New anti-kickback provisions impact laboratory-physician relationships

Until recently, arrangements between physicians and commercial laboratories escaped federal anti-kickback rules because the arrangements did not involve government payers. But with passage of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA), physicians will need to review their standing arrangements and ensure compliance.

EKRA is Section 8122 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act), which was signed into law on October 24, 2018. EKRA establishes an all-payer anti-kickback prohibition that extends to arrangements with recovery homes, clinical laboratories, and clinical treatment facilities.

The intent of Section 8122 is to address the opioid crisis and prevent patient brokering and kickbacks related to substance abuse treatment facilities. However, the express wording of the statute does not limit the statute’s application to clinical laboratory arrangements which deal with treatment facilities. This means that any commercial-only, clinical laboratory arrangement-whether structured as a small business investment, management arrangement (MSO), or personals services arrangement, such as a medical director agreement-is subject to the new law, which carries severe criminal penalties. 

Penalties under the new law include a $200,000 fine "per occurrence" and up to 10 years in prison. It is not clear what "per occurrence" means. In addition, the Department of Justice may seek forfeiture of assets accumulated through any criminal infraction. Thus, the monetary impact can be much higher than the actual fine.

As a result, physicians with such arrangements should look to experienced health law counsel to ensure that their arrangements meet an available safe harbor.  

Martin Merritt, JD, is the executive director of the Texas Health Lawyers Association and a health lawyer at Friedman & Feiger, LLP.