WASHINGTON, D.C. — The Centers for Medicare & Medicaid Services said its laboratory-fraud enforcement efforts have prevented or recovered more than $1.6 billion in potentially improper Medicare payments, including $732 million tied to the removal of 157 laboratory providers from the program.
The total also includes more than $500 million in potentially fraudulent payments halted through 185 payment suspensions stemming from an investigation of 600 laboratories, according to CMS.
The agency reported recovering more than $276 million in previously paid laboratory overpayments and preventing another $127 million in potentially fraudulent payments following 85 law-enforcement referrals from a CMS contractor.
CMS said it is using artificial intelligence, machine-learning models and other analytics to identify unusual billing patterns in Medicare fee-for-service claims. Claims flagged as high risk can be subjected to additional review and, when warranted, held, rejected or denied before federal money is released.
The agency has focused on suspected schemes involving medically unnecessary testing, billing for services that were not performed and upcoding. The activity can involve genetic testing, complex drug testing and pathogen-detection services.
“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 Administrator Mehmet Oz said.
In one case cited by CMS, an individual operating a consulting company enrolled 14 laboratories in Medicare and billed more than $24 million even though investigators determined none of the laboratories was operational.
CMS said payment suspensions are holding $12 million associated with those laboratories and that the agency has recovered another $7 million. Eleven of the 14 laboratories have had their Medicare enrollments revoked, while investigations involving the remaining three continue.
The agency also described a Texas laboratory that began billing in February 2026 and was suspected of submitting claims for services not rendered. CMS said it denied $1.2 million in claims and later suspended more than $150,000 in additional payments before revoking the provider in April.
A second Texas laboratory came under scrutiny after increasing its billing in May. CMS said it denied $1.9 million in claims and captured another $1.7 million through a payment suspension; the provider remains under review for possible revocation.
The laboratory enforcement effort forms part of a broader Medicare program-integrity push. CMS said it has identified $1.8 billion in Medicare overpayments through medical review so far in 2026, collected $378 million through post-payment reviews and suspended more than $539 million in suspected fraudulent payments.
Since Jan. 1, the CMS Fraud Defense Operations Center has accounted for more than $371 million in suspended Medicare payments involving 267 providers and suppliers, including more than $226 million tied to durable medical equipment, more than $53 million involving skin substitutes and more than $23 million involving hospice providers.
CMS also reported $42 billion in Medicare fraud-prevention savings during fiscal 2025.
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