Since its enactment in 2018, the Eliminating Kickbacks in Recovery Act (EKRA) has rapidly gained momentum as a powerful tool against healthcare kickbacks. By 2020, the US Department of Justice (DOJ) had already secured its first EKRA conviction. This relatively young law, aimed at curbing patient brokering in laboratories, recovery centers, and treatment facilities, carries hefty penalties and, unlike older statutes, applies even to services billed to private insurance.
Now, a landmark appellate decision issued on July 11, 2025, by the US Court of Appeals for the Ninth Circuit has confirmed the force of EKRA and clarified how far its anti-kickback provisions reach. The Ninth Circuit is recognized by sister circuits for its significant caseload and influential decisions. Accordingly, as a first of its kind at the appellate level, the Ninth Circuit’s decision will likely influence future EKRA cases.
United States v. Schena
The Schena case involved the owner of a clinical lab in California, who was convicted of paying commission-based fees to marketers for patient referrals. On appeal, Schena argued that EKRA didn’t apply because he paid marketers, not physicians or patients directly. The Ninth Circuit disagreed, holding that EKRA “covers marketing intermediaries who interface with those who do the referrals” and does not limit liability to only those who directly refer patients.
Importantly, the court also clarified that percentage-based compensation isn’t per se illegal. It becomes unlawful when it crosses into undue influence or deception, such as misleading physicians or taking control over their clinical decision-making. As the court put it, “We do not think the mere fact of a percentage-based marketing arrangement, without more, would constitute a per se violation of EKRA.” In Schena’s case, however, he directed his marketers to mislead physicians into making referrals—crossing the line from lawful promotion into illegal inducement.
The Evolution of EKRA
As opioid abuse and kickbacks in recovery settings simultaneously rose in the early 2000s, congressional action was urgently needed. In 2018, with bipartisan support, the US Congress enacted the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the SUPPORT Act).
Several provisions of the SUPPORT Act are directed toward making treatment more accessible to vulnerable populations. EKRA serves a different, but equally important, purpose—to combat patient brokering and recovery profiteering, which had increased with the rise in opioid addiction.
Although EKRA was modeled after the federal Anti-Kickback Statute (AKS), there are important distinctions. For instance, EKRA is broader in scope. The AKS applies only to referrals involving federal healthcare programs (e.g., Medicare), but EKRA applies to any healthcare benefit program, including private insurance and cash-pay patients. Additionally, EKRA has fewer safe harbors than the AKS and notably does not protect volume-based or commission-based compensation for employees or contractors—even if they are W-2 employees. Thus, arrangements that might be lawful under the AKS may still violate EKRA.
Takeaway for Labs, Physicians, and Recovery Centers
The Ninth Circuit decision offers clarity and a cautionary note for healthcare stakeholders:
- Marketing arrangements must preserve provider independence. If marketers are effectively directing referrals, the arrangement likely violates EKRA.
- Deceptive or manipulative tactics are red flags. Misleading marketing claims or bundling unnecessary services may trigger EKRA scrutiny.
- Commission-based pay is risky. The safest path is using fixed salaries or bonuses tied to non-referral metrics (e.g., quality improvement).
- Compliance programs should address EKRA directly. Don’t assume AKS compliance is enough—EKRA stands on its own.
Schena made clear that there are no loopholes in the law—the court emphasized that indirect referral schemes via marketers can violate EKRA. DOJ is moving with alacrity, too, with more settlements and court decisions occurring each year. Without more compliance focus on EKRA, EKRA violations and follow-on enforcement action are likely to increase in the coming years.