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Congress Quietly Expands Anti-Kickback Crimes


In late October 2018, Congress passed the lengthy-named Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act – the “SUPPORT” Act.  Signed and effective as of October 24, 2018, the SUPPORT Act was a combination of numerous bills intended to address the nation’s much-discussed opioid crisis.  However, Section 8122 of the SUPPORT Act has potentially far reaching consequences in excess of those targeted to the opioid epidemic. Its ramifications are as-yet unknown but will likely be felt across the healthcare industry.  That section, known as EKRA, was intended to address referral arrangements in addiction treatment and recovery services.  EKRA extends to arrangements with recovery homes, clinical laboratories, and clinical treatment facilities.  It expands anti-kickback prohibitions, with independent criminal penalties of up to 10 years in prison, and hefty fines.

EKRA stands for the Eliminating Kickbacks in Recovery Act.  It will be codified in the federal criminal code.  Unlike its older brother the federal Anti-Kickback Statute, EKRA is an all-payor provision. It applies to all health care benefit programs1, public and private, in other words not just those involving federal dollars.  Whereas previously alleged kickback arrangements in the commercial payor context might be investigated and prosecuted under state law, possibly prosecuted using federal fraud laws, and more recently in some jurisdictions prosecuted using state laws in conjunction with the federal Travel Act, now the Department of Justice and its federal prosecutors have a new and more direct weapon in the commercial payor world.

All potentially affected providers should read the law in full.  To paraphrase it briefly, EKRA prohibits any solicitation or payment in exchange for or to induce patient referrals to a recovery home, clinical treatment facility, or clinical laboratory.  EKRA provides certain statutory exceptions. These include discounts that are disclosed and passed along to payors; wage payments that are irrespective of volume or value of referrals; payments under personal services and management agreements that are safe harbor compliant; and good faith, non-routine waivers of copayments.  However, its exceptions are not as broad or as inclusive as the safe harbors to the Anti-Kickback Statute.  Conduct or business arrangements previously seen as comfortably within an Anti-Kickback Statute safe harbor will not necessarily be protected from EKRA.  Rulemaking, the development of additional exceptions, and time for interpretation of the law are yet to come. Nevertheless, any business arrangements that could fall within EKRA’s prohibitions ought to be reviewed immediately, notwithstanding their Anti-Kickback Statute safe harbor compliance.

EKRA is likely to reverberate most strongly in the laboratory industry.  First, while the SUPPORT Act and its EKRA provisions are aimed at the opioid epidemic, as written EKRA covers all clinical laboratory services, not just lab services for individuals treating or seeking treatment for addiction and recovery services.  Second, EKRA treats employees and contractors identically.  The Anti-Kickback Statute’s “bona fide employee” safe harbor has led to a common practice in the industry of paying laboratory sales reps commission payments when those sales reps are properly classified as W-2 employees.  Under EKRA, this distinction and the protections of that safe harbor are no longer available.  EKRA’s compensation prohibition applies to employees and contractors alike.  Third, some have attempted to structure certain business arrangements beyond the reach of the Anti-Kickback Statute by avoiding federal programs and federal remuneration.  While this article does not endorse or opine on those arrangements under the Anti-Kickback Statute or other laws, those in the clinical lab services industry should take heed that EKRA will not support them. EKRA reaches commercial payors as well as federal ones.  

EKRA has left many questions unanswered.  Among them is its interplay with the Anti-Kickback Statute.  EKRA contains a clause which states, “This section shall not apply to conduct that is prohibited under” the Anti-Kickback Statute.  Did Congress mean “not prohibited”?  Did Congress mean “permitted”?  Some commentators are speculating such.  Others have opined that Congress meant exactly what it said. Conservative analysis and common principles of statutory construction require the latter inference.  Under this interpretation, the clause is a pre-emption clause, giving direction to the Department of Justice: conduct prohibited by both the Anti-Kickback Statute and EKRA should be prosecuted under the Anti-Kickback Statute, which pre-empts EKRA.  Conduct not prohibited by the Anti-Kickback Statute but violative of EKRA may be prosecuted under EKRA.  

According to commentators, a prior version of the SUPPORT Act which passed in the Senate did not include EKRA provisions. Analysts have noted that laboratories were thrown into EKRA at the last minute.  One Congressman expressed his concerns that EKRA was not properly vetted and may have unintended consequences.  That is likely true.  But until further clarification is issued, anyone potentially affected by the law should review his/her business arrangements and consult with regulatory and compliance counsel without delay.

1 EKRA refers to the statutory definition of health care benefit program found at 18 U.S.C. § 24.  That statute defines a “health care benefit program” as “any public or private plan or contract, affecting commerce, under which any medical benefit, item or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item or service for which payment may be made under the plan or contract.”  

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