Healthcare Compliance Regulations that Clinical Labs Must Navigate

The My One Medical Source® (MOMS) platform is a convenient way to increase access to specialty testing for those who need it. Not only is the platform convenient to use, but it has also been vetted to meet the highest standards of compliance in the clinical laboratory industry.

In the lab world, there are many regulations that compliance officials must consider. Since we use these terms on a daily basis, we wanted to examine a few of these regulations a little deeper.

Stark Law

According to the National Center for Biotechnology Information (NCBI), federal physician self-referral prohibition, commonly referred to as the Stark law, is a set of regulations that pertain to physician self-referral under current US federal law. It was initially enacted in 1992 but expanded in 1995.

Stark Law is a healthcare fraud and abuse law that prohibits physicians from referring patients for certain health services paid for by Medicare to any entity with which they have a “financial relationship.” Per Summit Health Law Partners, the government broadly interprets “financial relationship” to include any direct or indirect ownership or investment interest by the referring physician, as well as any financial interests held by any of the physician’s immediate family members.

This law prevents fraudulent and unnecessary testing, referrals, and medical services. All members of a healthcare team need to be aware of Stark law and its ramifications.

Stark Law is not a criminal statute, but the Office of the Inspector General (OIG) can pursue civil action against violators under the civil monetary penalties law. Penalties can include fines up to $15,000 for each billed service that is based upon a prohibited referral, plus three times the amount of the government overpayment, according to Summit Health Law Partners.

Anti-Kickback Statute (AKS)

The Anti-Kickback Statute (AKS) has effects that span business relationships in the healthcare, pharmaceutical, and medical device industries. AKS is a criminal law that prohibits the “knowing and willful payment of ‘remuneration’ to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal healthcare programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients).”

Remuneration includes anything of value and can “take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies.

Unlike Stark Law, AKS is a criminal statute, and penalties for violations include fines, jail terms, and exclusion from participation in Federal healthcare programs. 

The OIG created a helpful chart highlighting the differences between Stark and AKS that can be found here.

Safe Harbors

According to the OIG, safe harbor regulations describe various payment and business practices that, although they potentially implicate anti-kickback statutes, are not treated as offenses under that statute.

The regulations specify allowable financial and referral relationships between physicians or other providers and suppliers.

A list of safe harbor regulations can be found here.

Eliminating Kickbacks in Recovery Act (EKRA)

In 2018, Congress enacted the Eliminating Kickbacks in Recovery Act (EKRA) as part of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (The Support Act), which is legislation aimed at addressing the opioid crisis.

EKRA was intended to address the opioid crisis by penalizing “patient brokers” (i.e., a rehab facility that pays a third party to procure patients for them; an illegal practice) who pursue profits from illegal referrals of patients who seek the services provided by recovery homes, clinical treatment facilities, or labs (all facilities “for the biological, microbiological, serological, chemical, immuno-hematological, hematological, biophysical, cytological, pathological, or other examination of human specimens for the purposes of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings).

Because of the broad definition of labs, and the various specialties covered by the definition, nearly all clinical laboratory test referrals potentially implicate EKRA. All labs, regardless of specialty, should be aware of EKRA and the potential penalties for noncompliance.

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