Navigating the Broad Implications of EKRA in the Substance Abuse and Diagnostic Laboratory Testing Industries

Posted on Fraud Investigation, Health Care Law News July 19, 2022 by Rachel Broughton

The Eliminating Kickbacks in Recovery Act, otherwise known as EKRA, is a fairly new federal law that targets patient brokering and recovery profiteering. EKRA broadly makes it a federal crime for anyone, with respect to services covered by any health care benefit program, to knowingly and willfully:

  • solicit or receive any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly, or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory; or
  • pay or offer any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly, or covertly, in cash or in kind-
    • to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or
    • in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory.

An individual convicted of a single violation of EKRA is subject to a fine of not more than $200,000, an imprisonment term of not more than 10 years, or both, for each occurrence. Additional penalties such as sanctions, licensure revocation, and/or exclusion from participation in governmental healthcare programs may also be imposed.

EKRA is much more broad than the federal Anti-Kickback Statute (“AKS”), which is limited to participants of federal and state healthcare programs. In other words, EKRA applies regardless of whether the payer is a federal or state healthcare program and also applies where private insurers are involved. Additionally, EKRA has less statutory safe harbors and no regulatory safe harbors as opposed to the AKS. Therefore, conduct that was once considered outside of the scope of the AKS, is now prohibited by EKRA.

Although EKRA was enacted in 2018 to combat the opioid epidemic, it not only applies to toxicology labs, but also applies to all diagnostic testing laboratories. Therefore, professionals in the substance abuse industry and diagnostic testing labs in general should carefully examine their relationships with marketers and referral sources to ensure they are in compliance with EKRA and its related laws.

Due to the lack of federal guidance and enforcement surrounding EKRA, professionals in the industry are faced with a great deal of uncertainty as to what conduct could potentially be viewed as a violation of the extremely broad and ambiguous federal law. A common issue related to the interpretation of EKRA is how it relates to commission-based employee compensation. Courts have issued varying opinions on the topic but are nonetheless beginning to provide some clarity as to what types of conduct could be deemed to violate EKRA. There is a great deal of anticipation that the federal government will increasingly use EKRA as one of its enforcement tools to crack down on recent COVID-19 fraud as well.

Regardless of whether you are in the substance abuse space or diagnostic laboratory space, it is important to closely evaluate your marketing agreements, employee arrangements and incentive or performance-based compensation plans for potential EKRA concerns. The highly experienced attorneys at Nicholson & Eastin, LLP would be happy to assist with this process and/or answer any questions or concerns you may have pertaining to EKRA, or its state and federal counterparts. Please feel free to contact us today for a consultation.