Laboratory EHR Kickbacks: When Software Carries the Kickback

Laboratory EHR kickbacks use software subsidies, free technology services or payments to an electronic health record vendor to buy laboratory referrals. The benefit can reach the physician choosing the lab or the software company recommending it. If you worked on the donation approvals, consulting invoices or vendor relationship, you may have seen the bargain before it became a test order. The software bill and the laboratory’s sales figures belong in the same conversation.

Do Doctors Get Kickbacks for Ordering Tests?

Doctors can receive laboratory kickbacks through software subsidies and free or discounted technology consulting. A laboratory can also pay a software vendor to recommend its testing services. Those are different paths to the same commercial objective: the physician’s laboratory business.

The Department of Justice’s account of Modernizing Medicine describes both sides of an alleged arrangement. Modernizing Medicine, known as ModMed, allegedly received money from Inform Diagnostics, then called Miraca Life Sciences, for recommending its pathology services. The companies also allegedly worked together to donate software to health care providers to increase laboratory orders for Miraca while adding software customers for the vendor.

The laboratory wanted orders. The vendor wanted users. Under the government’s allegations, a donation could serve both businesses at once, with the referring practice receiving the technology. The government alleged that Miraca paid ModMed for laboratory recommendations. It alleged that the arrangement caused providers to submit false claims to the federal government for pathology services and software incentive payments, at taxpayers’ expense.

For an insider, the distinction is who supplied the value, who received it and what business was expected in return. A vendor payment points toward the recommendation agreement and the people managing it. A physician subsidy points toward the approval decision and the business that physician sent to the laboratory. The payment may sit in a technology budget while its purpose sits in a sales discussion.

Why the Electronic Order Matters

An electronic laboratory order connects a physician’s decision with the laboratory that performs the test and bills for it. The treating clinician holds the patient information supporting the need for the test. The laboratory depends on that order and documentation even though it earns the testing revenue.

The industry’s infrastructure shows why access to those decisions has commercial value. In its 2025 annual report, Quest Diagnostics described interfaces to more than 1,000 electronic health record systems. Those connections sit alongside its courier network and patient access locations. Software is part of how laboratory business reaches the testing operation.

That makes the ordering relationship worth examining alongside the price of the software. We look at who chose the laboratory, what the clinician ordered, what the laboratory performed and what it billed. A payment agreement explains the commercial incentive. The order and claim help connect the business arrangement to patient care and government billing.

Laboratory Software Payments in the Civil Cases

The civil cases describe physician benefits, volume-based donations and vendor payments as alleged ways to purchase access to laboratory orders.

Inform Diagnostics and Technology Consulting

Inform Diagnostics, formerly Miraca Life Sciences, agreed to a $63.5 million settlement in January 2019 over alleged inducements to referring physicians. The government’s settlement announcement described subsidies for electronic health record systems and free or discounted technology consulting services.

The consulting matters as much as the software. A practice can receive value through work someone else pays for, as well as through a reduced purchase price. The government’s allegations under the Anti-Kickback Statute and Stark Law reached both kinds of benefit.

For someone who worked on those arrangements, the invoice is a starting point. We examine what the practice received and why the laboratory paid. The approval correspondence can connect the technology work to the referring account.

Bio-Reference and the Donation Formula

Bio-Reference Laboratories agreed to an $11,500,960 settlement in September 2020 that included allegations about donating electronic medical records software. According to the Department of Justice’s announcement, the laboratory based those donations to physicians’ offices solely on the volume of business generated.

The formula is the point. The government’s allegation tied the software benefit directly to laboratory business. An eligibility decision built around referrals gives the subsidy a purpose that the word donation leaves out.

Who qualified, who approved the benefit and which measure of business they used are more revealing than the heading on the agreement.

Modernizing Medicine and the Paid Recommendation

Modernizing Medicine agreed to pay $45 million in November 2022 to resolve allegations involving kickbacks and false claims. The government alleged that the vendor solicited and received payments from Miraca in exchange for recommending and arranging its users’ use of Miraca’s pathology services.

The alleged joint software donations connected the companies’ sales efforts. Miraca stood to receive laboratory orders, and ModMed stood to gain users. The government alleged that the conduct caused providers to submit false claims for pathology services and federal software incentive payments.

A former vice president of product management brought the whistleblower case, which the government joined. The Department of Justice announced that the whistleblower would receive approximately $9 million. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Evidence Is Needed to Prove Fraud?

The evidence connects the software benefit to the referral decision and the claims that followed. We compare the agreement, actual payment, approval criteria, recommendations, orders and billing records to understand what the arrangement bought.

An invoice may describe consulting work while the sales correspondence explains the referrals expected in return. The person who approved the benefit and the person who implemented the ordering system may hold different parts of that account. We work with insiders to connect those decisions to the tests performed and the government claims, bringing in laboratory fraud whistleblower lawyers who understand the payment arrangement.

When the Laboratory Choice Is Changed

A whistleblower complaint involving Surgery Partners describes how an intended laboratory referral could be overridden inside a practice. The allegation shows why changes to an order matter as much as the order eventually sent.

The whistleblower alleged:

The complaint also alleged that Surgery Partners manipulated its electronic patient-risk classification tool to put more patients in a high-risk group and justify more frequent urine drug testing.

These allegations put the practice’s use of the system in view. For an EHR referral inquiry, the comparison is the clinician’s decision against the order that reached the laboratory. The saved result may show where the specimen went. The changes and instructions can explain who directed it there.

You Know What the Software Deal Bought

If you saw a software subsidy or vendor payment tied to laboratory business, speak with our whistleblower experts about that arrangement. We work with you to build your strongest laboratory kickback whistleblower case around the benefit, the referral decision and the claims, and bring in laboratory fraud whistleblower lawyers who understand healthcare technology arrangements. We stay beside you from the first assessment through the case.