On October 24, 2018, Congress enacted a new federal anti-kickback statute as part of its effort to combat the opioid epidemic. Congress established the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”) as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act of 2018. EKRA establishes criminal sanctions (up to $200,000 fine and/or 10 years imprisonment) for each kickback violation. Unlike the anti-kickback statute set forth in 42 U.S.C. § 1320a-7b(b) (“AKS”) that only pertains to federal health care programs (e.g., Medicare and Medicaid), EKRA applies to any “health care benefit program” and, thus, extends to services payable by both a federal health care program and a commercial insurer.
EKRA prohibits kickbacks related to the solicitation or receipt of remuneration for any referrals to recovery homes, clinical treatment facilities, or laboratories. EKRA defines these three treatment locations as follows:
Recovery home: a shared living environment that is, or purports to be, free from alcohol and illicit drug use and centered on peer support and connection to services that promote sustained recovery from substance use disorders.
Clinical treatment facility: a medical setting, other than a hospital, that provides detoxification, risk reduction, outpatient treatment and care, residential treatment, or rehabilitation for substance use, pursuant to licensure or certification under state law.
Laboratory: a facility for the biological, microbiological, serological, chemical, immuno-hematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings.
Another critical way that EKRA differs from AKS is in the exceptions available under the new law. Most noteworthy is EKRA’s exception for payments made by an employer to an employee or independent contractor, which requires that the payment not be determined by or not vary by (1) the number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory; (2) the number of tests or procedures performed; or (3) the amount billed to or received from the health care benefit program from the individuals referred to a particular recovery home, clinical treatment facility, or laboratory. This three-pronged exception is significantly more strict than the “employee” safe harbor under AKS, which only requires that payment be made to an employee who has a bona fide employment relationship with the employer. Thus, employment and independent contractor agreements for personnel associated with recovery homes, clinical treatment facilities, and laboratories must be reevaluated to ensure compliance with the new law.
In addition, EKRA’s broad definition of “laboratory” appears to indicate that EKRA applies to any laboratory services payable by a commercial insurer or federal health care program, regardless of their relationship to substance abuse treatment. Thus, all laboratories must assess their exposure under EKRA and make any necessary changes to contracts and other arrangements in order to ensure compliance, as we await for further guidance from the government on how to apply the new law.