Patient brokering laws, explained for treatment program owners

The short answer: patient brokering is paying, or being paid, for patient referrals. For a Texas treatment program it is illegal under three overlapping laws: EKRA (18 U.S.C. 220; up to $200,000 and 10 years per occurrence, any payer), the federal Anti-Kickback Statute (Medicare, Medicaid and other federal programs) and the Texas Patient Solicitation Act (Occupations Code ch. 102; every payer, including self-pay). Per-admission pay for marketers, bought leads, free housing or travel for clients, and lab "fees" are the usual ways programs cross the line.

The one rule

Never offer, pay, ask for or accept anything of value in return for sending a patient to a provider or for a patient choosing one. "Anything of value" is far wider than cash: free or cheap rent, gift cards, flights, phones, meals, paid insurance premiums, a "consulting fee", a job, free staff or supplies from a lab, or a bonus that grows with admissions.

Patient brokering is the trade in people seeking treatment: a broker steers someone to whichever program or recovery home pays the most, often with free housing or travel as the bait, and the person's care comes last. It has done real harm in addiction treatment, and federal and state prosecutors treat it as health care fraud. In Texas, three laws overlap, and a single arrangement can break all three.

The three laws at a glance

Law	What it covers	Which payers	Maximum penalty
EKRA 18 U.S.C. 220	Paying or receiving anything of value for referrals to, or use of, a recovery home, a clinical treatment facility (a licensed non-hospital substance use treatment setting) or a laboratory	Any health care benefit program, so commercial insurance as well as Medicare and Medicaid	$200,000 and 10 years in prison, for each occurrence
Anti-Kickback Statute (AKS) 42 U.S.C. 1320a-7b(b)	Paying or receiving anything of value to induce or reward referrals of any item or service paid for by a federal health care program	Medicare, Medicaid, TRICARE and other federal programs	A felony: $100,000 and 10 years, plus exclusion from federal programs and civil penalties
Texas Patient Solicitation Act Texas Occupations Code ch. 102	Offering or accepting payment, or since September 1, 2025 any benefit or commission, to secure or solicit patients for a licensed health care provider	All, including self-pay	A Class A misdemeanor, a third-degree felony for a repeat offense; civil penalties up to $10,000 per violation

Professional licensing boards and insurance plans add their own consequences: a board can discipline a licensed counselor or physician, and a plan can terminate a contract or recoup payments for claims tied to a kickback.

EKRA: the one most programs don't know well enough

The Eliminating Kickbacks in Recovery Act (18 U.S.C. 220) became law in 2018 as part of the federal opioid package (the SUPPORT Act). It makes it a federal crime to knowingly and willfully solicit or receive any remuneration for referring a patient to a recovery home, clinical treatment facility or laboratory, or to pay or offer any remuneration to induce such a referral or in exchange for someone using their services, when the services are covered by a health care benefit program.

• It reaches private insurance. The Anti-Kickback Statute only covers federal programs, so for years a cash or commercial-insurance-only program could argue it wasn't covered. EKRA closed that gap for treatment facilities, recovery homes and labs.
• A licensed Texas IOP or PHP is a "clinical treatment facility". The statute defines it as a medical setting, other than a hospital, that provides substance use treatment under a state license or certification. A sober living home is a "recovery home". Any practice that sends urine drug tests to a lab is in a lab relationship.
• Its employee exception is narrower than the AKS's. Payments to a bona fide employee or contractor are excepted only if the pay doesn't vary by the number of individuals referred, the number of tests or procedures performed, or the amount billed or received. A commission plan that would be fine under the AKS employee safe harbor can still be a problem under EKRA. Courts have read this part differently, so ask your attorney before any bonus plan for anyone who touches admissions.
• The other exceptions are narrow (properly disclosed discounts, certain personal services and management contracts, certain copay waivers and a few others), and each has conditions. Assume a deal isn't excepted until your attorney says it is.

The federal Anti-Kickback Statute

The federal Anti-Kickback Statute makes it a felony to knowingly and willfully offer, pay, solicit or receive any remuneration to induce or reward referrals of items or services paid for by a federal health care program. Both sides of the deal are liable. In the OIG's words, violation is a felony punishable by a maximum fine of $100,000, imprisonment up to 10 years, or both. A conviction leads to exclusion from Medicare and Medicaid, and the HHS Office of Inspector General can also seek civil monetary penalties and exclusion without a criminal case.

Arrangements that fit a safe harbor in 42 C.F.R. 1001.952 are protected: for example, pay to bona fide employees, and personal services contracts with compensation set in advance at fair market value. Fitting a safe harbor means meeting every condition, in writing. If you take Texas Medicaid managed care, TRICARE or Medicare clients, the AKS applies to you.

The Texas Patient Solicitation Act

Texas Occupations Code chapter 102 makes it an offense to knowingly offer or agree to pay, or to accept, remuneration to or from anyone, directly or indirectly, overtly or covertly, in cash or in kind, for securing or soliciting patients or patronage for a licensed, certified or registered health care provider. In 2025 the Legislature (H.B. 4454) broadened it to "any benefit or commission", effective September 1, 2025.

