Overview
Contingency management (CM) is an evidence-based public health intervention that can be effective in the treatment of some substance use disorders. It boils down to a simple idea: give people money to refrain from drug use. Despite the evidence and publicity, CM has largely not been implemented at-scale, largely due to perceived legal barriers. In recent years, however, the tide has turned and there is now better guidance on crafting effective and lawful CM programs.
Contingency management (CM) is an evidence-based public health intervention that can be effective in the treatment of some substance use disorders. It boils down to a simple idea: give people money to refrain from drug use. Put more scientifically: CM “is a behavioral therapy, based on operant conditioning principles, that provides tangible reinforcers for evidence of behavior change.” In the substance use disorder treatment context, “it most often involves delivery of monetary-based reinforcers for submission of drug negative urine samples.”
The effectiveness of CM has been demonstrated over decades of research, which shows that it works across substance use disorders and patient populations and is compatible with other forms of treatment, such as psychotherapy or pharmaceutical treatment. CM has received public attention for years as a simple and effective—and attention-grabbing—policy action.
From a harm reduction perspective, views on CM are mixed. CM typically treats abstinence as an end in itself, contrary to harm reduction principles. However, where CM is voluntary, non-punitive, and patient-centered, it can serve as a form of harm reduction for a person who chooses to pursue treatment for a particular substance use disorder.
Despite the evidence and publicity, CM has largely not been implemented at scale due to perceived legal barriers. In the early 2000s, the Department of Health and Human Services Office of Inspector General (HHS OIG) concluded that monetary incentives provided by medical providers, including those used in CM-based treatment, could violate federal laws like the federal Anti-Kickback Statute and certain penalty provisions of the Social Security Act applicable to Medicare and Medicaid.
HHS OIG concluded that only “nominal” gifts were clearly legal, interpreted as up to $10 per instance and $50 annually per patient (raised in 2016 to $15 and $75), “an amount that many treatment practitioners consider too small to be effective” for CM purposes. This interpretation became binding as to Medicare and Medicaid and in the use of HHS funds, and it effectively chilled the practice more broadly. Ever since, “there is widespread reluctance in the United States to employ [CM].”
In recent years, however, the tide has turned. In 2020, HHS OIG issued new guidance that “addressed several ‘misunderstandings’ about the effect of prior OIG guidance” and emphasized “case-by-case evaluation” of CM programs. In 2021, the Office of National Drug Control Policy named CM interventions as a policy priority, and in 2022, HHS OIG issued an advisory opinion concluding that a private sector provider’s CM program would not violate the Anti-Kickback Statute, despite exceeding the nominal gift cap, because of a lack of criminal intent. Then, in January 2025, SAMHSA reversed its prior “nominal gift” limitation, allowing SAMHSA funds to be used for CM activities up to $750 annually (albeit only in the form of non-cash monetary incentives).
At the state level, following this “greater assurance that these programs do not per se violate federal law,” several states have implemented CM programs as a Medicaid benefit via Section 1115 Medicaid waivers. California led the way in 2023, launching a first-in-the-nation CM program for Medicaid recipients with cocaine or methamphetamine use disorders.
Delaware, Hawaii, Montana, Washington, and West Virginia also obtained Section 1115 waivers for CM programs. At the local level, in August 2025 New York City announced a $27 million investment in expanding substance use disorder treatment, including a CM-based pilot program for patients with substance use disorders being discharged from City emergency programs.
The Trump administration has not indicated whether it will take any further action to support CM interventions for substance use disorders. Nevertheless, these recent developments mean there are now fewer legal barriers to CM implementation, and providers now have better guidance on crafting effective and lawful CM programs.
This post was written by Michael Abrams, J.D., Senior Attorney, Network for Public Health Law—Harm Reduction Legal Project.
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