The US Department of Health and Human Services’ Office of the Inspector General (OIG) recently released a report calling on federal agencies to review diagnostic and testing laboratories that bill for COVID-19 tests. The agency encourages those who review these labs to watch for “high levels of billing for add on tests.” The OIG report goes on to state that these add on tests may not be in the patients’ best interests or medically necessary. Instead, they could be an indication of fraud.
What type of fraud?
The government could pursue a few different claims including an Anti-Kickback Statute or EKRA violation.
Congress passed the Eliminating Kickbacks in Recovery Act (EKRA) about five years ago. At the time, critics voiced concern over how this provision of the SUPPORT Act would impact diagnostic labs and medical testing facilities. During the early phases of the roll out, the impact seemed minimal.
What is EKRA?
In relevant part, EKRA makes it a crime to induce a referral “to a recovery home, clinical treatment facility, or laboratory.” The penalties are steep. A violation can result in up to 10 years imprisonment and a $200,000 fine.
Like its peers, the AKS and other self-referral laws, exceptions are written into the law. Unfortunately, the exceptions in EKRA are not the same and the government has yet to provide additional guidance on their use.
What is the impact of EKRA on today’s healthcare marketplace?
The impact has evolved over the past few years. Agencies have used EKRA to come after labs, notably for alleged violations connected to COVID-19 testing. The results of the OIG report noted above seem to indicate a high likelihood of increased federal scrutiny. Labs are wise to take this as a warning and proactively conduct internal audits to check for compliance and make changes if needed if issues are present.
Attorney John Rivas is responsible for this communication