• It applies whatever the payer. A self-pay client counts. So does a client whose care is paid by a commercial plan.
• It follows the federal safe harbors. Section 102.003 says the chapter permits any payment, business arrangement or payment practice that the federal Anti-Kickback Statute or its regulations permit. That doesn't make an arrangement safe under EKRA, which has its own exceptions.
• Advertising is allowed unless it's false, misleading or deceptive (Section 102.004, which the 2025 bill also amended to tie in the Texas law on treatment facility marketing practices). Paying a flat fee for an ad is different from paying for a patient.
• Disclosure. Section 102.006 makes it a separate offense for someone allowed to accept payment for soliciting patients to fail to disclose it as the statute requires.
• Treatment facility marketing. Texas Health and Safety Code chapter 164 (Treatment Facilities Marketing and Admission Practices; see Section 164.010) separately bars practices such as promising outcomes you can't back up, advertising services you don't offer yet, hiding a relationship with someone who solicits patients for you, and using confidential information to solicit. Ask your attorney how it applies to your license type.

The 2025 changes also created a state task force on patient solicitation, so expect more attention to this, not less. Check the current text of chapter 102 on the Texas Legislature's statutes site with your attorney before relying on any exception.

Common traps

Almost nobody sets out to buy patients. These are the arrangements that get pitched as normal business:

The arrangement	Why it's a problem	Do this instead
A "marketing" or business development rep paid per admission, or with a bonus tied to census	Pay that varies with referrals is the core of what EKRA prohibits, even for an employee	A fixed salary set in advance at fair market value. Counsel reviews any bonus plan before it starts.
Buying leads or calls from a call center or "admissions" service, priced per call, per lead or per admission	Paying per patient delivered is paying for referrals. Unbranded hotlines often send callers to whoever pays most	Run your own branded phone line and ads. Any vendor is paid a flat fee for defined work, in a written contract your attorney reviewed.
Free or cheap housing for clients who attend your program, or a sober home paid per resident it sends you	Rent is a thing of value. EKRA covers recovery homes by name	Residents choose their own treatment. Keep housing and treatment finances separate, with no rent tied to attending any program.
Paying for flights or travel to bring clients to your program	An inducement to choose you; LegitScript also refuses certification to programs that offer travel	Compete on care, speed of admission and fit. Ask counsel before offering any transportation help.
Lab kickbacks: a lab that pays "processing" or "collection" fees per sample, or gives you free staff, supplies or rent	Labs are named in EKRA, and drug testing has been a major enforcement focus	Pay the lab its fair price, accept nothing extra, and order tests based on clinical need written in the chart.
Paying a client's insurance premium, or waiving copays and deductibles as an enrollment perk	A thing of value given to win the patient, and insurance contracts often have their own rules on waivers	A written financial-hardship policy applied case by case, reviewed by counsel.
Gifts to referral sources: gift cards, tickets, meals for a therapist or case manager who sends clients	"Anything of value" includes small things; Texas covers any benefit	Thank-you notes, good outcomes and fast updates (with the client's consent). Ask counsel to set a written policy on any courtesy at all.
"Consulting", "medical director" or "management" fees to someone who also refers	Above-market pay, or pay for work not done, can be a disguised referral fee	Written agreements at fair market value for hours actually worked and documented.
Percentage-of-revenue marketing or billing contracts	A fee that grows with what you bill can look like pay for volume	Flat or hourly fees, or a structure your attorney approved in writing.
Referral swaps: "send us your step-downs and we'll send you our detox referrals"	An exchange of referrals can itself be remuneration	Refer on clinical need and the client's choice, and give each client real options.

Red flags in a sales pitch

New program owners get these calls within weeks of opening. Walk away, and tell your compliance lead, when you hear:

• "We can fill your census." "We have patients ready to go." "We'll send you X admissions a month."
• "You only pay when someone admits." Pay-per-admission or pay-per-head pricing, under any name.
• "We cover travel and housing so the client can come to you."
• "Our sober homes work with programs that support the house."
• "We'll give you a marketing fee for each sample you send." Free cups, free collectors or free staff from a lab.
• "It's legal because they're our employees" or "because it's commercial insurance." Neither is a defense under EKRA or Texas law.
• Any unbranded website or hotline that won't say which program answers the phone.

What a clean program does

These are the rules in the Referral, Marketing and Anti-Kickback Compliance Policy we write into every program's policy manual (it's part of our IOP / PHP Program Launch) and follow in our own program:

1. A written policy that bans anything of value for referrals, signed by every staff member and marketer at hire and every year after training.
2. Counsel reviews first. Every new referral relationship, marketing vendor, lab contract and pay plan goes to your compliance lead and your attorney before it starts. Every one is in writing.
3. Fixed pay for anyone near admissions, set in advance at fair market value, never tied to admissions, census, tests or dollars billed.
4. Honest, branded marketing: your real name, location, services and credentials, and no promised outcomes. Every website, ad and phone line clearly names the program.
5. Admission on clinical need. Admission decisions rest on clinical criteria (ASAM-based for substance use), never on a referral source or a payment. Clients who don't fit get referred to a program that does.
6. Say no and report. Anyone offered something for a referral declines and tells the compliance lead the same day, with no retaliation for reporting.
7. Monthly exclusion checks on staff and contractors against the OIG exclusion list and the Texas Medicaid list, and a regular look at where admissions come from, so an odd pattern shows up early. A regular chart audit also catches drug tests ordered without a documented clinical reason.

