EKRA commission sales payment upheld
As we have noted previously, the EKRA statute was passed as part of the opioid legislation and, among other things, provides for stiff penalties for remuneration for referrals to any laboratory. It is far broader than Stark or the anti-kickback statute. While there have been settlements for bad behavior under its provisions we have, now, the first court opinion, S&G Labs Hawaii, LLC v Graves (2021 WL 4847430) interpreting that part of the statute that appeared to prohibit commission payments to employed salesmen. In this case, the court found that commission payments were legitimate where they were to a salesman who introduced to the lab physicians, counseling centers and other entities who would refer to the lab. He had no contact with any individuals whose own specimens would be tested. The law prohibits remuneration for the referral of "an individual." The commission sales payment under the employment agreement was upheld. Clients have asked and we have cautioned that this opinion is extremely narrow in its implications. EKRA remains a thorny problem for all laboratories and those who refer to them.