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Physicians and labs: New law increases risk of investigation

| Nov 15, 2018 | Stark Law/Anti-Kickback Statutes |

The “Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communications Act,” also known as the SUPPORT Act, is a broad piece of legislation signed into law by President Donald Trump on October 24, 2018. The law will impact healthcare in many ways. One example: it is now often illegal for physicians to get any form of compensation related to referring a patient to certain laboratories.

Why should doctors care about this portion of the new law? As noted in a recent piece in The National Law Review, physicians are often investors or owners in laboratories. This arrangement is beneficial for the physician, as he or she may profit from referring patients to the lab.

In the past, a referral for a patient with Medicare or similar federal or state covered benefit program could be a violation of the federal Anti-Kickback Statute. To avoid prosecution, physicians would only refer patients with a private insurance provider to these labs.

The new law removes this possibility. A physician could now find themselves accused of a violation even when the referral involves a private insurance provider. In addition to physician-owned laboratories, the law also covers recovery homes and treatment facilities.

How is this different than the Federal Anti-Kickback Statute? As noted above, this law allows for more expansive enforcement. The new law allows the prosecution to move forward whether the billed party was a public or private provider. The Anti-Kickback Statute requires the referral involve a patient covered by a Federal Health Care Program like Medicare or Medicaid.

It is also important to note that a violation does not require a connection to the treatment of substance abuse disorders. This portion of the law, known as the Eliminating Kickbacks in Recovery Act, applies to referrals for “all categories of healthcare treatment.”

What are the penalties? Those who are convicted of an offense can face up to 10 years in prison and a monetary fine of $200,000.

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