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NY labs: New rule goes into effect in October

The Eliminating Kickbacks in Recovery Act of 2018 (EKRA) is a new federal law that applies to diagnostic and clinical labs throughout the country. The law is a part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT). It takes effect October 24, 2019.

What exactly does EKRA cover? Lawmakers wrote the law to expand the ability of prosecution to go after kickbacks in the medical field.

How will it work? To establish a violation, the prosecution would need to show the accused knowingly and willfully solicited remuneration such as a kickback, bribe or rebate for provided services covered by a health care benefit program (public or private) in return for a referral, to induce a referral or in exchange for an individual using the services provided.

What are the exceptions to EKRA? Some exceptions to EKRA are similar to those granted under the Antikickback Statute (AKS), some are new. Those that track with the AKS include the exception for personal services and management contracts, Medicare gap overage discounts, federally qualified health centers and coinsurance/copayment waivers or discounts.

New exceptions include:

  • Standard discount. In some cases, a discounted price could qualify for an exception. In order to qualify, the law requires the discounted price be "properly disclosed and appropriately reflected in the costs claimed or changes made by the provider or entity."
  • Compensation payments to employees and independent contractors. Essentially, these payments must be a set, standardized amount. These payments cannot vary based on the number of referrals, tests, procedures or amount billed.
  • Alternative payment models. Lawmakers included this exception as an attempt to encourage care coordination efforts.
  • Others. The law grants the United States Attorney General some flexibility in granting additional exceptions as seen fit.

As discussed in a recent Dark Daily Webinar aimed at bringing clinical labs and pathology groups up to date on the issue, there are concerns the language used within this law will result in unintended consequences. As such, laboratories that find themselves accused of violations may be a victim to one of these unintended consequences. An attorney experienced with the health care industry can review the accusations and begin building a defense on your behalf. This could include a review to apply a potential exception or a case that focuses on the contention that the accusation is an unintended consequence of the new law.

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