AUGUST 29, 2026
Trump Administration Says It Has Blocked $1.6 Billion in Potentially Improper Medicare Lab Payments
The Centers for Medicare and Medicaid Services (CMS) said it has blocked or clawed back more than $1.6 billion in potentially improper Medicare laboratory payments since President Trump took office in January 2025. The agency said 157 lab providers have been removed from the Medicare program for alleged fraud, accounting for $732 million of that total. CMS said the suspect labs were billed for tests never performed, medically unnecessary tests, and services billed at inflated rates.
The CMS announcement, characterized by the agency as a "first on Fox" exclusive, described a multi-pronged effort involving payment suspensions, overpayment recoveries, and law enforcement referrals. Of the $1.6 billion figure, more than $500 million in suspected fraudulent payments were stopped through 185 payment suspensions after the agency investigated approximately 600 labs. An additional $276 million was recovered in overpayments from 442 suspect labs, and $127 million in potentially fraudulent payments was prevented through 85 referrals to law enforcement.
CMS said it is using artificial intelligence and other technology to scan Medicare claims for unusual billing patterns. The system can flag suspicious claims for closer review and allow the agency to hold, reject, or deny a payment before it is made. CMS Administrator Dr. Mehmet Oz said in a statement: "When laboratories bill Medicare for tests they never performed, it drains the Medicare Trust Fund and diverts resources away from beneficiaries who need them."
The agency provided specific case examples to illustrate its methods. In one case, the owner of a consulting company enrolled 14 labs in Medicare and billed the program more than $24 million, despite CMS saying none of the labs appeared to be operational. CMS said it has since withheld $12 million in payments and recovered $7 million; 11 of the 14 labs have been removed from Medicare. Two Texas labs were also cited as examples where CMS denied or captured millions in claims after identifying rapid and unusual billing activity shortly after enrollment.