As Eliminating Kickbacks in Recovery Act (“EKRA”) enforcement continues to expand, the United States District Court for the Southern District of California in United States v. Simons offers an early look at how courts may handle the evidentiary and testimonial issues likely to arise in future prosecutions. On May 1, 2026, the Court issued an Order on the parties’ motions in limine (the “Order”) providing practical guidance on the admissibility of charged terminology, the permissible scope of fact and expert testimony and the types of conduct courts may consider relevant in proving—or defending against—alleged EKRA violations.
Background
EKRA imposes criminal liability for soliciting or receiving remuneration in exchange for referrals to recovery homes, clinical treatment facilities or laboratories. As an all-payor statute, EKRA applies broadly to services reimbursable by both federal health care programs and commercial insurers. Further, EKRA extends to any laboratory services, regardless of their relation to substance use disorder treatment. For a more detailed overview of EKRA, please see our previous article.
Analysis
Because judicial interpretation of EKRA remains sparse, the Court’s Order provides useful insight into both the statute’s reach and the admissibility of testimony and evidence in EKRA prosecutions.
Admissibility of Charged Terminology
The Simons Order suggests that courts are unlikely to exclude charged terminology merely because it carries negative connotations. The Court permitted the use of terms such as “body broker” and “kickback,” emphasizing that “kickback” appears in the statutory framework itself and that the defendant repeatedly used the term “body broker” in his own communications. In doing so, the Court signaled that terminology tied directly to the alleged conduct—or to a defendant’s own statements—will generally be admissible so long as its probative value outweighs any potential prejudice.
The Court also admitted evidence obtained directly from the defendant’s iPhone and iCloud account that the defendant allegedly viewed and reproduced articles discussing health care-fraud schemes involving “body brokers” and “kickbacks.” According to the Court, the evidence was relevant to the Government’s theory regarding the defendant’s knowledge and intent. Taken together, these rulings reflect a willingness to permit contextual evidence and terminology that may help explain the alleged referral arrangements at issue.
Distinguishing Fact and Expert Testimony
The Order also underscores the importance of maintaining clear distinctions between fact and expert testimony in EKRA prosecutions.
The Court permitted expert testimony from an FBI agent concerning common practices within the substance use disorder treatment industry, including the alleged payment of kickbacks for patient referrals. The Court reasoned that such modus operandi testimony would help the jury determine if the defendant’s conduct was routine or intended to conceal unlawful activity, including whether the defendant entered into facially valid flat-rate marketing and consulting services agreements with co-conspirators, when in fact the payments were contingent on a separate verbal agreement requiring a minimum number of referred patients based on the value of their insurance coverage. The Court, citing longstanding precedent for permitting government agents to testify as to the general practices of criminals, found the testimony sufficiently reliable because it was grounded in the agent’s extensive training and experience and did not address the ultimate factual disputes in the case. Importantly, the Court noted that the witness was not the case agent and would not offer opinions regarding the defendant’s specific conduct, thereby minimizing concerns associated with dual fact-and-expert testimony.
By contrast, the Court barred an alleged co-conspirator from testifying about his personal interpretation of EKRA. The Court reasoned that fact witnesses may testify about their observations and interactions but may not offer legal conclusions regarding the meaning or application of the statute. Together, these rulings suggest that courts may permit generalized testimony concerning industry practices while carefully policing attempts by lay witnesses to interpret the law or opine on legal compliance.
Broad Relevance Standards in EKRA Prosecutions
Several of the Court’s rulings reflect a broad view of relevance in EKRA prosecutions.
For example, the Court admitted text-message exchanges between the defendant and an alleged co-conspirator even though the facility ultimately declined to admit the patient discussed in the messages. The Court concluded that whether the patient was ultimately accepted was immaterial because the communications nevertheless shed light on the alleged referral arrangement and business model. Specifically, the Court found the messages relevant and probative of the Government’s theory of the case, as they were offered to demonstrate how the defendant tracked patient referrals based on quotas dependent on insurance policy types and oral agreements with co-conspirators.
Conversely, the Court excluded evidence of the defendant’s allegedly lawful conduct, including evidence that he provided legitimate treatment services and submitted legitimate insurance claims. The Court reasoned that lawful conduct on other occasions does not tend to disprove the charged conduct. These rulings suggest that courts may focus narrowly on the alleged remuneration and referral arrangements at issue rather than the overall legitimacy of a defendant’s broader operations.
Evidentiary Limits on Other-Acts Evidence
The Court also addressed the admissibility of other-acts evidence involving alleged co-conspirators. While the Court permitted certain evidence for impeachment purposes, it declined to allow unrelated acts to serve as substantive evidence of the defendant’s guilt.
This portion of the Order reflects the Court’s effort to balance probative value against the risk of unfair prejudice while still permitting the Government substantial latitude in presenting contextual evidence. As EKRA prosecutions continue to develop, these evidentiary rulings may provide useful guidance regarding the scope of admissible testimony and documentary evidence.
Practical Takeaways
Health care providers, clinical laboratories and treatment facilities should remain mindful of several practical implications arising from the Court’s Order:
- Courts may permit charged terminology—such as “body broker” and “kickback”—when the terms are relevant to the alleged conduct and supported by the evidence.
- Evidence of otherwise lawful conduct, including legitimate treatment services and properly submitted insurance claims, may be deemed irrelevant and inadmissible in defending against EKRA allegations.
- Distinctions between fact and expert testimony remain critical. Courts may permit expert testimony concerning industry practices while excluding lay witnesses from offering legal interpretations of EKRA.
- Organizations should continue proactive compliance efforts and monitor ongoing EKRA enforcement actions and judicial interpretations closely.
If you have questions or would like more information about this topic, please contact:
- Alyssa James at (317) 429-3640 or ajames@hallrender.com;
- Erin Drummy at (317) 977-1414 or edrummy@hallrender.com;
- Katherine Schwartz at (317) 977-1432 or kschwartz@hallrender.com;
- Caulin McGraw at (317) 977-1421 or cmcgraw@hallrender.com;
- Kennedy Bunch at (317) 977-1420 or kbunch@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
