EKRA Continues to Cause Confusion for Clinical Labs

The Eliminating Kickbacks in Recovery Act (“EKRA”) is an incredibly broad and incredibly vague criminal statute that continues to create compliance issues for clinical laboratories. Many arrangements between clinical laboratories and other entities that were previously compliant, or which are currently authorized under other federal statutes, may be unlawful under EKRA.

Congress enacted EKRA in 2018 and, throughout its drafting, it was intended to address patient brokering and kickback schemes in addiction treatment and recovery. For example, EKRA was targeted at individuals who received kickbacks for steering patients into sober living and recovery homes. However, shortly before EKRA was passed and with little consideration of the implications, the words “or laboratory” were inserted into the draft such that EKRA now likely applies to all referrals to clinical laboratories, regardless of payor and regardless of whether the testing relates to addiction treatment or recovery.

EKRA broadly prohibits paying, offering, receiving, or soliciting any remuneration in return for referrals to recovery homes, clinical treatment facilities, or laboratories. Further, EKRA is a criminal statute, the penalties for violation of which, up to 10 years in prison and fines up to $200,000, cannot be taken lightly. Like two other major federal healthcare fraud, waste, and abuse laws, the Anti-Kickback Statute and the Physician Self-Referral Law (commonly known as the Stark Law), EKRA contains a few exceptions. However, they are far fewer in number and often narrower than their counterparts in the older statutes.

The Anti-Kickback Statute and the Stark Law each prohibit various arrangements in which remuneration is exchanged for referrals. However, due to the breadth of these laws, the Department of Health and Human Services (“HHS”) has promulgated a number of exceptions or “safe harbors,” conduct that may fall under the law but which will not be subject to sanctions because it is of low risk for fraud, waste, or abuse. HHS has also promulgated extensive regulation and guidance to outline the contours of these laws and inform healthcare providers how to comply with them. Although EKRA gives HHS the authority to promulgate similar guidance and regulations under EKRA, HHS has failed to do so, leaving providers in the dark about what conduct is prohibited, how the law will be enforced, and how to comply. Moreover, as HHS has updated regulations under other statutes, particularly the Anti-Kickback Statute, to allow greater flexibility in arrangements between providers, it has not extended those flexibilities to EKRA.

Perhaps due to the COVID-19 pandemic, there have been few enforcement actions under EKRA and those few enforcement actions have focused on blatant patient-brokering schemes in addiction treatment and recovery. However, the pandemic has also led to an explosion in laboratory testing, referrals for laboratory testing, and arrangements between laboratories and entities that send samples to laboratories, such as COVID-19 collection sites. Many of these referrals and arrangements may implicate EKRA.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding healthcare fraud, waste, and abuse law, including EKRA. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or wapc@wachler.com.