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Woman indicted for violating ERKA, making false statements, and tampering with records.
Just over a year after it became law, the government utilized the newest tool in its toolbox to enforce a referral kickback scheme involving substance use disorder (SUD) patients.
In January 2019, my Physician’s Practice article, What physicians need to know about the SUPPORT Act, provided an overview of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) and one of its related bills, Eliminating Kickbacks in Recovery Act of 2018 (EKRA).
EKRA made it a federal crime to receive or offer “[i]llegal remuneration for referrals to recovery homes, clinical treatment facilities, and laboratories.” While EKRA limits the scope to these three types of entities, it includes private payers. Additionally, “laboratories” include physician-owned laboratories and extend to include all laboratories, not just those used in connection with the treatment of SUD patients. There are also safe harbors, some of which overlap with the Anti-kickback Statute of 1972 (AKS), which also prohibits kickbacks but applies to government payers exclusively and has a broader reach in terms of persons.
The U.S. Government appears to be showing signs that EKRA is being taken seriously. In what appears to be the first enforcement action of its kind, the Eastern District of Kentucky U.S. Attorney’s Office indicted a woman for violating EKRA, as well as one count of making false statements (18 U.S.C. §1001) and one count of attempted record tampering (18 U.S.C. § 1512). The woman admitted that between December 2018 and August 2019, that “she solicited kickbacks from a toxicology laboratory in exchange for urine drug testing referrals, lied to law enforcement agents about the kickbacks she received, and then attempted to cover up the kickback by requesting the alteration of certain financial records.”
Participants in the healthcare industry should take-away the following items from the EDKY conviction. First, EKRA needs to be evaluated in conjunction with the Stark Law and AKS to see if a safe harbor for each law is met. Second, EKRA can be utilized as a basis for a False Claims Act case. Finally, private payers may also be using EKRA violations to sue providers. In sum, EKRA is not a law to ignore and we’re likely to see more EKRA cases emerge – both civil and criminal.
Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.