Most people in health care know about two big federal laws — the Anti-Kickback Statute (AKS) and the Stark Law — that prohibit compensation for patient referrals for services reimbursed by government programs like Medicare and Medicaid.
In 2018, Congress passed a new law called the Eliminating Kickbacks in Recovery Act (EKRA) as part of the SUPPORT Act, which focuses on fighting opioid addiction. EKRA was meant to stop unethical business practices in addiction recovery, making it illegal to pay or accept money, gifts or bribes in exchange for referring people to rehab centers, treatment facilities or labs.
EKRA’S UNEXPECTED IMPACT
EKRA was supposed to focus on fraud in addiction treatment, but its wording covers far more than intended.
• It applies to all labs. The law doesn’t define “laboratory” in a limited way, so it affects every type of medical lab, not just those dealing with addiction recovery.
• It applies to all payment types. Unlike the AKS and Stark Law, which regulate government programs like Medicare, EKRA also applies to private insurance and even patients who pay out of pocket.
This means doctors and labs in every medical field — not just addiction treatment — must follow this law.
TOUGHER RULES, FEWER EXCEPTIONS
One big issue with EKRA is that it doesn’t offer as many exceptions (or “safe harbors”) as other health care laws.
For example, under AKS, some performance-based pay structures — where employees earn more based on how many patients they refer — can be legal if set up properly. But under EKRA, many of these same pay structures could be illegal, making it harder for medical businesses to figure out what’s allowed.
HOW THIS AFFECTS HEALTH CARE
Because EKRA applies to all labs and all payment sources, many health care providers are confused about what’s legal and what’s not.
The biggest problem? There’s almost no official guidance explaining how to follow the law. That leaves hospitals, clinics and labs guessing about what they can and can’t do, which increases the risk of violating the law without realizing it.
WHAT CAN HEALTH CARE PROVIDERS DO?
Until the government gives clearer rules, health care providers need to play it safe by:
• Reviewing how they pay employees/contractors and handle referrals.
• Updating their policies to avoid violating EKRA.
• Talking to legal experts to make sure they’re following the law.
Right now, the safest approach is to stay cautious and avoid risky payment arrangements — at least until there’s better guidance on how EKRA works.
Paul C. Williams is a partner at Bailey Kennedy LLP.
