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In enacting the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) late last year, the U.S. Congress approved an unprecedented expansion of federal anti-kickback authority. EKRA adds an all payor anti-kickback rule to the health care fraud law concerning improper remuneration for patient referrals to, or in exchange for an individual using the services of, a recovery home, clinical treatment facility or clinical laboratory.

The problem for clinical laboratories is that the language of the statute is very broad with the term laboratory not limited to just those facilities associated with substance abuse services but potentially extending to all lab services.

Moreover, EKRA seems to implicate engagement of sales and marketing representatives, as such individuals are compensated for inducing referrals.

In short, EKRA now enables the government to monitor provider arrangements intended to generate business for any laboratory service paid by a federal health care program or commercial health insurer. So what’s the big deal? Well, the ERKA hammer is that a violation is punishable by a fine of up to $200,000 and/ or imprisonment of up to 10 years for each occurrence.

Many Washington observers expect either Congress to amend ERKA to clarify that it implicates only those lab services provided in a recovery home or clinical treatment facility or HHS to clarify whether it believes payments to sales personnel now permitted under the anti-kickback law safe harbors are prohibited by ERKA.

But legal opinion is mixed regarding what labs should do until there is some official clarification on how ERKA impacts lab business arrangements. A good many lab companies including the national labs appear to be taking a “wait and see” attitude for now but others are following the counsel of some legal experts who advise labs to review current compensation arrangements with sales personnel, including both its employees and independent contractors to ensure compliance with ERKA.