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1 min read Bail

PART 6: The Business of Bail Reform - Who Profits When Commercial Bail Dies

The pretrial drug testing industry—led by Averhealth, Cordant Health Solutions, and Redwood Toxicology Laboratory—has grown alongside bail reform, with 77% of pretrial programs including drug testing by 2009, and drug court testing increasing 11.7% in 2023 alone.
PART 6: The Business of Bail Reform - Who Profits When Commercial Bail Dies

Drug testing providers secured millions as requirements expanded

By JL Fullerton

The pretrial drug testing industry—led by Averhealth, Cordant Health Solutions, and Redwood Toxicology Laboratory—has grown alongside bail reform, with 77% of pretrial programs including drug testing by 2009, and drug court testing increasing 11.7% in 2023 alone.

These providers have faced serious fraud allegations. In 2023, Averhealth paid $1,344,621 to settle DOJ False Claims Act allegations that it submitted improper drug test claims to Michigan's Department of Health and Human Services. A whistleblower—former lab director Dr. Sarah Riley—received $228,586 from the settlement after testifying that up to 30% of results reported to Michigan's child welfare agency were wrong. The College of American Pathologists placed Averhealth on probation in early 2021 after substantiating allegations of manipulated calibration instruments.

Cordant Health Solutions paid $11,942,913 in 2020 to resolve allegations of paying millions in kickbacks for urine testing referrals, plus $845,108 to Connecticut for related violations. Despite these settlements, both companies-maintained government contracts. Cordant holds a $31.7 million Indiana Department of Child Services contract awarded in 2021.

Defendants pay $10-30 per rapid test and $50-110 for lab confirmation. Yet an Indiana study found drug testing actually increased odds of pretrial failure (odds ratio = 1.78).

 Stay tuned for the next article in the Business of Bail Reform Series, Part 7: The Foundation Funding Network for Bail Reform has Invested Over $700 Million

Part 1: Introduction

Part 2: When Private Prison Companies Promote Bail Reform, Follow the Money

Part 3: The Electronic Monitoring Industry Found its Growth Engine

Part 4: Risk assessment tools cost nothing upfront but extracted a different price

Part 5: Charitable Bail Funds Collected $90 Million in 2020 While Clients Committed Murder

Published by:

Eric Granof

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