Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

EKRA Updates: COVID-19 Testing, Employment Agreements, and More

Client Alert

Ever since the Eliminating Kickbacks in Recovery Act (“EKRA”) was passed by Congress in 2018, we have been waiting to see how the law is interpreted and ultimately enforced. As a reminder, EKRA seeks to eliminate kickbacks in return for patient referrals to facilities that treat those overcoming addiction, such as recovery homes, clinical treatment centers, and laboratories.[1] (NOTE: EKRA applies to all laboratories, not just those related to addiction treatment.) It is essentially an expansion of the Anti-Kickback Statute, which only applies to those services that are reimbursable through federal healthcare programs such as Medicare and Medicaid, to now also cover services reimbursable through private insurers.[2]

Guidance and enforcement actions pertaining to EKRA are still sparse.  However, this is a good time to remember that our addiction treatment provider and laboratory clients should keep EKRA top of mind. All compliance policies, training, and risk assessments for addiction treatment homes and centers, as well as all laboratories, should address EKRA. Here is a quick summary of some key developments since EKRA went into effect.

First Criminal Conviction Under EKRA – January 2020

The first criminal conviction under EKRA occurred in January 2020. In that case, a Kentucky woman received $40,000 in kickbacks from the CEO of a toxicology laboratory for referring patients for urine tests at the CEO’s lab.  

COVID-19 Testing – March 2020

Early in the COVID-19 pandemic, the Department of Justice (“DOJ”) issued a warning that EKRA also applies to COVID-19 testing sites. On March 30, 2020, the Department of Justice (“DOJ”) released information that a Georgia man, Erik Santos, was prosecuted for receiving kickbacks on a test-by-test basis from testing facilities for referring people to get tested for COVID-19 at their sites.[3] Santos ran his own marketing firm, which was supposed to help people find testing companies for a variety of services, not just for COVID-19. However, when the pandemic hit the United States, he expanded his business to those companies testing for the illness. Specifically, he received kickbacks for referring patients and then bundled them with a respiratory pathogen panel (RPP) test that was unnecessary in determining whether someone has COVID-19.[4]

Profiting off COVID-19 in particular was especially heinous, per the DOJ, because those that are affected by COVID-19 the most are people over the age of 65, a large number of which are covered under Medicare, implicating the Anti-Kickback Statute as well. Therefore, the DOJ stated that “Santos sought to maximize his kickback profits and to bleed federal health care resources at a time when Medicare beneficiaries across the United States were in dire need of coverage for medical treatment and services.”[5]

Employment Agreements – February 2021

In February 2021, a case was heard before the U.S. District Court of Hawaii that involved a medical laboratory, S&J, changing their sales team’s employment agreements from compensation-based to a flat-rate in order to comply with EKRA.[6] One of the employees argued that the laboratory did not have to change its employment agreements, and was subsequently fired for threatening to leave and refusing to sign the new agreement. The employee then sued S&J, and S&J filed counterclaims against him.[7]

Thus far, the only matter that has been resolved is whether or not summary judgment was proper in favor of the employee, for the counterclaims that S&J had brought against him.[8] Therefore, the decision of whether or not it was proper for the employment agreements to be changed to a flat-rate has yet to be decided, but the decision will impact other laboratories and other entities covered under EKRA.

Compliance Plan Updates

All healthcare providers should have a living, breathing compliance plan that addresses key healthcare regulations. For those in the addiction treatment space, as well as laboratories, it is important that these plans include EKRA compliance. 

If you have questions concerning EKRA, policies and forms you can use to comply with EKRA, or healthcare regulatory compliance in general, please contact Jeana M. Singleton at jmsingleton@bmdllc.com or 330-253-2001, or any member of the BMD Healthcare and Hospital Law group.

[1] 18 U.S.C. § 220

[2] JDSUPRA, EKRA Guidance for Clinical Laboratories in the Wake of COVID-19 Testing Surge, https://www.jdsupra.com/legalnews/ekra-guidance-for-clinical-laboratories-24711/#:~:text=EKRA%20broadly%20prohibits%20soliciting%2C%20receiving,are%20significant%2C%20and%20penalties%20per, (accessed April 22, 2021).

[3] United States Department of Justice, Georgia Man Arrested for Orchestrating Scheme to Defraud Health Care Benefit Programs Related to COVID-19 and Genetic Cancer Testing, (Mar. 30, 2020), https://www.justice.gov/usao-nj/pr/georgia-man-arrested-orchestrating-scheme-defraud-health-care-benefit-programs-related (accessed April 20, 2021).

[4] Id.

[5] Id.

[6] S&G Labs Hawaii, LLC v. Graves, 2021 IER Cases 54692, 2021 WL 621429, at *1 (D. Haw. Feb. 17, 2021), reconsideration denied, No. CIVIL1900310LEKWRP, 2021 WL 1081114 (D. Haw. Mar. 19, 2021)

[7] Id.

[8] Id.


Community Banks: Collaboration, not isolation, is the key to protecting/ enhancing the cannabis business you pioneered

As we prepare for the plenary session of the informal institutional cannabis lenders community announced in my previous article, I am pleased to advise that participants now include 5 of the best-known dedicated loan funds; a select group of commercial banks ranging in size from single state community banks to mid-size regionals making cannabis loans into the mid-8 figures; and, a syndicator of credit union cannabis loans.

Inflation Reduction Act: Healthcare Provisions

On August 16, 2022, President Joe Biden signed into law the Inflation Reduction Act (the “Act”), a landmark climate, healthcare, and tax bill. Though the Act’s climate provisions have received most of the media attention, the healthcare aspects of the Act present some of the most significant changes to the American healthcare system since the passage of the Affordable Care Act.

The Current State of Assignment of Benefits Litigation in Florida

On May 25, 2022, Florida lawmakers approved property insurance reforms that remove attorney’s fees, with respect to assignment of benefits (“AOB”) property insurance litigation. One-way attorney’s fees are a longstanding problem in Florida and the reforms come at a time when AOB litigation increasingly affects homeowners in a negative way.

Proposed Community Revitalization Grants for Ohio Projects

Jason A. Butterworth client alert ohio tax credits historic preservation tax credits community revitalization grants

Ohio Senate Bill 225 Paves the Way for Greater Investment in Opportunity Zones and Historic Districts

Ohio Senate Bill 225 is poised to make dramatic enhancements to certain tax credit programs in Ohio, specifically those surrounding investments in “Opportunity Funds” and historic buildings. Signed into law by Governor Mike DeWine in June 2022, the Bill is positive news for real estate developers working to revitalize Ohio communities with investment and rehabilitation projects.