The Department of Justice steps beyond the law’s original focus on opioid-related lab testing fraud
An interesting aspect with enforcement of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA) is the government’s willingness to go after charges tied to fraudulent COVID-19 testing.
The case U.S. vs. Malena Badon Lepetich provides a good example of this approach. A grand jury indicted Lepetich on various healthcare fraud charges last year, including that she allegedly offered to pay kickbacks for referrals of specimens for COVID-19 testing.
“The government had really only used EKRA in the context of addiction treatment space,” attorney Alexander Porter, a Partner at law firm Davis Wright Tremaine in Los Angeles, said in the latest issue of The Dark Report. “The Lepetich case shows that the government’s going to use EKRA beyond that context and go into other areas where they think that it can be useful—in particular, in the area of COVID-19 testing.”
Clinical laboratories and pathology groups should take note of this development.
Attorney Alexander Porter said EKRA enforcement now goes after fraudulent COVID-19 testing. (Photo: Davis Wright Tremaine)
Defendant Allegedly Filed $10 Million in Fraudulent Lab Claims
Lepetich was the owner of MedLogic, a clinical laboratory in Baton Rouge, La.
In addition to the fraudulent COVID-19 testing charges, she allegedly solicited and received kickbacks in exchange for referrals of urine specimens for medically unnecessary tests, according to the U.S. Department of Justice (DOJ).
EKRA Provisions Rose from the Opioid Crisis in the U.S.
EKRA is a criminal law that falls under the Communities and Patients Act, which lifted restrictions on medications for opioid treatment and sought to limit overprescribing of opioid painkillers. Originally, EKRA targeted fraudulent practices at sober homes and substance abuse treatment centers. However, the final draft of the bill added clinical laboratories to the list of providers under potential scrutiny.
At the time Congress passed EKRA, the law was primarily aimed at fraudulent activity in opioid treatment centers, including related lab testing.
Thus, the government’s use of EKRA in the COVID-19 charges against Lepetich case is newsworthy and establishes a precedent, noted Porter. He’ll speak about EKRA at the 2022 Executive War College on Laboratory and Pathology Management. The event takes place April 27-28 in New Orleans.
A contentious part of EKRA for clinical laboratories and pathology groups is that certain conduct protected under the federal Anti-Kickback Statute is treated as a criminal offense under EKRA. Some common lab practices come under that confusing designation, such as paying lab sales reps on a commission-based formula based on testing volumes they generate.
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