The Trump administration has blocked or clawed back more than $1.6 billion in potentially improper Medicare laboratory payments since January, including $732 million tied to 157 lab providers kicked out of the program for alleged fraud.
The Centers for Medicare and Medicaid Services said the labs were suspected of billing Medicare for tests that were never performed, tests patients didn’t need, and services billed at inflated rates.
“When laboratories bill Medicare for tests they never performed, it drains the Medicare Trust Fund and diverts resources away from beneficiaries who need them,” CMS Administrator Dr. Mehmet Oz said.
“The previous administration treated our taxpayer-funded programs as piggy banks for fraudsters. That is no longer the case, thanks to President Donald Trump, Vice President JD Vance, and Dr. Oz, who is an anti-fraud superstar.”
In one case, the owner of a consulting company enrolled 14 labs in Medicare and billed the program more than $24 million — even though none of the labs appeared to be operating.
CMS has since held back $12 million in payments to the labs and recovered another $7 million. Eleven of the 14 labs have been removed from Medicare, while the remaining three are still under investigation.
CMS is using artificial intelligence and other technology to sift through Medicare claims and spot unusual billing that could signal fraud. The technology looks for billing that falls outside normal patterns and can flag suspicious claims for closer scrutiny. CMS can then hold, reject, or deny a claim before Medicare pays it.
Of the $1.6 billion cited by the agency, more than $500 million in suspected fraudulent payments were stopped through 185 payment suspensions after CMS investigated 600 labs.
The agency also recovered more than $276 million in overpayments made to 442 suspect labs and said another $127 million in potentially fraudulent payments was prevented after 85 cases were referred to law enforcement.
CMS pointed to two recent cases in Texas as examples of labs suspected of billing Medicare for services they did not provide.
One lab began billing Medicare in late February. CMS said it caught the suspicious activity early and denied $1.2 million in claims.
The lab then changed the way it billed Medicare in early April in an apparent attempt to get around the agency’s safeguards, according to CMS. Officials continued watching its claims and stopped more than $150,000 in additional payments before removing the provider from Medicare later that month.
Another Texas lab began billing heavily in May after submitting test claims two days earlier in the year. CMS denied $1.9 million in claims and captured another $1.7 million in payments. The lab remains under review and could be removed from Medicare.
The lab cases are part of a wider Trump administration push to combat improper Medicare billing involving medical equipment, hospice care, skin treatments, and other services.
CMS said its Medicare fraud prevention efforts saved $42 billion in fiscal year 2025. So far in 2026, the agency says it has identified $1.8 billion in Medicare overpayments and recovered $378 million in overpayments from post-payment reviews.
Since Jan. 1, CMS has also frozen more than $371 million in Medicare payments involving 267 providers and suppliers. That includes more than $226 million in suspected improper billing for medical equipment, more than $53 million involving skin treatments, and more than $23 million involving hospice providers.
“We won’t stop until we’ve restored program integrity and ensured that fraudsters have nowhere left to hide,” Oz said.
