"The Numbers Are Shocking": California Faces Scrutiny Over Hospice Fraud
Authored by Tom Gantert via The Epoch Times,
Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, posted an Instagram video this week detailing ongoing fraud among hospice and health care facilities in Los Angeles County.
Investigations have focused on Los Angeles County, where officials said state regulators did little to stop fraud.
Investigators believe that the start of the hospice fraud can be traced as far back as 2010.
“The normalization of hospice fraud in California has to stop,” Oz said in his Instagram video while standing in front of one of the Los Angeles County homes that served as a hospice. “The numbers are shocking.”
Here’s what to know about the ongoing fraud scandal and how it is being addressed.
How Do Hospice Schemes Work?
Oz described in his video how the people running that particular hospice allegedly enrolled six individuals into their program.
The patients in the facility allegedly weren’t dying but were put on hospice so the owners of the business could charge Medicare for providing care. The owners also shared their patients’ information with other hospice centers that were in on the scam so they could get paid, Oz said.
Government investigations into Los Angeles County’s operations showed that some hospice agencies might be using stolen identities of medical personnel and that many of the so-called terminal patients were living well beyond expectations.
Investigators believe that the hospices are enrolling patients who are not suffering from terminal illnesses because the patients were found to have “unusually long” stays at the facilities, and high rates of patients were discharged alive.
The financial incentives for fraud are significant. A California state auditor report states that a hospice agency that bills for 20 patients at the going rate can make $122,000 per month.
In 2023, the Centers for Medicaid and Medicare Services estimated that improper payments in home health claims totaled $1.2 billion.
‘People Aren’t Paying Attention’
Investigators said the growth in Los Angeles County hospices began in 2010.
There were 109 hospice agencies in Los Angeles County serving 1 million elderly people in 2010. By 2021, there were 1,841 hospice agencies serving 1.4 million elderly people. From January 2019 to August 2021, the state received 2,600 applications for hospice agencies in Los Angeles County.
According to one government investigation, a single building with 22,500 square feet of space in the community of Van Nuys contained more than 150 licensed hospice and home health agencies—a number investigators believe exceeded the structure’s capacity. The building had no signage indicating that it was housing so many hospices.
Oz said Los Angeles County accounts for about one-third of all hospices in the United States. Of the 2,836 hospices in California, 1,841 were located in Los Angeles County, or nearly two out of every three hospices.
“That only happens because people aren’t paying attention,” Oz said in his Instagram video.
Lack of Oversight
In March 2022, the state auditor warned that the state’s “weak” oversight of the hospice and health care business has “created the opportunity for large-scale fraud and abuse.”
The Centers for Medicare and Medicaid Services directed the California Department of Public Health, the state agency responsible for licensing and oversight, to investigate the single Van Nuys building that was found to have 150 licensed hospice and home health agencies.
The Van Nuys hospice agency door was locked, and the office phone was not working when investigators showed up in January 2021, according to a state audit report. The California Department of Public Health had to contact the building’s landlord to get the owner’s contact information. The owner didn’t show up for scheduled meetings with Public Health for three days, and Public Health was unable to obtain any records. The owner was not able to answer questions regarding the agency, and when asked about her title, she told investigators, “We have not decided yet.”
The California Department of Public Health stated that it couldn’t substantiate any fraudulent activities and closed the investigation without taking any action.
The state auditor also discovered that Public Health became aware of possible fraud during the licensing process but still granted licenses to those hospice agencies. Public Health has not suspended a single hospice license since 2015 and revoked only one license, the auditor said.
Public Health was also taking five months to complete its investigations of patient abuse, which investigators considered “near the upper limit” of a hospice patient’s expected life span.
The auditor’s report states that Public Health agreed with most of the recommendations but stated that some might require legislation to be passed.
The California Department of Public Health didn’t respond to an email seeking comment from The Epoch Times.
Attempts at Reform
Politicians have attempted to address the fraud with legislation, litigation, and other actions.
California Gov. Gavin Newsom signed a law on Oct. 4, 2021, that stopped all new hospice licenses due to fraud concerns. The ban was extended through January 2027.
In November 2025, the Department of Justice reported that its fraud division had charged more than 5,800 defendants nationwide involved in health care fraud since 2007. Those 5,800 defendants billed federal health care programs and private insurers for more than $30 billion.
On Jan. 27, Newsom said the California Department of Public Health had revoked more than 280 hospice licenses in the past two years and had identified about 300 more hospices to be evaluated for potential revocation of their licenses.
Since 2021, the California Department of Justice has investigated 101 criminal enterprises and 284 criminal defendants and filed 24 civil cases. As of January, 109 individuals have been charged with hospice-related offenses.
At the federal level, Congress is looking into the issue. A March 17 hearing in the House addressed fraud in hospices across the country.
Rep. Linda Sanchez (D-Calif.) and Sen. Mark Warner (D-Va.) introduced a bill that aims to protect hospice patients and taxpayers from fraud.
At the state level, California Assemblywoman Alexandra Macedo, a Republican representing a rural San Joaquin Valley district, sent a letter on March 16 to the Subcommittee on Health criticizing the Newsom administration for not doing enough to stop the fraud.
Macedo said in the letter that she visited a dilapidated building in Van Nuys that had 197 hospice agencies registered to that address.
She said that Newsom’s administration has “failed to provide the aggressive oversight necessary to stop this hemorrhaging of public funds.”
“Despite a state audit and supposed moratorium on new licenses, these fraudulent hubs continue to operate in broad daylight,” Macedo said.
In January, Newsom said that the Trump administration has “dismantled the federal government’s ability to prevent and address fraud.”
“California didn’t wait—we’ve identified and cracked down on hospice fraud for years, taking real action to protect patients and taxpayers,” Newsom said in a statement.
The National Partnership for Healthcare and Hospice Innovation (NPHI) stated that it is involved with federal leaders to find solutions. The NPHI stated that the fraud issues are not “representative of the majority of hospice providers, who are focused every day on delivering high-quality, compassionate care to patients and families.”
“NPHI is actively working with the Administration and CMS to identify ways to target and root out bad actors,” said Tom Koutsoumpas, founder and CEO of NPHI. “We are encouraged to see decisive steps being taken to crack down on fraud and remove these bad actors from the hospice system, while safeguarding the integrity of hospice care for patients and families nationwide.”
