EKRA stands for the Eliminating Kickbacks in Recovery Act, and it has become a prominent enforcement tool against fraud in the healthcare and medical testing industries. Although the law was developed in 2018 to help combat the opioid epidemic, it creates new rules for all types of diagnostic testing labs – not just toxicology labs – and bans traditional commission-based compensation programs.

Failure to adhere to the EKRA statute could result in up to $200,000 in fines and up to 10 years in prison – and penalties are per occurrence.

What Is the EKRA Law?

Enacted as part of a larger federal legislative initiative aimed at addressing the opioid crisis, the EKRA law prohibits recovery homes, clinical treatment facilities, and laboratories from accepting or paying kickbacks for referrals.

Under EKRA, it is a federal crime to knowingly and willfully do the following:

Common medical lab referral and compensation arrangements that could lead to criminal charges under EKRA include:

It depends on the facts and circumstances surrounding a laboratory's specific arrangements. EKRA is a relatively new law with little precedent or regulatory guidance to help interpret its applicability.

One 2021 ruling in Hawaii (S&G Labs Hawaii, LLC v. Graves) narrowly interpreted EKRA to exclude sales commissions based on the number of physicians, substance abuse counseling centers, or other organizations recruited to send samples to a particular lab. The federal court in Hawaii reasoned there was no EKRA violation in this case because the compensation that the lab paid the salesperson was not to induce him to refer individual patients to that lab, but rather physician groups and other lab clients.

This case is only binding in Hawaii, however, and it cannot be assumed that other federal courts will reach the same conclusion. Our team of health law attorneys is closely monitoring EKRA enforcement actions and convictions by government authorities to help our clients maintain compliance with the law.

EKRA applies to renumeration paid with funds from health care benefit programs – both federal health care programs and commercial insurance. EKRA does not regulate cash- or self-pay patients. However, the Texas Solicitation of Patient Act does.

Yes. Although the law was passed as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act, EKRA extends to all physician-laboratory relationships – not just those involved in the treatment of substance abuse and addiction.

EKRA broadly defines a laboratory as “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.”

As a result, under EKRA, no medical provider may solicit or accept payment, kickbacks, bribes, or rebates for laboratory referrals. Physicians and laboratories may have special relationships, but they cannot structure financial arrangements based on the number of people referred to a lab, the number of tests or procedures performed, or any billable amount.

In addition, clinical or diagnostic labs may not compensate employees or contractors based on volume- or value-based payment structures.

The following types of offers or compensation arrangements are exceptions to the prohibitions under EKRA regulations:

Some of these exceptions align with existing federal anti-kickback statutes, while others are new or more stringent. An attorney experienced in health care compliance and investigations can review your existing arrangements and structure to ensure EKRA violations are not taking place.

As medical testing labs race to form new relationships to meet the demand for COVID-19 testing, the federal government has initiated a crackdown on COVID-19 testing fraud, using EKRA as one of its enforcement tools.

Marketing agreements, employee arrangements, incentive- or performance-based compensation plans, and management structures are all subject to heightened scrutiny as the Department of Justice sniffs out bad actors taking advantage of the pandemic. Providers and COVID-19 testing labs should carefully evaluate any new relationships for EKRA compliance to avoid unwanted federal attention.

Many medical labs and professionals already have compliance plans in place for Stark Law and the Anti-Kickback Statute (AKS), but you also need to ensure compliance with EKRA. Revisiting your health care compliance plan is strongly recommended.

EKRA is a criminal law, which means your freedom is at stake. Don’t go to jail or pay excessive fines because of a simple mistake.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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