The Eliminating Kickbacks in Recovery Act and the Anti-Kickback Statute: Healthcare Compliance and Ethics
By:
David S. Barmak, JD
The Eliminating Kickbacks in Recovery Act (EKRA) was enacted in conjunction with prohibitions that currently exist in the Anti-Kickback Statue (AKS) but are applicable to the recovery and laboratory healthcare industries.
The relevant content of the EKRA prohibits whoever pays or offers any remuneration “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” (18 U.S.C. § 220(a)).
This EKRA prohibition does not apply to “a payment made by an employer to an employee or independent contractor (who has a bona fide employment or contractual relationship with such employer) for employment, if the employee’s payment is not determined by or does not vary by:
(A) the number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory; (B) the number of tests or procedures performed; or (C) the amount billed to or received from, in part or in whole, the healthcare benefit program from the individuals referred to a particular recovery home, clinical treatment facility, or laboratory” (18 U.S.C. § 220(b)(2)).
The EKRA statute should be read in the context of the AKS. The AKS explicitly prohibits the offer of payment of any remuneration to any person to induce such person “to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item” paid by Medicare or Medicaid (42 U.S.C. § 1320a-7b).
The AKS does have a safe-harbor, which protects commission-based payments as long as a bona fide employer-employee relationship exists. Based upon the few cases decided involving EKRA, it appears that the employer-employee exception under AKS should protect commission-based payments.
In summary, the Eliminating Kickbacks in Recovery Act has now introduced potential exposure for non-compliant referral and payment relationships in the clinical laboratory and recovery industries. EKRA involves direct payment and referral relationships as well as sales and marketing arrangements. Sales and marketing arrangements for laboratory and recovery organizations should be scrutinized for compliance with both EKRA and the AKS.
A compliance and ethics program is necessary for laboratory and recovery organizations to ensure compliance with fraud, waste, and abuse laws, and regulations and court decisions.
Resources:
Eliminating Kickbacks in Recovery Act: Text – S.3254 – 115th Congress (2017-2018): Eliminating Kickbacks in Recovery Act of 2018 | Congress.gov | Library of Congress
Gabriel Imperato, “EKRA and the Anti-Kickback Statute: Healthcare Compliance and Risk,” Compliance Today, July 2023.
18 U.S. Code § 220 – Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories
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