Trump Admin Cracks Down on Medicare Skin Substitute Fraud Amid 7,100% Claims Surge

The Trump administration has intensified efforts to combat suspected fraud in Medicare claims for skin substitutes, also known as allografts, following a reported dramatic increase in billing. According to administration officials and reports, claims rose from approximately $200 million in 2019 to $14.4 billion in 2025, representing a 7,100% surge. This has prompted the White House Anti-Fraud Task Force, led by Vice President JD Vance, and the Centers for Medicare & Medicaid Services (CMS), under Administrator Mehmet Oz, to review and deny a high percentage of claims.

CMS identified 4,200 potentially fraudulent allograft claims totaling $224 million through May, denying 96% of reviewed claims since March. The agency has also taken enforcement actions against durable medical equipment (DME) suppliers, suspending payments to 102 and revoking privileges for 725 others, accounting for 8.6% of Medicare-funded DME in 2025. These actions reportedly prevented nearly $220 million in fraudulent skin substitute claims.

The surge aligns with broader concerns documented by the HHS Office of Inspector General (OIG), which highlighted skyrocketing Medicare Part B expenditures on skin substitutes exceeding $10 billion annually by late 2024, with vulnerabilities to questionable billing and fraud schemes such as oversized grafts. Earlier audits and investigations, including a 2025 DOJ takedown involving $1.1 billion in fraudulent claims, underscore ongoing issues in this area. CMS has implemented payment reforms and moratoria on new DME enrollments to address waste and abuse.

Officials emphasize protecting taxpayer funds and legitimate patient care, warning fraudsters of continued enforcement. The task force's efforts extend to other entitlement programs, reflecting systemic vulnerabilities in government healthcare spending.