One of the largest areas of debate in healthcare regulatory compliance is the Eliminating Kickbacks in Recovery Act (EKRA). Despite the many question marks by healthcare providers around how to comply with EKRA, the statute also carries some of the stiffest penalties for failing to do so. Enacted in 2018, EKRA provides criminal penalties for paying, receiving, or soliciting any remuneration in return for referrals to recovery homes, clinical treatment facilities, or laboratories. Although initially intended to apply only to substance abuse and recovery, EKRA was written so broadly that it applies to all clinical laboratory services, not just in connection with substance abuse and recovery. It is unclear if Congress intended this effect, as the expansion to all lab services was included a mere 6 days before the final version of the law passed. Regardless, a violation of EKRA may be punished by fines up to $200,000, imprisonment of up to 10 years, or both, for each occurrence.
EKRA is often compared to other federal regulatory statutes, such as the Physician Self-Referral Law (commonly called the Stark Law) and the Anti-Kickback Statute (AKS). However, EKRA is written incredibly broadly and may prohibit conduct that might otherwise be permissible under the Stark Law and AKS. The Stark Law and AKS also have volumes of regulations and decades of enforcement, such that it is generally well understood how these statutes function, how government agencies view and enforce them, and how to structure arrangements to comply with them. EKRA, on the other hand, has no regulations and few enforcement actions, often leaving healthcare providers with only the bare text of what is potentially a very broad statute.
Recent enforcement actions are beginning to show that EKRA is likely as broad as it appears. Initially, enforcement actions under EKRA were limited to allegations regarding substance abuse and recovery services, as originally intended. But this summer, the Department of Justice (DOJ) charged a clinical lab with an alleged multi-million-dollar healthcare fraud scheme, which included allegations that the lab violated EKRA by paying for referrals for COVID-19 testing, showing a willingness to enforce the full breadth of EKRA on clinical lab services.
Further, like the Stark Law and AKS, EKRA also provides exceptions. However, they are far fewer in number and often narrower than their counterparts in the older statutes. For example, in certain circumstances, a safe harbor to the AKS has long allowed commission-based payments to employees, including marketers. EKRA turned this on its head for clinical labs because the text of EKRA appears to prohibit any compensation, even to employees, that is based on the volume or value of the referrals. A federal court in Hawaii initially issued a decision that may have continued to allow some commissioned-based payments to lab marketers. However, many commenters at the time noted that the Hawaii case was poorly decided and contradicted much of the established regulatory scheme. DOJ has since unequivocally taken the position that it disagrees with the Hawaii case and will continue to utilize EKRA against commissioned-based payments to lab marketers.
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 the Stark Law, Anti-Kickback Statute, and 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.