Don't forget about EKRA...

Key Points:

• The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the SUPPORT Act) introduced the Eliminating Kickbacks in Recovery Act (EKRA).
• Congress passed EKRA to end the practice of “patient brokering” in connection with addiction treatment and recovery facilities. By including “laboratories,” in the list of applicable facilities, EKRA goes beyond patient brokering and prohibits the provision of remuneration to induce referrals to or the provision of any services at “laboratories,” broadly defined. 
• EKRA is an all-payor anti-kickback statute. Unlike the Federal Anti-Kickback Statute (AKS) which requires reimbursement by a Federal health care program like Medicare or Medicaid, EKRA applies regardless of whether payment is from a government payor or a commercial or private payor. 
• EKRA obligates the U.S. Attorney General – not the Office of Inspector General (OIG) – to promulgate regulations and additional exceptions. Given the Department of Justice’s thin history with substantive guidance on proactive compliance, the scope, nature, and timing of any EKRA regulations is difficult to predict.

Article:

The SUPPORT Act passed in October 2018 and included several critical provisions impacting life sciences companies’ compliance programs. In addition to expanding the reach of the U.S. Physician Payments Sunshine Act (the Sunshine Act), the SUPPORT Act included a new health care fraud and abuse law, EKRA. EKRA is an all-payor anti-kickback law that expands the reach of the U.S. government to criminalize kickbacks to induce patient and test procedure referrals in the lab setting when reimbursed by private and commercial payors, not just Federal health care programs like Medicare and Medicaid. 

EKRA prohibits the payment (or offer) and the receipt (or solicitation) of a kickback. 

EKRA makes it a federal crime – punishable by up to 10 years in prison and a maximum fine of $200,000 – to:

•  Solicit or receive any remuneration in return for referring a patient or patronage to a recovery home, clinical treatment facility or laboratory; or
• Pay or offer any remuneration (a) to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or (b) in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory.

EKRA is structured similarly to the AKS, which also penalizes both the payment and receipt of a kickback; however, AKS subjects violators to a maximum penalty of $100,000 and 10 years in prison. Department of Justice may likely enforce EKRA, much like the AKS, through the use of the False Claims Act.

EKRA is an All-Payor Statute and does not require a nexus to Federal health care programs.

Unlike the AKS, which applies only to business reimbursed by a Federal health care program (like Medicare or Medicaid), EKRA applies to any services covered by all health care benefit program, whether private or public. With EKRA, the government has a new tool to root out fraud in the provision of lab services, even when they are paid by a commercial or private payor.     

EKRA is broadly defined, implicating any remuneration paid in connection with lab arrangements; not limited to drug treatment or opioid recovery. 

EKRA goes beyond substance abuse and addiction treatment, not requiring a nexus to opioid use. By including the broadly defined “laboratories” under its scope, EKRA offers the government wide leeway in policing all arrangements with laboratories. “Laboratory” is defined by reference to the CLIA statute and includes all facilities:

[F]or the biological, microbiological, serological, chemical, immune-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.

The law broadly applies to interactions with laboratories that perform nearly any type of examination of human tissue for the purpose of diagnosing, preventing, or treating disease – not just labs testing for substance abuse. Although Congress may not have intended to enact such a broad fraud and abuse law, a plain reading of the statute shows the breadth of EKRA’s provisions.

EKRA’s exceptions partially parallel the AKS statutory exceptions.

EKRA includes seven statutory exceptions that track – but do not perfectly reflect – the statutory exceptions found under the AKS.

