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New Federal Anti-Kickback Prohibition Applicable to Clinical Laboratories

Alert
11.05.2018
By Sheva Sanders

Notwithstanding its name, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act of 2018 or the SUPPORT Act appears to regulate behavior that has nothing to do with opioids. One such provision of the bill, which was signed into law on Oct. 24, 2018, is an all-payor anti-kickback law that applies to recovery homes, clinical laboratories (whether or not they are involved in drug testing), and clinical treatment facilities.

Most significantly, while the federal anti-kickback statute (AKS) applies only to “federal health care program business,” the new anti-kickback provision imposes very significant fines and criminal penalties on kickbacks regardless of the payor, meaning that commercial business is also subject to a prohibition on kickbacks.

It may not be a matter of merely extending your existing approach to AKS compliance to commercial business, as the new law and its exceptions do not parallel the AKS and its exceptions and safe harbors in all respects. For example, while much depends on forthcoming regulatory guidance, particularly as to the construction of the term “referral,” this law may signal a significantly more restrictive view of permissible compensation relationships between clinical laboratories and their sales force than is taken under the AKS. Unlike the AKS, which exempts remuneration to W-2 employees from its scope, this new law provides that even employed sales persons engaged in referring patients may not be compensated on a volume-related basis. If a person must be a healthcare provider or at least in contact with a patient in order to make a “referral,” then this restriction is not that significant. However, if the term is interpreted–as the exception for payments to employees perhaps suggests is intended–to encompass recommendations to caregivers designed to elicit traditional referrals, then this is a very significant difference.

In light of the new law, we urge you to review your compliance program to ensure that your remunerative relationships are consistent with these restrictions. Considering the onerous penalties, we suggest a thoughtful approach pending resolution of the many interpretive issues.

For more information on the SUPPORT Act, please contact Sheva Sanders, Mary Foarde or the Stinson Leonard Street contact with whom you regularly work.

Attorney

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