Lab relationships for treatment programs: EKRA, kickbacks and a clean lab contract

The short answer

Pay a lab its fair price for the testing you buy, accept nothing else of value from it, and order only tests that are medically necessary for each client. Federal EKRA (18 U.S.C. 220) makes paying or receiving anything of value for referrals to a laboratory a crime for every payer, including commercial insurance; the federal Anti-Kickback Statute covers Medicare, Medicaid and TRICARE; the Stark law applies if a physician with a financial tie to the lab orders tests for Medicare patients; and the Texas Patient Solicitation Act covers all payers in Texas. Put the relationship in a written agreement your attorney has reviewed, with a business associate agreement and a 42 CFR Part 2 qualified service organization agreement.

The laws that reach lab deals

Our patient brokering laws guide covers these laws in full. Here is how each one lands on a lab relationship:

Law	Who it covers	What it means for labs
EKRA (18 U.S.C. 220)	Referrals to recovery homes, clinical treatment facilities and laboratories, paid by any health care benefit program, public or private	Anything of value from a lab to a program (or its staff) in return for sending specimens is the core offense. Penalties reach $200,000 and 10 years per violation. Its employee exception doesn't cover pay that varies with the number of tests performed or the amount billed, so a lab sales rep paid per test is a problem.
Anti-Kickback Statute	Referrals of items or services paid by federal health care programs	Applies whenever a Medicare, Medicaid managed care or TRICARE client's test is involved. Arrangements protected only if they meet every condition of a safe harbor in 42 CFR 1001.952.
Stark (physician self-referral)	A physician's referrals of Medicare patients for designated health services, which include clinical laboratory services, to an entity the physician or a family member has a financial relationship with	If your medical director or an owner who's a physician has any financial tie to the lab, an exception must fit. Stark doesn't depend on intent (CMS).
Texas Patient Solicitation Act	Paying or accepting anything of value for securing or soliciting patients for a licensed health care provider, any payer	Applies on top of the federal laws (Texas Occupations Code chapter 102), and was broadened to "any benefit or commission" in 2025.

Beyond kickbacks, the other lab risk is billing for tests that weren't needed. A lab that suggests large standing panels for every client, or definitive testing on every specimen, is pushing you toward claims a payer auditor will ask you to justify. The HHS-OIG overview of the fraud and abuse laws is a plain-English starting point.

Offers to turn down

Lab sales pitches to treatment programs tend to sound like customer service. Run each one through a simple test: would you otherwise pay for this yourself? If yes, getting it free from the lab is a thing of value.

The offer	Why it's a problem	What to do instead
"Processing," "handling" or "collection" fees paid to your program per specimen	Money that rises with the number of specimens you send is pay for referrals	Decline. Collecting the specimen is part of your service.
Free instant cups or dip cards for your in-house testing	Supplies you'd otherwise buy, given because you send the lab your confirmations	Buy your own point-of-care tests from a supplier at a market price
A lab-paid collector or technician placed at your program	Free staff doing work your program would otherwise pay for	Your own trained staff collect; ask counsel before any lab personnel work on site
Rent for a "collection room" or a "space lease" from the lab	Rent paid to a referral source can be a disguised kickback	Only with your attorney's approval, in writing, at fair market value for space actually used
Free EHR interface, software, computers or a printer	Things of value with real cost; some donations have narrow legal protection and some don't	Ask counsel before accepting anything beyond what's needed to send orders and receive results for that lab's tests
"We'll never bill your clients" or routine waiver of client balances	Can be an inducement to the program and its clients, and may breach the lab's payer contracts	Ask how the lab handles client balances and financial hardship, in writing
Big default panels or "we'll set up a standing order for you"	Tests that don't change care are a billing and fraud risk for the program that ordered them	Individualized orders from your practitioner, with the reason in the chart
Revenue sharing, a "management fee" or an investment in the lab	Money flowing back to the referral source; Stark issues if a physician is involved	Don't. If an owner already has a stake in a lab, talk to counsel now.
Gifts, meals, tickets for staff who choose the lab	"Anything of value" includes small things, and Texas law covers any benefit	A written policy: staff accept nothing from vendors that receive your referrals

Our compliance policy template says it plainly: no one at the program, or acting for it, may offer, pay, ask for or accept anything of value in return for referring a person to or from a treatment provider, recovery residence, laboratory or any other health care business, and ordering or arranging drug tests for billing rather than care is listed as a prohibited practice.

How to choose a lab

• CLIA certification for the testing it does, with a copy of the certificate in your vendor file. Your own Certificate of Waiver covers only your in-house waived tests; see our CLIA waiver guide.
• In network with your main payers. An out-of-network lab can leave clients with bills you never intended. Ask which of your plans the lab is contracted with, and check the Texas Medicaid plans you take.
• Not excluded. Check the lab against the OIG exclusion list before you sign and on the same monthly cycle as your staff.
• A test menu that fits your policy: definitive testing for the drug classes you need, including the medications your clients take (buprenorphine and its metabolite, for example), and the ability to order exactly the tests the practitioner selects.
• Turnaround and results delivery: how fast confirmations come back and how results reach the chart. If results come by fax or portal, decide who files them and how fast.
• Privacy paperwork: a HIPAA business associate agreement and a 42 CFR Part 2 qualified service organization agreement, so the lab can receive SUD records without a consent for each disclosure and is bound by Part 2's rules.
• A fair, written price for any testing your program pays for directly (for example, self-pay clients or testing your contracts make your responsibility).