1. EKRA does not apply to discounts or other price reductions to a provider or other entity under a health care benefit program, if the price reduction is properly disclosed and reflected in the costs/charges made by the provider or entity. The AKS statutory exception for discounts and price reductions uses similar language. While EKRA is focused on all payors, AKS is focused on Federal health care programs.
2. EKRA does not apply to a payment made by an employer to a bona fide employee or independent contractor, if the employee’s payment is not determined by or does not vary by (a) the number of individuals referred to a particular recovery home, clinical treatment facility, or laboratory; (b) the number of tests of procedures performed; or (c) the amount billed to or received from the health care benefit program from individuals referred to a particular recovery home, clinical treatment facility, or laboratory. The AKS statutory exception exempts any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer). Unlike EKRA, the AKS does not limit the exception payments that do not vary based on the number of patient referrals or procedures performed.
3. EKRA does not apply to Part D drug discounts. AKS contains a similar statutory exception.
4. EKRA does not apply to a personal services or management contract that meets the AKS personal services safe harbor requirements (42 C.F.R. § 1001.952(d)). AKS also has a statutory exception for personal services or management contracts.
5. EKRA does not apply to a waiver or discount of any coinsurance or copayment by a health care benefit program, provided that (A) the waiver or discount is not routinely provided, and (B) the waiver or discount is provided in good faith. AKS exception for coinsurance waivers applies only to waivers of Medicare Part B coinsurance by FQHCs. The Beneficiary Inducement Law, however, contains a statutory exception that is more closely akin to EKRA’s exception, permitting a coinsurance waiver if (a) the waiver is not offered as part of any advertisement or solicitation; (b) the person does not routinely waive coinsurance; and (c) the person waives the coinsurance after determining in good faith that the individual is in financial need or there has been a failure to collect coinsurance amounts after making reasonable efforts.
6. EKRA does not apply to remuneration made between a Federally Qualified Health Center (FQHC) and an individual or entity providing goods, services, donations, etc. pursuant to a written agreement, providing the agreement contributes to the ability of the health center to maintain, increase, or enhance the quality of services provided to a medically underserved population. AKS contains an identical provision for remuneration to FQHCs.
7. EKRA does not apply to remuneration made under an alternative payment model or other payment arrangements that HHS determines that the arrangement is needed for care coordination or value-based care. Although OIG (as of May 2019) is continuing to assess how the AKS safe harbors can be revised to address value-based care, the AKS statutory exceptions do not address care coordination or value-based care. The AKS does contain, however, a statutory exception for incentive payments made to Medicare beneficiaries by an accountable care organization.

One notable distinction is that the AKS includes more statutory exceptions than EKRA. Additional AKS statutory exceptions are available for GPO payments, risk-sharing arrangements, discounts made under the Medicare coverage gap discount program, and incentive payments made to a Medicare beneficiary by an accountable care organization. The AKS also has the benefit of over 30 regulatory safe harbors that OIG has issued over decades of experience interpreting and applying the AKS to various health care arrangements. 

It is unclear whether the government will issue regulatory safe harbors under EKRA or the scope of their provisions. 

EKRA obligates the U.S. Attorney General – not HHS or OIG – to issue safe harbor regulations and regulations that clarify the statutory exceptions. Charging the Attorney General with issuing safe harbors and further regulations seems at odds with DOJ’s substantive expertise. While DOJ has issued guidance on substantive issues in the past – for example, previous informal guidance on complying with FCPA – HHS holds the most important substantive expertise on the health care delivery system, the cycle of patient testing and treatment, and the coverage of and payment for care. It remains unseen whether DOJ will make an effort at drafting regulations, will punt entirely to HHS & OIG, or will simply remain silent. 

EKRA’s language has key nuances that might impact interpretations.

A plain reading of EKRA reveals several language choices that could impact how companies and labs review and interpret the statute:

• First, EKRA applies to “services,” not “items and services” like the AKS. In other words, EKRA seeks to penalize remuneration that induces the provision of services (the taking and analysis of lab testing, for example). AKS seeks to penalize remuneration that induces both the services and the items used (the actual lab test, for example). This distinction likely does not matter for purposes of preventative compliance, but it may matter if the government seeks to enforce EKRA and AKS in the same matter.   
• Second, EKRA’s prohibition on receiving and soliciting a kickback turns on a “patient or patronage” to a facility or lab. EKRA’s prohibition on offering and paying a kickback relates to referring an “individual” to a facility. These terms – “patient,” “patronage,” and “individual” are not defined. This may not matter for purposes of compliance program controls, but it could matter if the government seeks to enforce EKRA’s provisions. 
• Third, in EKRA’s “bona fide employee” exception requires that the remuneration cannot vary based on the number of individuals referred to a facility or lab, the number of tests or procedures performed, or the amount billed to a health care benefit program. AKS’s “bona fide employee” exception is not conditioned on these requirements. This may impact compensation arrangements or require a closer look at how compensation is calculated with respect to laboratory-facing financial and commercial arrangements.   

Additional Questions

• Should stakeholders leverage decades of guidance issued by HHS and OIG regarding the AKS when interpreting EKRA? There is no guarantee that EKRA will have any regulatory safe harbors or safe harbors that match the AKS. But, in the absence of clear guidance from the government, a good source of direction is the AKS analogs and OIG compliance guidance. EKRA incorporates by reference several requirements and definitions of the AKS, which is a positive sign that any EKRA safe harbors may mirror the AKS safe harbors. 
• Should stakeholders leverage OIG’s traditional indicia of a kickback when analyzing arrangements under EKRA? In other words, is there a risk of overutilization? Increased costs to health care benefit programs? Impact of independent clinical and medical decision-making? Patient steering? Unfair competition? Again, the enforcement prospects are murky for EKRA; but, OIG’s past guidance may prove helpful for entities seeking to ensure compliance with the law’s broad provisions.
• What's the next step?  It's unclear; however, the regulatory development process should be enlightening as to the government's view of all of these comments and many more.