A new criminal statute, the Eliminating Kickbacks in Recovery Act of 2018 (“EKRA”), took effect on October 24, 2018. Among other things, EKRA appears to eliminate (or at least significantly restrict) the ability of certain providers – most notably laboratories – to compensate their sales and marketing personnel (including employees and independent contractors) on a percentage or volume basis, as described in more detail below. Specifically, EKRA makes it a criminal offense to knowingly and willfully offer, pay, solicit or receive any “remuneration” (i.e., anything of value, including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, in order to induce a referral (or in exchange for a referral) to a laboratory, clinical treatment facility or recovery home.
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If you have questions or would like assistance with analyzing and/or restructuring your compensation arrangements in light of EKRA, please contact a member of our Compliance and White Collar Defense Group or the Garfunkel Wild attorney with whom you regularly work.