Los Angeles County milked Medicare for $3.5B in bogus hospice claims — DOJ and CMS crackdown imminent

Feds target billions in fake billing

Federal officials say Los Angeles County sits at the center of a massive hospice fraud problem.

CMS Administrator Dr. Mehmet Oz estimated roughly $3.5 billion in fraudulent hospice and home health billing is coming out of the county alone.

That’s staggering when you consider LA County holds only about 2.5% of the U.S. population but accounts for about 18% of all home health and hospice Medicare billing nationwide.

In January 2026, CMS and the Department of Justice announced a joint crackdown.

One county has more hospices than 36 states

LA County has about 1,923 hospice providers. To put that in perspective, that’s more than 36 states combined.

Florida has about 58. New York has about 40.

Both states have large senior populations, yet neither comes close.

The number of hospice agencies in LA County grew by about 1,600% since 2010, according to the California State Auditor, while the senior population grew only about 40%. For-profit companies drove the boom.

As of 2022, about 94% of California’s hospice agencies operated for profit, the highest rate in the country.

Oz found dozens of fake hospices with one address

State auditors found 112 licensed hospice agencies registered to a single building address in Van Nuys. In the same neighborhood, 210 active hospice agencies sat within one square mile of each other.

When Oz visited Van Nuys in January 2026, he reported finding 42 suspected fraudulent hospice sites within a four-block area. Many of those addresses showed no signs of real operations.

No signage. No working phone numbers.

No staff on site.

Recruiters trade gifts for Medicare numbers

The scam starts with a friendly face. Recruiters approach seniors at shopping centers, senior centers, and even their front doors.

They offer walkers, nutritional drinks, cash, and free home services. All they ask for in return is the person’s Medicare number.

Recruiters then sell that number to a fraudulent hospice provider for $1,000 to $3,000 and collect a monthly cut as long as the person stays enrolled.

The hospice bills Medicare for care that is either not needed, not provided, or both.

Victims lose access to real medical care

Once someone lands on hospice, their Medicare coverage switches from regular medical care to comfort care only.

That means Medicare will deny claims for prescriptions, surgeries, and doctor visits the person may actually need.

Some seniors don’t find out they’ve been enrolled until a pharmacy refuses to fill their medication or a hospital turns them away. Getting off hospice isn’t quick either.

It can take days or weeks of paperwork, and during that time, the person may go without needed treatment. In some cases, fraudulent enrollment contributed to a patient’s health declining or their death.

Patients get shuffled between fake providers

Hospice care is meant for people with a terminal illness and a life expectancy of six months or less. Nationally, more than half of hospice patients die within 18 days of enrollment.

But in Los Angeles, the average stay stretches past three months, and many patients never die while enrolled, according to court records.

Some hospices billed the federal government for 18 months or more for a single patient. Fraudulent operators move patients from one hospice to another to avoid raising red flags with auditors.

California revoked hundreds of licenses

Gov. Gavin Newsom signed a law in 2021 that placed a moratorium on new hospice licenses starting Jan. 1, 2022. That moratorium has been extended through Jan. 1, 2027.

Since it took effect, the state has revoked more than 280 hospice licenses and identified roughly 300 more under review for possible revocation.

California Attorney General Rob Bonta has called hospice fraud an epidemic in the greater Los Angeles area and has pursued criminal charges, civil cases, and prison sentences.

Feds expand oversight to six states

The crackdown isn’t just in California. CMS referred 343 cases to law enforcement in 2025 for suspected fraud, representing about $3.4 billion in fraudulent billing across the country.

The agency placed newly enrolling hospices in six states under enhanced oversight: Arizona, California, Nevada, Texas, Georgia, and Ohio.

About 668 hospices faced medical review under that program as of June 2025, and 122 had their billing privileges revoked.

CMS also launched unannounced visits to every Medicare-enrolled hospice nationwide, checking over 7,000 by mid-2025.

Fraud operators face years in prison

In November 2025, the DOJ announced prison sentences for four California residents involved in a $16 million hospice fraud and money laundering scheme.

One defendant received 12 years in prison and a restitution order of more than $17 million.

The group ran four sham hospices, billed Medicare for services that were medically unnecessary or never provided, and laundered the money through shell companies.

In a separate case, an Inland Empire couple received sentences for submitting false claims through four hospice companies they ran from 2013 to 2022.

Congress holds hearings on Medicare fraud

On Feb. 3, 2026, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing called “Common Schemes, Real Harm” to examine Medicare and Medicaid fraud.

Six Republican lawmakers from key committees had written to the HHS Inspector General pushing for stronger program integrity oversight.

Witnesses described how patients end up enrolled in hospice without their knowledge, which changes their care plan and can cut off treatments they need.

Legitimate hospice providers warned that the fraud hurts their ability to serve patients who genuinely need end-of-life care.

Honest providers feel the damage too

The National Alliance for Care at Home said oversight should target bad actors specifically rather than creating broad rules that affect legitimate providers.

The California Hospice and Palliative Care Association has pushed for stronger enforcement while warning that hundreds of fraudulent providers remain in business.

Legitimate providers say the fraud drives up costs, increases paperwork, and erodes public trust in hospice as a benefit.

Seniors and families who need real hospice care may hesitate to use it because of the fraud headlines.

How seniors can protect themselves

Never share your Medicare number with anyone offering gifts, free services, or cash in return. Be skeptical of unsolicited calls, knocks on your door, or offers of free housekeeping, cooking, or medical supplies.

Check your Medicare Summary Notice or Explanation of Benefits regularly for charges you don’t recognize. If you suspect fraud, call 1-800-MEDICARE or contact your local Senior Medicare Patrol program.

If a loved one is in a facility, make sure you know whether they’ve been enrolled in hospice and confirm it was a decision made with their doctor.

This article was created with AI assistance and human editing.

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