Trump administration recovers over $1.6 billion from dubious Medicare lab billing

Since President Donald Trump resumed the White House, the Centers for Medicare and Medicaid Services has stopped or taken back more than $1.6 billion in potentially improper Medicare laboratory payments, including $732 million linked to 157 providers removed for suspected fraud. CMS Administrator Dr. Mehmet Oz said the scheme drained the Medicare Trust Fund by billing for tests that were never done, unnecessary services, or inflated fees.

A consulting firm that enrolled 14 labs generated over $24 million in claims despite CMS finding none of the labs operational, prompting a $12 million hold and a $7 million recovery. The agency relies on artificial-intelligence tools to detect atypical billing patterns, leading to over $500 million halted through 185 payment suspensions after reviewing 600 labs. In Texas, two labs were caught early, resulting in denial of $1.2 million and $1.9 million respectively, with further payments blocked. Overall, CMS claims its fraud-prevention actions saved $42 billion in fiscal year 2025 and have frozen more than $371 million in 2026 across various services.