The Trump administration says it has blocked or recovered more than $1.6 billion in potentially improper Medicare laboratory payments as federal officials ramp up efforts to combat fraud, waste and abuse within the massive government healthcare program.
The Centers for Medicare and Medicaid Services said 157 laboratory providers have already been removed from Medicare over suspected fraudulent activity. Those providers were connected to approximately $732 million in savings, according to the agency.
Investigators identified laboratories suspected of billing taxpayers for tests that were never performed, procedures patients did not medically need and services billed at rates higher than permitted. CMS Administrator Dr. Mehmet Oz said fraudulent laboratory claims drain resources from the Medicare Trust Fund that should instead be available for legitimate beneficiaries.
One investigation involved a consulting company owner who enrolled 14 laboratories in Medicare and subsequently billed the program more than $24 million. CMS investigators said none of those laboratories appeared to actually be operating.
Federal officials stopped approximately $12 million in payments connected to the laboratories and recovered another $7 million that had already been paid. Eleven of the 14 labs have since been kicked out of Medicare, while the remaining three continue to face investigation.
CMS is increasingly using artificial intelligence and other advanced technology to analyze enormous numbers of Medicare claims and identify unusual billing behavior. Suspicious patterns can then be flagged for investigators before taxpayer money is distributed.
That strategy represents an important shift in the government’s approach to healthcare fraud. Rather than attempting to recover money after potentially fraudulent payments have already been made, CMS can suspend, reject or deny suspicious claims before the funds leave the government.
More than $500 million in suspected fraudulent payments were stopped through 185 payment suspensions after CMS investigated roughly 600 laboratories. The agency also recovered more than $276 million in overpayments involving 442 suspect labs.
Another $127 million in potentially fraudulent payments was prevented after 85 cases were referred to law enforcement for further investigation.
The White House credited President Donald Trump, Vice President JD Vance and Oz with making fraud prevention a major priority. Administration officials accused the previous administration of failing to adequately protect taxpayer-funded programs from individuals attempting to exploit them.
CMS also highlighted two recent cases in Texas demonstrating how the new safeguards are being used. One laboratory began billing Medicare in late February, but officials quickly detected suspicious activity and denied approximately $1.2 million in claims.
The laboratory later changed its billing practices in what CMS described as an apparent attempt to circumvent federal safeguards. Investigators continued tracking its claims, blocked another $150,000 in payments and ultimately removed the provider from Medicare.
Another Texas laboratory began submitting a large volume of claims in May after previously submitting test claims. CMS denied approximately $1.9 million and captured another $1.7 million in payments. That laboratory remains under investigation and could also be removed from Medicare.
The laboratory crackdown is part of a much larger Trump administration campaign targeting potentially improper Medicare billing involving medical equipment, hospice services, skin treatments and other areas considered vulnerable to fraud.
CMS says its Medicare fraud-prevention efforts generated approximately $42 billion in savings during fiscal year 2025. So far in 2026, the agency says it has identified $1.8 billion in Medicare overpayments and recovered $378 million through post-payment reviews.
Since the beginning of the year, CMS has also frozen more than $371 million in Medicare payments involving 267 providers and suppliers. That includes more than $226 million connected to suspected improper medical-equipment billing, over $53 million involving skin treatments and more than $23 million involving hospice providers.
Oz says the administration intends to continue aggressively pursuing suspicious providers while expanding the technology used to detect questionable claims. The goal, officials say, is straightforward: protect Medicare beneficiaries while making it increasingly difficult for fraudsters to walk away with taxpayer money.
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