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The New Jersey patient brokering amendment, signed August 11, 2025, now applies to all clinical laboratories, not just substance use disorder facilities. It prohibits remuneration tied to referral volume, including kickbacks routed through third parties. Violations are third-degree crimes with up to five years’ imprisonment and mandatory $50,000 fines, plus civil penalties up to $20,000 per violation. New Jersey’s safe harbor is narrower than federal EKRA; only flat-fee arrangements unrelated to patient volume, service duration, or insurance benefits qualify.
Labs must audit referral-linked compensation, document fair market value, and train staff on prohibited conduct. Partnering with a New Jersey lab billing expert like TransLabs adds compliance-first workflows, regulatory monitoring, and audit-ready documentation, reducing legal exposure and protecting revenue.
On August 11, 2025, New Jersey signed two bills into law, A3973/S3952 and A3974/S3955, together known as P.L. 2025, c. 121. This legislation reworked New Jersey Statute § 2C:40A-6, commonly referred to as the New Jersey patient brokering amendment.
Before this amendment, the law mostly targeted substance use disorder (SUD) treatment referrals. But now, it also targets clinical laboratories and recovery residences directly. And it’s not limited to just toxicology labs. If your lab runs biochemistry, genetics, microbiology, or pathology testing on human specimens and falls under CLIA, this law applies. That’s a big deal for anyone handling NJ clinical laboratory billing compliance, because referral-linked payments that felt routine a year ago could now trigger criminal exposure under the Eliminating Kickbacks in Recovery Act (EKRA).
However, you can manage all that with clean and EKRA-compliant laboratory billing services in New Jersey, which protect your laboratory from legal complications and revenue risks.
Before the 2025 amendment, New Jersey’s law, the N.J. Stat. Ann. § 2C:40A-6, applied only to covered substance use disorder treatment facilities, and liability was loosely tied to “any person.” Second-degree penalties were inconsistent, and there was no dedicated agency enforcement path.
Since the Acting Governor Tahesha Way signed the amendment on August 11, 2025, the law now covers SUD facilities, recovery residences, and all clinical laboratories. It explicitly names healthcare providers, facilities, and nonprofits as liable parties. Violations are treated as a third-degree crime, carrying up to five years of imprisonment and a mandatory $50,000 fine. In addition, NJ’s Department of Health and the Division of Consumer Affairs can suspend licenses and impose civil fines of up to $20,000 per violation.
The EKRA, codified at 18 U.S.C. § 220, is a federal criminal law passed in 2018. Unlike the federal Anti-Kickback Statute (AKS), which only covers government payers like Medicare and Medicaid, EKRA is an all-payor statute. It covers private commercial health insurance too, which is exactly why it heavily affects labs.
EKRA bans paying or receiving remuneration (cash, kickbacks, bribes, in-kind gifts, direct or indirect kickbacks, you name it) to induce referrals to a recovery home, clinical treatment facility, or laboratory. The penalties are stricter: up to $200,000 in fines and 10 years imprisonment per offense.
New Jersey’s amended statute borrows heavily from EKRA, so now labs operating across the Garden State essentially answer to two overlapping laws built on the same structure.
Now, if you’re wondering whether complying with EKRA protects your lab, that’s not the case. Your lab doesn’t automatically qualify for the EKRA compliance New Jersey standard. The state law is stricter in places, and it doesn’t come with the same safety nets. So, it’s important to maintain compliance with both.
The revised New Jersey anti‑kickback statute for labs now includes:
You might be wondering why the state has initiated this sudden crackdown. In February 2024, the New Jersey State Commission of Investigation released “The Dirty Business Behind Getting Clean,” a report that exposed deceptive referral schemes and urged lawmakers to close the gaps. The bill passed both chambers without a single “no” vote, which indicates how seriously Trenton is taking this.
| Entity | How the Law Touches Them |
|---|---|
| Clinical laboratories | Cannot pay or receive fees tied to referral volume |
| Ordering physicians | Cannot accept kickbacks for sending specimens to a specific lab |
| Marketing consortiums | Third-party referral networks are covered, even if they never touch a patient |
| Management Service Organizations (MSOs) | Indirect payment structures routed through an MSO still count as remuneration |
| Recovery residences | Now explicitly named alongside labs |
| Nonprofit organizations | No longer exempt just because they're not-for-profit |
The good news is that there is a narrow exception for NJ labs. New Jersey’s statute protects fees, commissions, or rebates that don’t vary based on:
In other words, a flat salary or a fixed consulting fee is generally fine, whether the person is a W-2 employee or a 1099 independent contractor. But the moment compensation tracks volume, it’s similar in nature to the volume-based compensation, and that’s precisely what the law is built to catch.
