Danielle Sloane Answers Questions about EKRA’s Ban on Commission-Based Lab Sales

December 19, 2019
Laboratory Economics

Bass, Berry & Sims attorney Danielle Sloane answered questions about the status of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) enacted in October 2018 as part of the larger Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act. EKRA, intended to capture patient brokering in the context of recovery treatment and sober living, also broadly captures laboratories. In the article, Danielle addressed issues related to EKRA’s ban on commission-based sales arrangements and answered the following questions:

  1. Has there been any additional OIG guidance, clarification, or changes to the EKRA law banning volume-based commissions for lab sales reps since it was passed late last year?
  2. Do you anticipate any near-term changes (within 6 months) that would narrow the scope of EKRA?
  3. Is the EKRA law subject to whistleblower lawsuits?
  4. Outside of the lab industry, are there any other similar laws that have been passed targeting volume-based commissions for other types of healthcare services? Or is the EKRA law targeting laws unique?
  5. Most labs have not yet changed their sales rep compensation structure to comply with EKRA on the hope that this law will be narrowed. What are the risks involved with not complying with EKRA?

Danielle stressed that “[a] ll laboratories should understand that commission-based sales arrangements are prohibited by EKRA. … However, given that there has been no enforcement, no guidance issued by the DOJ or the DHHS, and only minimal commentary from these agencies in public presentations (e.g., noting EKRA as a potential enforcement option for the DOJ to reach beyond federal healthcare programs), the risk of enforcement right now seems relatively low for most laboratories with strong compliance programs and infrastructure that are not engaging in questionable behavior…. For those choosing to take a wait and see approach, it may be wise to structure its sales arrangements to comply with an Anti-kickback safe harbor and/or ensure its compliance program has sufficient checks and balances in place to prevent, and quickly catch, any questionable sales tactics.”

The full article, “Labs in Quandary over EKRA’s Ban on Commission-Based Lab Sales,” was published in the December 2019 issue of Laboratory Economics (subscription required).