #3: “Free” Services or Bartering
Be very careful with “bartering” arrangements. For example, a sober living home owner offers to send all of their residents who need clinical care to your IOP program. In exchange, you agree to provide their home with “free” urine testing services or a “free” weekly therapy group led by one of your staff. This is a clear exchange of “value” for referrals and could violate the AKS and EKRA.
What to do instead: If you provide services to a sober living home, you must charge them a fair market rate for those services, just as you would any other client. Keep all financial relationships clean, documented, and transparent.
Red Flag #4: Call Centers That Don’t Represent You
If you hire a third-party call center or answering service, they must answer the phone as a seamless extension of your brand.
If the script is, “Thank you for calling the ‘Addiction Website Name’ line, let me find a center for you,” that’s a red flag.
They are presenting themselves as an independent intermediary, and they are likely shopping that person around.
What to do instead: Your call service must answer with your branding. For example: “Thank you for calling [Your Facility’s Name], how can I help you?” This ensures the patient knows exactly who they are talking to and that you have full transparency and control over the intake process.
Creating a Compliant, High-Impact Referral Network
So, how do you grow your admissions ethically?
You build a network through clinical collaboration and earn your reputation —not by buying patients.
Formalize Your Professional Relationships
The best referrals come from other professionals who trust your clinical work. Invest time in building real, non-transactional relationships with:
- Hospital discharge planners and social workers
- Private practice therapists and psychiatrists
- Physicians and primary care providers
- Professional interventionists
- Attorneys and EAP (Employee Assistance Program) coordinators
How do you build these? Not with kickbacks. You do it by co-hosting free educational events (CEUs) for therapists. You send them your program updates. You ensure you provide a warm, seamless handoff when they refer a patient. You make yourself a valuable clinical resource to them, not a source of cash. This is about building a community of care.
Invest in Your Own Brand (SEO, Content, and Reputation)
The safest, most sustainable, and most powerful way to grow your admissions is to earn them directly. When an individual in crisis finds your website because you wrote a deeply helpful article about Cognitive Behavioral Therapy, or because your Google Business Profile is full of positive reviews, that is a direct, unbrokered, and ethically-earned admission.
This is your ultimate goal.
By investing in your own website, SEO, and content, you are building an asset that serves you for years, free from all legal and ethical entanglements.
Actions You Can Take Today
This is a heavy topic, but you can take immediate steps to ensure your facility is on the right side of the line. Here are 3 actions you can take right now.
- Audit Your Top 3 Referral Sources: Review your admissions data from the last 90 days. Where did your top three non-Google referral sources come from? A call center? A specific marketer? A sober living home? Now, look at your contract with them. Are you paying a flat fee, or is the payment tied to performance (admissions)? If it’s the latter, flag that contract for immediate legal review.
- Review Your Marketing Budget: Open your marketing budget. Can you clearly explain what every single line item is for? If you see a line item for “$5,000 – Consulting” to an entity you don’t recognize, it’s time to ask your marketing director exactly what services that consultant is providing and to see a Statement of Work.
- Call Your Own Admissions Number (Incognito): Use a phone that isn’t yours and call your main admissions number, especially after hours. Who answers? Do they say your facility’s name? Are they professional and helpful? If you are routed to a generic-sounding “helpline,” you have a serious problem that needs to be fixed today.
Navigating the legal landscape of patient referrals isn’t about fear; it’s about integrity. It’s about proving that your mission to provide care comes before all else. By rejecting the “pay-for-patient” model and instead investing in your brand, your reputation, and your clinical relationships, you are not only protecting your facility from immense legal risk but also actively participating in the movement to heal our industry.
At AddictionHelp.com, we are building a platform dedicated to serving providers like you who are committed to this level of integrity.
Are you ready to prove you’re one of them?
Join us in our mission to build the largest platform of passionate and dedicated treatment providers on the planet. It starts by adding your treatment center profile to our directory.
Frequently Asked Questions About Patient Brokering
Is paying a directory like Psychology Today or AddictionHelp.com a kickback?
No. Paying a flat, fixed fee for a listing on a directory is a standard advertising cost. You are paying for the digital “real estate” to list your program, regardless of how many (if any) patients you receive from it. This is not tied to a referral and is a common, ethical marketing practice.
What is the real difference between the Anti-Kickback Statute (AKS) and EKRA?
The simplest distinction is the payer. The federal AKS (Anti-Kickback Statute) traditionally applies to services billed to federal programs like Medicare and Medicaid. EKRA (Eliminating Kickbacks in Recovery Act) is much broader and applies to services billed to all payers, including private, commercial insurance. EKRA effectively closed the loophole that some unethical providers tried to use by only accepting private-pay clients.
Can I pay my in-house marketing employee a bonus based on admissions?
This is an extremely high-risk gray area. A bonus tied directly to the number of admissions (e.g., “$100 for every admit”) looks identical to a kickback to regulators. A safer approach, which must be reviewed by a healthcare attorney, is to base bonuses on overall company performance or metrics not tied to individual patient referrals (e.g., a bonus for improving website conversion rates, or a general bonus based on the facility’s overall profitability and quality of care goals).
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