Pay your rehab marketing agency a flat fee for its services, and pay for ad media at cost. Never pay per admit, per patient, or as a share of what you bill. Federal law (EKRA) makes paying for referrals to a treatment facility a crime, with fines up to $200,000 and up to 10 years in prison "for each occurrence." This guide covers the legal basics in plain words, the pricing models to refuse, what public data says about marketing budgets, and how to score agency quotes.
Not legal advice. This is operator guidance with links to the statutes and to attorney commentary. Have healthcare counsel review every marketing services agreement before you sign it.
The law in plain words
EKRA (18 U.S.C. Section 220)
EKRA makes it a federal crime to pay or offer "any remuneration ... to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory." Three points matter for marketing deals:
- It reaches private insurance. EKRA covers services paid by a "health care benefit program." Federal law defines that as "any public or private plan or contract" that provides medical benefits. So commercial insurance is covered, not just Medicare and Medicaid.
- Staff pay can't vary with referrals. The employee exception applies only if pay "is not determined by or does not vary by" the number of people referred, the number of procedures, or the amount billed.
- Marketers are covered. In 2025 the Ninth Circuit held "EKRA applies to payments made to marketing intermediaries", even when they never talk to patients.
EKRA also has an exception for agents paid under a contract that meets the personal services safe harbor in 42 CFR 1001.952(d). Attorneys at Liles Parker sum up the test: "the pertinent issue is how the marketer is paid. If the compensation varies with admissions or referrals, it violates EKRA."
Anti-Kickback Statute (42 U.S.C. Section 1320a-7b)
The AKS covers "Federal health care program" patients: plans funded by the US government, plus state health care programs. Its employee exception is broader than EKRA's. It protects "any amount paid by an employer to an employee ... for employment in the provision of covered items or services." Don't assume an AKS-safe pay plan is EKRA-safe.
State patient brokering laws
- Florida (Section 817.505) bans paying "a commission, benefit, bonus, rebate, kickback, or bribe ... to induce the referral of a patient". It is a third-degree felony with a $50,000 fine. That rises to $100,000 when 10 to 19 patients are involved, and to a first-degree felony and $500,000 at 20 or more.
- California (SB 1228, 2018) bars licensed programs from "giving or receiving compensation or anything of value for the referral of a person who is seeking addiction treatment services". Penalties include loss of license.
- New Jersey (2025) made SUD patient brokering a third-degree crime with 3 to 5 years in prison and a $50,000 fine. Payments that don't vary with referrals, service volume or a patient's benefits are exempt.
A flat fee on paper is not enough
In 2025 an Orange County treatment owner got 41 months in federal prison under EKRA. He used "sham contracts which purportedly required fixed payments", while the real payments tracked patients' insurance and billed days. What you really pay is what counts.
What is the compliant pricing structure?
A flat monthly fee for agency services plus ad media at cost. You pay the agency for work: strategy, campaign management, creative, content, reporting. You pay Google and Meta for ads. You pay no one for a patient.
- Agency fee: fixed and set in advance. Liles Parker advises that pay be "fixed in advance, commercially reasonable, and not tied to resident volume or value of referrals."
- Media: paid at cost, with the real Google Ads and Meta invoices shared every month.
- Contract: a defined term, a written scope, and an out clause.
- Counsel: your healthcare attorney reviews it before signing.
Which pricing models should you refuse?
1. Cost per admit
The agency bills a set amount for each admitted patient. Liles Parker: "per-head, per-admission, percentage-based, or success-fee compensation tied to resident referrals is the core conduct that EKRA targets." Walk away.
2. Retainer plus a per-admit bonus
Calling it a bonus or success fee changes nothing. The payment still varies with the number of people referred.
3. A share of patient revenue
EKRA's employee exception fails if pay varies with "the amount billed to or received from" the health plan. A revenue share does exactly that.
4. Per-lead or per-call pricing
We found no court ruling on pay-per-call for treatment centers by name. Our read: the risk rises when the price depends on the caller being insured, verified, or likely to admit. Florida's exception for referral information services requires fees "set in advance" and "not based on the potential value of a patient". The NAATP ethics code says members "may not engage in the buying and selling of patient leads including phone calls." Track cost per VOB as a metric. Don't pay on it.
