Physicians New Law Increases Risk Of Allegations Of Health Care Fraud
More on SUPPORT: Lawmakers touted the new law as a means to make it more difficult for healthcare providers to subscribe these dangerous and addictive medications.
In theory, the law makes sense. In reality, it makes it very difficult for laboratories to provide quality care for patients. Clinical treatment facilities, recovery homes and laboratories are all impacted by these changes. In the past, relationships between these facilities and physicians rarely endured federal scrutiny as it did not include government payers. The new law extends the level of scrutiny available as it also applies to commercial arrangements. This allows it to extend to include arrangements between physicians and labs like small business investments and medical director agreements.
A specific provision leads to a problem: The Eliminating Kickbacks in Recovery Act (EKRA) is a provision within SUPPORT that essentially prohibits kickback payments to laboratories. EKRA is much stricter than the current federal Anti-Kickback Statute, which has safe harbors that often allow laboratories to receive payment without fear of accusations of violating the law.
Exceptions are present: There are exceptions to the rules outlined in EKRA, but as noted above these exceptions are much narrower than the safe harbors present within the Anti-Kickback Statute. The exceptions listed within EKRA include:
- Discount. A reduction in price under a health care benefit program, but only if the reduction is properly disclosed.
- Compensation. Compensation to an employee from an employer when the item or service is not connected to the number of individuals referred. An exception also exists for payments to an agent from a principal when the payments are for services that meet specific requirements outlined in the Code of Federal Regulations.
- Waiver. The waiver or discount “of any coinsurance or copayment by a health care benefit program, as determined by the health care benefit program.”
The ability to qualify for an exception is not easy. As such, it is wise to have legal counsel review the arrangement to ensure it is within the bounds of the new law.
Penalties are severe: A failure to abide by the rules in EKRA can result in up to 10 years imprisonment and a fine of $200,000. It is important to note these penalties may be in addition to forfeiture of assets connected to the alleged act of healthcare fraud.