EKRA Compliance For New York And New Jersey Diagnostic Testing Labs
A recently enacted law has the potential to significantly affect the business operations and practices of diagnostic testing laboratories. The Eliminating Kickbacks in Recovery Act of 2018 (EKRA) places additional regulations on how testing labs can compensate employees and independent contractors, and prohibits kickbacks, rebates and certain volume-based or dollar-based billing schemes.
Each violation of EKRA is punishable by a fine of up to $200,000 and a prison sentence of up to 10 years.
What Is EKRA And How Does It Work?
The opioid epidemic presents immense challenges to governments and health care providers across the country. On the one hand, those addicted to painkillers and their families must endure unimaginable suffering. On the other, some pharmaceutical companies and health care providers are profiting immensely by feeding the demand for these drugs.
The purpose of EKRA is to reduce the incentive some health care providers have to facilitate the distribution of opioids. These are EKRA’s most important provisions:
- Providers of health care services (including diagnostic testing labs and drug treatment centers) are prohibited from soliciting, paying or accepting remuneration (such as a kickback, bribe or rebate) for referring or sending business to a testing laboratory or referring a patient to a treatment facility.
- EKRA applies to both employees and contractors of these organizations.
- The act appears to prohibit many types of commission-based compensation schemes. However, compensation or payment of remuneration is allowable when it does not vary due to:
- The number of individuals referred to a health care provider
- The number of tests or procedures performed
- The amount billed to or received from a health care benefit program
We Are Ready To Help Your Testing Lab
At Rivas Goldstein, LLP, we enable diagnostic testing laboratories to comply with the law while helping them grow their businesses. Our attorneys can:
- Help you understand EKRA and how it affects your business
- Conduct an audit of your compensation programs and billing practices to assess your compliance with EKRA
- Recommend changes to those programs and practices where necessary
If the government does allege EKRA violations, our lawyers will tenaciously defend your business.