The Department of Justice is actively prosecuting kickback arrangements in the lab and diagnostic space, including payments disguised as consulting or medical director fees, according to an April 24 post from law firm ArentFox Schiff.
In 2025 alone, the department charged 49 defendants connected to over $1.1 billion in fraudulent claims tied to telemedicine and genetic testing, underscoring the scale of federal enforcement activity.
Here are nine things to know:
1. Accepting volume- or value-based payments from labs or testing companies in exchange for referrals violates the Anti-Kickback Statute and can trigger False Claims Act liability.
2. According to the report, the Eliminating Kickbacks in Recovery Act extends kickback liability beyond Medicare and Medicaid to private payer arrangements as well, so providers cannot assume private-pay relationships are safe.
3. In 2025, the 9th Circuit Court of Appeals issued its first appellate ruling interpreting EKRA, expanding the law’s reach and signaling that courts are now actively shaping how the law is enforced.
4. Medical necessity must be established and documented before ordering any test, not merely inferred after the fact or assumed based on a potential diagnosis.
5. Ordering specialized tests like cancer genetic testing, cardiovascular genetic testing or transcranial doppler ultrasounds without proper clinical justification carries serious legal risk, even if a lab or marketer encourages the order.
6. Providers can face personal criminal liability, not just civil settlements, for participating in kickback schemes or submitting false claims.
7. Aggressive or misleading marketing by a lab’s sales force does not shield the ordering provider, the report said. If a test lacks medical necessity, the provider who signs the order bears responsibility.
8. Percentage-based commissions paid to independent marketing contractors are high-risk, particularly when marketers target less sophisticated providers or misrepresent testing capabilities. If a marketer is pushing a provider toward a test, that sales relationship itself may be legally problematic.
9. Before ordering any specialized or genetic test, the report said, providers should independently verify that the patient meets Medicare or Medicaid coverage criteria and that the correct billing codes apply.
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