5. The agency owns your phone line or intake
Some vendors put their own number in your ads, screen callers in their call center, and pass "qualified" patients on. That makes the vendor a referral middleman. LegitScript bars "any formal or informal business affiliation with, lead generators", including "sponsoring or answering the hotline for a lead generator." Own the number. Own the CRM. Own the intake team.
RehabAdmit's model: a flat monthly fee for our services plus media passed through at cost. Your business owns the Google Ads account, the Meta business account, and the phone number in every ad. Your intake team takes the call.
What public data says about marketing budgets
We found no survey with a disclosed sample on what treatment centers spend on marketing. The best public numbers come from annual reports that American Addiction Centers (AAC Holdings) filed with the SEC.
| Year | AAC advertising and marketing, % of revenue | Source |
|---|---|---|
| 2013 | 11.7% | 2015 10-K |
| 2014 | 11.8% | 2015 10-K |
| 2015 | 9.8% | 2017 10-K |
| 2016 | 6.5% | 2017 10-K |
| 2017 | 3.9% | 2018 10-K |
| 2018 | 4.6% | 2018 10-K |
Read this with care. AAC owned directory sites such as Rehabs.com and Recovery.org, so it generated much of its own traffic. Our read: an advertising line likely leaves out sales and call center payroll, so the full cost was higher. AAC said spending fell in 2017 from "reducing television advertising and focusing on optimizing more efficient and cost-effective advertising platforms, including AAC owned websites."
Our math, for scale only: a center with $5M in revenue at AAC's 2018 rate of 4.6% would spend $5M × 4.6% = $230,000 a year, about $19,200 a month. At AAC's 2014 rate of 11.8%, it would spend $590,000 a year, about $49,200 a month. These are not targets. A single center without owned directories will likely need a higher share.
Add LegitScript to year one. A facility in the 1 to 9 tier pays a $1,595 application fee and a $3,095 annual fee. Our math: $1,595 + $3,095 = $4,690 in year one, before any ad spend.
Operational red flags
1. Guaranteed admits or leads
Real agencies quote ranges and explain them. A promise of a fixed number of admits often means bought calls, which brings back the per-call questions above.
2. No admin access to your ad accounts
The Google Ads account should belong to your business, with the agency added as a user. Google Ads has Email-only, Billing, Read-only, Standard and Admin access levels. Keep Admin on your side. Do the same with your Meta business account.
3. Undisclosed media markup
If the agency won't separate its fee from media, ask why. Insist on the real platform invoices every month.
4. Long contracts with no way out
A long term with no termination clause locks you in if results don't come. Negotiate a termination-for-convenience clause.
5. No HIPAA business associate agreement
If the agency receives, stores or sends patient information for you (intake forms, call recordings, CRM records), HIPAA treats it as a business associate. You need its assurances documented "through a written contract" before campaigns go live.
Specialist or generalist agency?
Skill at ads is common. Knowledge of EKRA, state brokering laws and LegitScript is not. Test it in the first call. Ask how they price, who owns the accounts, and what they do if a vendor offers to sell you calls. Compare specialists in our rehab marketing agencies compared 2026 guide.
The 10-criterion scoring rubric
The first three lines are pass or fail. Fail any one and the agency is out. Score the other seven from 1 to 5.
| Criterion | What "5" looks like |
|---|---|
| Pricing structure (pass/fail) | Flat fee plus media at cost. No per-admit, per-patient, per-call or revenue-share pricing anywhere. |
| Counsel review (pass/fail) | Happy for your healthcare attorney to review the contract. Talks plainly about EKRA and state brokering laws. |
| HIPAA BAA (pass/fail) | Signs a real BAA before touching patient data. |
| Behavioral health focus | Treatment center clients, case studies with real numbers, LegitScript knowledge in the first call |
| LegitScript record | Can explain how it keeps client sites and ads within LegitScript standards. Will review your site. |
| Media transparency | Media at cost, real invoices every month, no markup |
| Account ownership | Accounts in your name, Admin access yours, your phone number |
| Reporting | Weekly dashboard. Cost per VOB and cost per admit tracked as metrics, never as payment triggers. |
| Contract terms | Defined term, termination for convenience |
| References | Current clients who will take a reference call |
Our math: 7 scored criteria × 5 points = 35 possible. Compare totals only among agencies that pass all three filters.