Here is an important point to note: New Jersey’s exception is thinner than EKRA’s. Federal law includes a formal employee safe harbor and other detailed exceptions modeled on the AKS. New Jersey doesn’t. So, a pay structure that clears federal muster doesn’t automatically clear the state bar too. It might not.
Does paying sales reps on percentage-based commissions automatically break EKRA? As of the July 2025 United States v. Schena decision, it doesn’t.
The Ninth Circuit ruled that a commission structure alone isn’t a per se EKRA violation. It falls into illegal conduct due to undue influence, for example, misleading physicians about whether a test is truly needed, or marketers deceptively directing samples to a specific lab. Courts have also made clear that EKRA applies to marketing intermediaries, not just those who directly deal with patients.
The takeaway for New Jersey labs is that even where percentage-based pay survives federal scrutiny, it still has to clear New Jersey’s stricter, less forgiving state standard. The same contract can lead to different outcomes for two different tests.
| Compliance Issue | Recommended Action |
|---|---|
| Paying marketers a straight percentage of collected revenue without an undue-influence review | Sales rep contracts need a second look. Any arrangement tied to test volume, specimen count, or revenue share is a red flag under NJ lab marketing regulations. |
| Treating 1099 contractors the same as W-2 employees for safe-harbor purposes without checking New Jersey’s narrower exception | Multistate labs need state-by-state mapping. Confirm New Jersey’s specific safe-harbor rules before applying federal or national standards. |
| Assuming a national compliance policy covers New Jersey automatically | Multistate labs need state-by-state mapping. A compensation model that is acceptable elsewhere may still be a third-degree crime in New Jersey. |
| Skipping documentation on why a payment reflects FMV rather than referral volume | Fair Market Value documentation matters more than ever. Keep contemporary records showing that any payment reflects genuine services rendered, not referral volume. |
| Failing to differentiate between legitimate marketing and prohibited remuneration | Third-party marketers must be vetted. Train billing and sales teams on New Jersey’s line between legitimate marketing and prohibited remuneration. |
| Compliance Actions | Why It Matters |
|---|---|
| Audit all referral-linked compensation | Flags anything tied to volume, duration, or insurance benefit amount |
| Rewrite marketer contracts to fixed-fee structures where possible | Fits New Jersey's narrow safe harbor |
| Document FMV for every marketing and consulting payment | Builds a defense record if regulators come asking |
| Train ordering-physician liaisons | Reduces risk of accidental kickback language in outreach |
| Track both EKRA and NJ statute updates | The two laws move independently and don't always align |
Keeping up with a state law rewritten in 2025, a federal statute that just got its first appellate interpretation, and the Department of Justice’s evolving stance on commissions is a full-time job. It’s just a lot to track on top of running a busy laboratory.
This is exactly where partnering with a dedicated lab billing partner like TransLabs pays for itself. Here’s how:
For labs dealing with questions related to legal lab sales commissions on top of routine claims work, handing billing to a team that already manages all that is the smartest proactive approach.
New Jersey didn’t just tweak an old statute. It rewrote the rules of engagement for lab referrals in the state. Between the third-degree crime classification, mandatory fines, and dual enforcement from prosecutors and state agencies, this is one of the toughest state-level kickback laws on the books right now.
But the good news is that compliance isn’t complicated once you know what to look for. Flat-fee marketing arrangements, solid FMV documentation, and a clear separation between billing and sales incentives keep most labs on the right side of the law. If that sounds like more than your team can manage, that’s exactly the gap a dedicated billing partner fills.