On our Texas program roadmap, "Choose a reference lab, and keep the relationship clean" is a client-owned step after the organization NPI: open the account, get results flowing to the chart, and accept nothing beyond the service.

The written agreement

Your attorney drafts or reviews it. It should cover:

1. The services: which tests, turnaround times, specimen pickup, supplies needed only to collect and ship that lab's specimens, and results delivery.
2. Price, if the program pays anything, set in advance at fair market value and not tied to volume.
3. No remuneration clause: neither side pays the other anything for referrals, and no staff, rent, equipment or gifts change hands.
4. Billing: the lab bills payers directly for the tests it performs, under its own NPI and CLIA number; the program bills only what it performs itself.
5. Client billing: how the lab treats copays, deductibles and out-of-network balances, and its financial hardship process.
6. Orders: the lab accepts only individualized orders from authorized practitioners and doesn't pre-select panels.
7. Compliance: both parties' exclusion status, notice if either is excluded or investigated, and the right to end the agreement for compliance reasons.
8. Privacy: the BAA and Part 2 qualified service organization terms, breach notice and record return.
9. Term and termination, with records kept after the agreement ends.

Orders and requisitions

• Only authorized practitioners order, and each requisition matches an order in the chart for that client.
• No pre-checked boxes. Requisition forms with panels already selected make every order look the same. Ask the lab for a blank requisition or an electronic order that starts empty.
• The reason is in the chart: why this client, why this panel, why confirmation. Our drug testing policy guide lists when to send a specimen for confirmation.
• Keep requisitions and results together. An auditor will pull the order, the requisition, the result and the note that used it.

Who bills for what

Test	Who performs it	Who bills
Instant cup read on site	Your program, under its CLIA Certificate of Waiver	Your program, if the payer pays separately (often it's in the per diem)
Confirmation at a reference lab	The lab	The lab, directly to the payer
Testing the program buys for self-pay clients	The lab	The lab bills the program at the agreed price; the program charges the client its posted fee

Never put a test on your claim that someone else performed, and never let a lab bill for something your staff did. Codes, the per diem question and the Texas Medicaid CLIA edits are in our billing codes section and our IOP billing checklist.

The yearly lab review

Put it on the compliance calendar with your other vendor reviews:

• Re-read the agreement; confirm nothing of value has changed hands outside it.
• Confirm the lab's CLIA certificate is current and it isn't excluded.
• Look at volume: tests per client per month, confirmation rate, and any client or staff member far off the pattern.
• Pull a few charts and match orders, requisitions, results and notes. A chart audit from us does this as part of the payer-audit read.
• Retrain staff who order or collect on the gift and vendor policy.

Already in an arrangement that looks like one of the offers above? Stop accepting the benefit and talk to a health-care attorney before you do anything else; the "already in a bad deal" section of our patient brokering guide walks through it.

Or book a free 30-minute call to talk through a lab offer you've received (we'll tell you what to ask your attorney).

Questions

Does EKRA apply to labs?

Yes. 18 U.S.C. 220 names laboratories alongside recovery homes and clinical treatment facilities, and it applies to every payer, including commercial insurance. Paying or receiving anything of value for referring specimens to a lab can be a federal crime.

Can a lab give our program free drug test cups?

Instant cups for your own in-house testing are supplies you'd otherwise buy, so receiving them free from the lab you send confirmations to is a thing of value. Buy your own. Supplies needed only to collect and ship that lab's specimens are a different question for your attorney.

Can a lab pay us a collection or handling fee?

Treat a per-specimen payment from a lab as a red flag: money that grows with the number of specimens you send looks like pay for referrals under EKRA and the Anti-Kickback Statute. Decline it and ask counsel about anything similar.

Can our medical director own part of the lab we use?

That raises Stark if Medicare patients' tests are involved, plus the Anti-Kickback Statute and EKRA. Don't set it up, and if it already exists, have a health-care attorney review it now.

Does the lab need a Part 2 agreement with us?

If you're a Part 2 program sending SUD records to the lab, a qualified service organization agreement lets the lab receive them for its service and binds it to Part 2, alongside the HIPAA business associate agreement.

Sources

• 18 U.S.C. 220, Eliminating Kickbacks in Recovery Act (EKRA): Cornell LII
• HHS-OIG, fraud and abuse laws; exclusion list
• 42 CFR 1001.952, Anti-Kickback Statute safe harbors: eCFR
• CMS, physician self-referral (Stark) law
• Texas Occupations Code chapter 102, Solicitation of Patients
• eCFR, 42 CFR Part 2 (qualified service organizations)