CMS has blocked or clawed back more than $1.6 billion in suspected Medicare lab fraud since President Trump took office, removing 157 providers from the program.
The Centers for Medicare and Medicaid Services has blocked or clawed back more than $1.6 billion in potentially improper laboratory payments since President Donald Trump returned to the White House, including $732 million tied to 157 lab providers kicked out of the program for suspected fraud. The agency says the labs were billing Medicare for tests never performed, tests patients did not need, and services billed at inflated rates. It is the latest win in a crackdown on waste and fraud that has become a centerpiece of the administration's agenda.
One case shows how brazen the schemes had become. The owner of a consulting company enrolled 14 labs in Medicare and billed the program more than $24 million, even though CMS said none of the labs appeared to be operating. The agency held back $12 million in payments and recovered another $7 million. Eleven of the 14 labs have been removed from Medicare, and the remaining three are still under investigation.
CMS Administrator Dr. Mehmet Oz did not mince words about the abuse. "When laboratories bill Medicare for tests they never performed, it drains the Medicare Trust Fund and diverts resources away from beneficiaries who need them," Oz said.
The agency is leaning on artificial intelligence and other technology to comb through claims and flag billing patterns that fall outside normal ranges. Suspicious claims can now be held, rejected, or denied before Medicare ever pays them. 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 Texas cases as examples of labs suspected of billing for services they never provided. One lab began billing Medicare in late February. The agency caught the suspicious activity early and denied $1.2 million in claims. When the lab changed its billing approach in April in an apparent attempt to dodge the safeguards, CMS kept watching and stopped more than $150,000 in additional payments before removing the provider from the program later that month.
Another Texas lab started billing heavily in May after submitting test claims earlier in the year. CMS denied $1.9 million in claims and captured another $1.7 million in payments. That lab remains under review and could be removed from Medicare.
The lab cases are part of a broader administration effort against improper Medicare billing involving medical equipment, hospice care, and skin treatments. Since January 1, CMS has frozen more than $371 million in Medicare payments involving 267 providers and suppliers, including more than $226 million tied to suspected improper billing for medical equipment, more than $53 million involving skin treatments, and more than $23 million involving hospice providers.
The results are stacking up. CMS says its Medicare fraud prevention efforts saved $42 billion in fiscal year 2025, and so far in 2026 the agency has identified $1.8 billion in overpayments and recovered $378 million through post-payment reviews.
The White House framed the crackdown as a clean break from the past. "The previous administration treated our taxpayer-funded programs as piggy banks for fraudsters," the White House said. "That is no longer the case, thanks to President Donald Trump, Vice President JD Vance, and Dr. Oz, who is an anti-fraud superstar."
Oz promised the pressure will not let up. "We won't stop until we've restored program integrity and ensured that fraudsters have nowhere left to hide," he said. With midterm elections approaching and voters focused on government waste, the administration is betting that real dollars saved from real fraud will resonate far beyond the Beltway.
CMS has blocked or clawed back more than $1.6 billion in suspected Medicare lab fraud since President Trump took office, removing 157 providers from the program.
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