As part of the federal government’s ongoing efforts to combat the nationwide opioid crisis, Congress enacted the Eliminating Kickbacks in Recovery Act (“EKRA”) as part of the SUPPORT Act on October 24, 2018. EKRA prohibits certain referrals of patients to recovery homes, clinical treatment facilities, and all clinical laboratories if such referrals are in exchange for kickbacks.
EKRA is a newcomer to the federal fraud and abuse law arena and we are currently awaiting regulations and interpreting guidance from the Attorney General. However, even in the absence of regulations or further guidance, EKRA is currently applicable.
EKRA’s broad anti-kickback prohibition may exceed its underlying legislative intent that the law target substance abuse, at least insofar as its application to all clinical laboratories. Further, in some circumstances, EKRA imposes its broad anti-kickback prohibition on arrangements that would otherwise have complied with the Stark law, the federal Anti-Kickback Statute , and the federal Beneficiary Inducement Statute. Benkoff Health Law has substantial experience in analyzing arrangements under EKRA and advising clients as to how to structure arrangements to comply with this new law.
What is the Eliminating Kickbacks in Recovery Act?
The Eliminating Kickbacks in Recovery Act (“EKRA”) was enacted and became effective on October 24, 2018. EKRA prohibits the knowing and willful soliciting, receiving, offering or paying of remuneration, directly or indirectly, in return for referring a patient to, or in exchange for an individual using the services of, a recovery home, clinical treatment facility, or laboratory with respect to services covered by a health care benefit program.
Notably, “health care benefit program” is defined under EKRA to include federal, state and private health insurance plans. Thus, its reach is broader than other federal fraud and abuse laws in this space that apply only to certain federal and state health care programs (e.g., the Stark law, the Anti-Kickback Statute, and the federal Beneficiary Inducement Statute).
EKRA only applies to referrals to recovery homes, clinical treatment facilities, and laboratories. That said, EKRA’s application to laboratories, regardless of whether the tests processed relate to substance abuse testing or treatment, was a last-minute addition by Congress and a significant change to the laboratory regulatory environment.
Further, EKRA does not currently define its use of the term “referral,” so further regulatory and authoritative guidance is needed to determine the scope of EKRA. Even in the absence of clear regulatory guidance, Benkoff Health Law analyzes and structures arrangements to ensure that they comply with EKRA and avoid risk of criminal implications associated with noncompliance.
What to do if EKRA is Implicated
If an arrangement implicates EKRA, it must be structured to comply with the law. Each violation of EKRA will be subjected to a fine of up to $200,000 or imprisonment of 10 years, or both. In addition, violators of EKRA could face collateral consequences including licensure sanctions, revocation and exclusion from governmental health care programs.
Although the law is a criminal law and includes a “knowing and willful” intent requirement, it is unclear at this point as to how the Attorney General will enforce the law. However, EKRA includes certain statutory exceptions to protect specific types of activities from enforcement action.
Commonly used EKRA safe harbors include:
- Certain discounts obtained by service providers;
- Payments made to employees and independent contractors that meet certain requirements;
- Certain drug manufacturer discounts provided under the Medicare coverage gap discount program;
- Arrangements that meet the federal Anti-Kickback Statute’s personal services and management contracts safe harbor;
- Certain waivers or discounts of coinsurance or copayments;
- Certain remuneration between health care entities and an individual or entity related to medically underserved populations; and
- Certain remuneration made pursuant to advanced payment and other models necessary for care coordination or value-based care.
EKRA governs arrangements that may also implicate the Stark law, the federal Anti-Kickback Statute and the federal Beneficiary Inducement Statute. However, EKRA is inconsistent with these laws, and this results in significant challenges for affected health care providers and other entities and individuals who are subject to, and now must comply with, EKRA. For example, laboratories that were previously subject to the AKS are finding that they need to restructure their arrangements with their salesforce and marketing teams because, although those arrangements may be compliant under the AKS, they are not compliant under EKRA without revision. In addition, state anti-kickback, fee-splitting, and self-referral laws may be inconsistent with EKRA. Reesa Benkoff has authored various industry publications pertaining to EKRA and successfully advises clients as to whether their arrangements implicate EKRA and, if so, she provides practical solutions to comply with EKRA.