The Trump administration and the White House Task Force to Eliminate Fraud have blocked or recovered more than $1.6 billion in potentially improper Medicare laboratory payments since President Donald Trump returned to office, according to an announcement from the Centers for Medicare and Medicaid Services (CMS). These actions include $732 million tied to 157 laboratory providers that were removed from the Medicare program for alleged fraudulent billing practices.

CMS officials said laboratories were suspected of billing Medicare for tests that were never performed, services patients did not need, and procedures billed at higher rates than appropriate. As noted by Dr. Mehmet Oz, Administrator for CMS, "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 explained that advanced analytics and artificial intelligence are being used to detect and prevent fraudulent billing. The technology scans Medicare claims for unusual billing patterns, flagging suspicious activity for further review. CMS can deny, hold, or reject claims before payments are made. According to a CMS news release, these tools helped identify high-risk billing, such as up-coded services and claims for unnecessary or never-performed tests.

Between January and August of 2026, the CMS Fraud Defense Operations Center suspended more than $371 million in Medicare payments involving 267 providers and suppliers. Enforcement actions also included the recoupment of $276 million from 442 suspect labs and the prevention of $127 million in possible fraudulent payments after 85 cases were referred to law enforcement. In one example, the owner of a consulting company enrolled 14 labs in Medicare and billed over $24 million despite the labs not appearing to operate. CMS held back $12 million, recovered $7 million, and removed 11 of the labs from Medicare. The remaining three are still under investigation.

The agency highlighted recent cases in Texas, where labs were identified and removed from the program after billing large sums for unprovided services. In one case, $1.2 million in claims were denied, with an additional $150,000 in payments stopped before the lab was removed. Another lab saw $1.9 million in claims denied and $1.7 million in payments captured, while remaining under review.

The crackdown is part of a wider anti-fraud push across Medicare, including medical equipment, hospice care, and other services. CMS reported that its Medicare fraud prevention efforts saved $42 billion in fiscal year 2025, and so far in 2026, $1.8 billion in Medicare overpayments have been identified, with $378 million recovered.

Vice President JD Vance and Dr. Oz have both stated that efforts to restore integrity to Medicare will continue. "We won't stop until we've restored program integrity and ensured that fraudsters have nowhere left to hide," Dr. Oz said.

CMS says its anti-fraud operations will continue, with further investigations and technology upgrades planned to better safeguard taxpayer funds and patient care.

590 KCSJ

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