For how to build referrals the right way, see marketing a treatment center legally. For ads, LegitScript certification is the gate on Google and Meta.

If you're already in a bad deal

• Stop new payments and referrals under it, and call a health-care attorney before you do anything else. Don't just quietly end it and hope.
• Keep every record. Don't delete emails, texts or invoices.
• Your attorney will look at what happened, which laws and payers are involved, and whether to make a self-disclosure to the government or refunds to plans. That's a legal decision, not one to make alone.

Why we never refer patients

People ask us, "Can you send us patients?" No. We don't refer patients to consulting clients, we don't take referrals in exchange for anything, and no consulting deal touches patient referrals in any way. Our own program refers clients only on clinical need and the client's choice, apart from any business relationship. We charge flat fees for defined work, never a percentage of what you bill or a fee that grows with patient volume, because in addiction treatment a fee tied to volume can look like payment for referrals. What we will do is help you build referrals the honest way: real outreach, good care, fast intake and clear updates to the people who refer.

Questions

Is it legal to pay for Google ads or a directory listing?

Generally yes. Paying a flat or per-click price to advertise your own program is advertising, which Texas law allows unless it's false, misleading or deceptive. Paying a third party per admission or per patient delivered is different. Addiction treatment ads on Google and Meta also need LegitScript certification.

What's the difference between EKRA and the Anti-Kickback Statute?

The AKS covers referrals for anything paid by federal health care programs and has many regulatory safe harbors, including one that protects commissions to bona fide employees. EKRA covers only recovery homes, clinical treatment facilities and labs, but it applies to private insurance too, and its employee exception excludes pay that varies with referrals, tests or amounts billed. A program with commercial clients has to meet the stricter of the two.

Is patient brokering a felony in Texas?

Under the Texas Patient Solicitation Act it's a Class A misdemeanor, and a third-degree felony for someone with a prior conviction under that section or who was a government employee at the time. Separately, EKRA and the Anti-Kickback Statute are federal felonies, and the state can seek civil penalties of up to $10,000 per violation.

Can I pay my outreach staff a bonus?

Not one that rises with referrals, admissions, census, tests or revenue. EKRA's employee exception requires pay that doesn't vary with those things. A fixed salary at fair market value is the safe default; any other bonus plan should be written and approved by your attorney before it starts.

Does EKRA apply to a solo therapist or a group practice?

EKRA covers recovery homes, licensed substance use treatment facilities and laboratories. A therapy practice usually isn't a "clinical treatment facility", but any lab relationship (drug testing, for example) is covered, and the Texas Patient Solicitation Act applies to every licensed provider, whatever the payer.

My program is self-pay only. Do these laws still apply?

The Texas Patient Solicitation Act does, regardless of payer. EKRA applies when the services are covered by a health care benefit program. Many self-pay clients have insurance that covers some of the care, so don't build a business model on the assumption that a law doesn't reach you; ask your attorney.

Can I take a referral source to lunch?

Meals and gifts are things of value, and the laws don't set a dollar amount below which a gift to a referral source is safe. Ask your attorney to set a written policy, and default to a thank-you note and excellent communication about shared clients, sent with the client's written consent under 42 CFR Part 2.

Can a recovery home and a treatment program work together?

Yes, on clinical grounds: a program can recommend certified recovery homes, and a home can recommend treatment, as long as no money, free rent or other benefit moves with residents in either direction and residents choose freely. Our sober living guide covers the house side.

Is Cima Consulting giving legal advice here?

No. We're operators, not a law firm. We write the policy, train the staff and flag the arrangements that need a lawyer; your health-care attorney decides whether a specific arrangement is legal.

Opening a program? The IOP / PHP Program Launch puts the referral rules on the roadmap before any marketing starts. See also how to start an IOP or PHP in Texas.

Sources

• 18 U.S.C. 220, Illegal remunerations for referrals to recovery homes, clinical treatment facilities, and laboratories (EKRA): Cornell LII
• Haynes Boone, Differences and similarities between the AKS and EKRA; Dorsey & Whitney, EKRA: a new federal kickback law applicable to all payors
• HHS Office of Inspector General, Special Fraud Alert (AKS penalties and exclusion); safe harbors at 42 C.F.R. 1001.952
• Texas Legislature, Occupations Code chapter 102, Solicitation of Patients; Section 102.010 (civil penalty)
• Texas Legislature, H.B. 4454 (2025) bill analysis
• Texas Health and Safety Code, Section 164.010, prohibited marketing acts
• LegitScript, Addiction Treatment Certification (travel incentives and eligibility)