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Hastily written law may have unintended impact on labs

Lawmakers are taking action against the current opioid addiction crisis. One specific example involves the passage of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA). The law, discussed in detail in a previous post available here, is designed to help better ensure those who are treating patients battling opioid addiction focus on patient care as opposed to financial motivations.

Although well-meaning, the law as written could have unintended consequences for clinical laboratories. Lawmakers used broad language to draft the law, language that seems to extend to apply to every lab instead of focusing specifically on those that deal with opioid addiction treatment.

One specific example: discrepancy between the safe harbors provided under EKRA and the Anti-Kickback Statute (AKS). The AKS is another federal law written by lawmakers to help better ensure physicians and other medical professionals were not overly incentivized by financial gain. Unlike AKS, EKRA does not include safe harbors if compensation is based on the number of tests or procedures performed. The government may accuse a lab of violating EKRA if it provides compensation to employees or independent contractors based on performance or productivity.

Violations are serious. Fines can reach $200,000 and come with a prison sentence of up to ten years.

Legal experts have called on Congress to intervene, to pass additional legislation that will tailor EKRA to focus on kickback arrangements at substance abuse labs instead of the current broad language that seems to allow EKRA to apply to every clinical and diagnostic lab. In the meantime, any lab under investigation is wise to act to protect their interests.

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