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New law means physicians should review arrangements with labs

| Dec 18, 2018 | Physicians And Group Practices |

It is not uncommon for physicians and physician groups to have arrangements with clinical laboratories. These arrangements may take the form of a small business investment or management arrangement and include financial incentives to use certain labs to provide quality care for patients. In the past, these arrangements were generally not scrutinized by the federal government if they did not result in payment from Medicare or other government providers.

Recent passage of a new law will result in change.

Whatever the details of the arrangement, it is prudent for physicians and physician groups to review the agreement to make sure it is in line with new requirements. If not, physicians could face accusations that can result in up to ten years in jail and a $200,000 fine.

More on the new law: The new law is part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT). A provision within this law, Eliminating Kickbacks in Recovery Act of 2018 (EKRA), makes it illegal to receive any remuneration for referrals to recovery homes and clinical treatment facilities.

The law defines a ”clinical treatment facility” as a “medical setting other than a hospital that provides detoxification, risk reduction, outpatient treatment, residential treatment, or rehabilitation for substance use.” This definition is broad and extends beyond facilities that deal solely with opioid treatment.

Essentially any payment in exchange for referrals could result in a violation, regardless of intent. The language EKRA clearly states a violation need not be willful to result in penalties.

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