Medicare payments for tissue and organ transplants jumped 7,100 percent in six years, and the Trump administration says its fraud task force just started clawing that money back.
Medicare claims for so-called allografts, transplants of donated tissue or organs, rocketed from $200 million in 2019 to $14.4 billion in 2025, according to figures released by the Centers for Medicare and Medicaid Services. That is not a typo. A 7,100 percent increase in six years, in a government health program, is the kind of number that should have set off alarms years ago. It did not, at least not under the previous administration. It has now.
CMS Administrator Dr. Mehmet Oz, working alongside an anti-fraud task force led by Vice President JD Vance, announced that the agency has flagged 4,200 suspicious allograft claims worth $224 million in improper charges through May of this year. Since March, CMS has denied 96 percent of new allograft claims submitted for payment. The effect has been immediate: spending that hit $14.4 billion last year has collapsed back down to roughly $100 million so far this year.
That is not a rounding error. That is a program that was bleeding taxpayer money at a rate nobody in Washington bothered to explain, until this administration went looking. CMS separately moved to cut what it pays for the underlying product, setting a new rate of $127 per square centimeter for amniotic wound allografts starting January 1, 2026. Officials say that without that correction, the runaway allograft spending alone would have added roughly $11 a month to every Medicare beneficiary's Part B premium. Seniors on fixed incomes were about to pay for this scheme through their own premiums, whether they ever received a transplant or not.
The fraud did not stop at billing codes. The Justice Department has charged 11 defendants, including a company executive and eight medical professionals, across six federal districts in connection with fraudulent amniotic wound allograft claims. That case sits inside a much larger federal health care fraud sweep this year that has produced 455 defendants charged in connection with more than $6.5 billion in alleged fraud nationwide, according to the Justice Department, with a separate takedown earlier tied to $14.6 billion in alleged fraud across 324 defendants.
Part of a wider pattern the task force is chasing
The allograft scheme is not an isolated find. The same anti-fraud push has also uncovered a $906 million Medicare fraud case tied to a Texas nurse practitioner and led to the seizure of roughly $27 million in assets connected to Florida clinics under scrutiny for fraudulent billing. Vance's task force has additionally withheld $1.4 billion in payments from home health and hospice providers suspected of bilking the program, according to reporting on the task force's work. Taken together, the pattern is consistent: a federal billing system with too little scrutiny, exploited at scale, for years, before anyone in charge did the math.
None of this fraud invented itself. Someone built billing operations designed to exploit a program that pays out on claims first and asks questions later, if at all. CMS has not yet named every entity responsible for the allograft surge specifically, though the New York and Minnesota Medicaid investigations Oz has separately opened suggest the agency is widening its lens beyond a single state or scheme. The task force's public position is blunt: the money was going out the door faster than anyone could track it, and it took a change in leadership at CMS to even ask why.
What comes next matters more than the announcement itself. CMS has the new payment rate in place and the denial rate is already reshaping the numbers, but Congress has not yet moved legislation to permanently close the allograft billing loophole that let claims balloon unchecked for six years. Oz's team says more claims are still under review, and further clawbacks and criminal referrals are expected as the task force works through the backlog. Whether lawmakers follow with a legislative fix, or leave the door open for the next version of this scheme, is the question worth watching.
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