Kusserow on Compliance: New anti-kickback law for clinical labs

– Law creates new compliance risk areas for 2019

– Compensation of sales personnel affected

– Not limited to federal health care programs

For the new year, compliance officers should recall Congress passing into law the Eliminating Kickbacks in Recovery Act of 2018 (EKRA), which became effective October 24, 2018. It applies to Medicare and Medicaid, as well as many commercial health insurance plans. It has the effect of eliminating “safe harbors” used by clinical labs in marketing services. The law was intended to be part of the effort to target the national opioid crisis. It makes it a criminal offense to solicit or receive any remuneration, directly or indirectly, in return for referring a patient or patronage to a recovery home, clinical treatment facility or clinical laboratory; or to offer or pay a kickback to “induce” a referral of an individual to a recovery home, clinical treatment facility or clinical laboratory, or in exchange for an individual using the services of a recovery home, clinical treatment facility or clinical laboratory. Penalties for each violation can include a fine of up to $200,000 and imprisonment of up to 10 years. The law has seven “safe harbors,” some of which are similar to the safe harbors under the federal Anti-Kickback Statute that is generally applicable to Medicare and Medicaid services, however the safe harbor for employees and independent contractors under the law expressly excludes from safe harbor protection any payment made to an employee or independent contractor that is determined or varies by:

  • the number of individuals referred;
  • the number of tests or procedures performed; or
  • the amount billed or received.

The EKRA adds an all payor (public and private) provision that enables the federal government to monitor provider arrangements intended to generate business for any laboratory services, not only those related to individuals in treatment for substance abuse disorders, payable by a federal health care program or commercial health insurer.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2018 Strategic Management Services, LLC. Published with permission.