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Will regulations inhibit diagnostic lab growth in 2020?

Diagnostic and clinical labs may experience a surge in growth in coming years. A market research company recently released findings after analyzing the industry and found key factors that it believes predict an upcoming surge.

Why a potential surge in the need for diagnostic and clinical labs?

The market research company’s prediction is based on a combination of factors, including the aging population and increased awareness of the importance of early disease detection and intervention. The group predicts these factors, combined with the likely availability in the near future of newly developed products and services, will fuel growth.

Will regulations prove a hurdle to growth in this market?

Leaders in this market may wonder how they can better ensure wise growth. One important consideration: regulations. In order to grow wisely, entrepreneurs within this market must make sure they operate within the bounds of the law.

One specific law to navigate is the Anti-Kickback Statute (AKS). This law makes it illegal for physicians to receive financial compensation in exchange for patient referrals. The motivation behind this law is an honorable one – to help better ensure physicians are motivated by patient needs as opposed to financial gain. However, the reality of the law can inhibit the ability of professionals to work together to meet a patient’s needs. As a result, labs who have contracts with physicians and medical practices are wise to have legal counsel review the agreements to better ensure they do not violate this law.

A more recent law also provides a potential hurdle. The Eliminating Kickbacks in Recovery Act of 2018 (EKRA) impacts labs in many ways. It can prohibit certain agreements that are based on a commission system. Exceptions are present and labs may be able to utilize an exception to continue an existing relationship.