WASHINGTON (VINnews) — The Trump administration has blocked or clawed back more than $1.6 billion in potentially improper Medicare laboratory payments since President Donald Trump took office and removed 157 laboratory providers from the program over alleged billing fraud, officials with the Centers for Medicare & Medicaid Services said Friday.
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CMS officials said the labs were suspected of billing Medicare for tests that were never performed, tests patients did not need and services billed at inflated rates.
In one case cited by the agency, a consulting company owner enrolled 14 laboratories in Medicare and billed the program more than $24 million even though none of the labs appeared to be operating.
The agency said it is using artificial intelligence to review claims and flag suspicious billing patterns before payments go out. So far in fiscal year 2026, CMS said it has identified $1.8 billion in Medicare overpayments and recovered $378 million through post-payment reviews.
CMS said more than $500 million in suspected fraudulent payments was stopped through 185 payment suspensions after investigators reviewed 600 labs. Another $276 million in overpayments was recovered from 442 suspect labs, and $127 million in potentially fraudulent payments was prevented after 85 cases were referred to law enforcement.
The agency pointed to two Texas laboratories as examples of how quickly the system can intercept suspect claims. One lab began billing Medicare in late February. CMS flagged it early and denied $1.2 million in claims. When the lab changed its billing method in April in an apparent effort to evade detection, officials said they caught that pattern as well, stopped another $150,000 in payments and removed the provider from the program.
The laboratory crackdown is part of a broader effort targeting improper Medicare billing for medical equipment, hospice care and skin treatments. Since Jan. 1, CMS said it has frozen more than $371 million in payments involving 267 providers, including $226 million in suspected improper billing for medical equipment.
“We won’t stop until we’ve restored program integrity and ensured that fraudsters have nowhere left to hide,” CMS Administrator Dr. Mehmet Oz said.
The figures released Friday describe administrative actions and suspected overpayments. They do not, by themselves, constitute criminal convictions.
As long as allegations have evidence to support them I applaud this savings. I suggest that Medicare now looks at physical therapy fraud in assisted living facilities. When a person first enters the facility their physical therapy people or physical therapy company associated with the assisted living facility will offer, we can evaluate your needs for free. My father was in one of these facilities. After a thousands of dollars of physical therapy his walking improved from three steps to six steps. This to me is absolute fraud and it happens all over the country.
the numbers are impressive, but where’s the context? potentially $1.6 billion out of how much in total? and flagged doesn’t necessarily mean fraudulent, because errors in paperwork can be corrected. this smells like propaganda.
The article highlights the importance of strong controls. When funds are involved, transparent processes and clear accountability are essential. This is true for government programs and for community funds. Donors want to know their contributions go to the intended cause. They want to trust the structure in place.