What should you negotiate?
- Term: shorter if the vendor is new to you
- Out clause: termination for convenience after an agreed point
- Fee: ask what scope changes would lower it
- Media ramp: phase spend in as tracking proves out
- Reporting: cost per VOB and cost per admit, not just cost per lead
Not negotiable: media at cost with real invoices, your ownership of accounts and phone numbers, and a flat fee that does not move with admits.
Comparing agency quotes? Get a compliance-first review.
RehabAdmit runs free scope-and-pricing reviews for treatment center operators comparing agency proposals. We flag EKRA and state patient brokering exposure in the pricing, and show what's included, what's not, and where costs hide. 45 minutes, no obligation, no pitch unless you ask.
Book a free quote reviewOne-time costs in month 1
Legitimate first-invoice items, each priced as a flat fee for the work:
- Setup and audit: intake interviews, funnel audit, competitor review, keyword research, GBP review
- Landing pages: only if your current pages don't convert
- CRM and call tracking setup: only if you lack an admissions CRM
- Creative: ad creative, landing page copy, first content
- LegitScript, paid to LegitScript: new applicants pay the application fee, then the annual fee once approved. An extra $2,500 buys expedited review. Not an agency fee.
What month 1 should not include: guaranteed volume, guaranteed rankings, or guaranteed admits.
Frequently asked questions
Is pay-per-admit rehab marketing legal?
It is a serious legal risk, and we advise against it. EKRA makes it a federal crime to pay any remuneration to induce a referral to a clinical treatment facility, with fines up to $200,000 and up to 10 years in prison for each occurrence, and its exception for employees and contractors only protects pay that doesn't vary with the number of referrals. It covers private insurance, not just Medicare and Medicaid. Florida, California and New Jersey have their own patient brokering laws. Not legal advice. Ask healthcare counsel.
Is pay-per-lead or pay-per-call rehab marketing legal?
We found no court ruling on per-call pricing for treatment centers by name. Our read: risk rises when the price depends on the caller being insured, verified or likely to admit. Florida's referral-service exception requires fees set in advance and not based on the potential value of a patient, and the NAATP ethics code bars members from buying leads, including phone calls. Track cost per VOB as a metric, not a payment trigger.
What is the compliant way to price a rehab marketing engagement?
A flat monthly fee for agency services plus ad media at cost, with real platform invoices shared monthly. The fee is set in advance and does not change with admits, leads or patients. Attorneys describe the safe structure as pay fixed in advance, commercially reasonable, and not tied to referrals. Have healthcare counsel review the contract before signing.
How much should a rehab center budget for marketing?
We found no survey with a disclosed sample. The best public data is American Addiction Centers' SEC filings: advertising and marketing ran 4.6% of revenue in 2018 and 11.8% in 2014. AAC owned its own directory sites, so a single center will likely need a higher share. Add $4,690 in year-one LegitScript fees for one facility.
Can we pay intake staff a bonus per admission?
No. EKRA's employee exception applies only if pay is not determined by or does not vary by the number of individuals referred or the amount billed. The broader AKS employee exception does not fix that. Pay salaries. Track cost per admission internally.
What are the top red flags in a rehab marketing agency proposal?
Any pricing tied to admits, patients, calls or revenue. No Admin access for you on your ad accounts. Media markup that isn't disclosed. A long contract with no out clause. Guaranteed admits. No HIPAA business associate agreement. A vendor that wants its own phone number in your ads.
Should I hire a specialist behavioral health agency or a generalist?
Pick the one that passes the compliance test. Ask in the first call how they price, who owns the accounts and the phone number, and how they handle LegitScript. Compare specialists in our rehab marketing agencies compared 2026 guide.