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DOJ uses EKRA to pursue COVID fraud

On Behalf of | Jun 30, 2022 | Diagnostic Testing And Reference Labs |

The Department of Justice (DOJ) just made an already ambiguous law even more difficult to navigate. Lawmakers originally touted the Eliminating Kickbacks in Recovery Act (EKRA) as a weapon to help combat the growing opioid crisis. In reality, we have seen the government use it to prosecute a variety of issues, including the most recent example: fraud related to COVID-19 testing.

Why is EKRA so confusing?

In this case, the issue is the definition of a lab. EKRA states that it prohibits payment in exchange for referring a patient to “a recovery home, clinical treatment facility or laboratory.” The term “laboratory” is left broad, it is not just kept within the confines of the addiction industry. As such, the government can use EKRA as a tool to against almost any diagnostic lab in the country.

Has the government used EKRA in this way?

Yes, it has in multiple cases already. In the most recent example, U.S. v. Malena Badon Lepetich, the government has accused a lab owner of fraudulently obtaining almost $15 million from government programs. This lab did not operate in the opioid industry. Instead, the feds claim the owner both paid and received illegal kickbacks in connection to unnecessary medical testing of urine samples and fraudulent COVID testing.

This is part of a larger investigation involving 14 individuals who face allegations of health care fraud as part of a scheme totaling almost $150 million in false billings throughout the country.

What can diagnostic lab owners learn from this most recent EKRA case?

This is yet another example that shows the government plans to use EKRA outside of the addiction space. Today, that includes COVID-19 testing. It is imperative that labs tread carefully when billing for testing as a misstep could lead to allegations of an EKRA violation.

Attorney John Rivas is responsible for this communication

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