A sweeping investigation has reignited concerns over massive Medicare abuse, as federal and state officials warn that hospice fraud in Los Angeles has ballooned into what some describe as one of the most lucrative healthcare scams in the country. Auditors, prosecutors, and whistleblowers say the system has been exploited at every level—turning a program meant to care for the dying into a taxpayer-funded pipeline for organized fraud.
At the center of the controversy are allegations that hundreds of hospice providers across Los Angeles County are enrolling fake or medically ineligible patients, billing Medicare for unnecessary or nonexistent services, and siphoning billions of dollars through shell companies and offshore ownership structures. Investigators describe a landscape filled with “ghost patients,” sham businesses, corrupt medical certifications, and aggressive recruitment tactics that target vulnerable seniors.
“Hospice is crazy here,” said Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services (CMS), in a recent public statement. “You’ve got hospice that’s grown seven-fold in the last five years. They represent about three and a half billion dollars of fraud, we believe, just in LA County.”
Hospice care is intended for terminally ill patients with a life expectancy of six months or less. Under federal rules, providers receive a fixed daily rate—roughly $260 per patient per day—to cover all services. But investigators say that structure has been weaponized by bad actors who maximize enrollment while minimizing care.
California Attorney General Rob Bonta has previously described the situation as a crisis, warning that hospice fraud has reached epidemic levels in parts of the state, particularly in the greater Los Angeles area. According to state and federal officials, fraudulent providers routinely submit false claims, pay recruiters to sign up seniors regardless of medical condition, and enroll patients who are not terminally ill—or who do not even know they have been placed in hospice.
One Los Angeles hospice owner, speaking anonymously, summed it up bluntly: “As a hospice owner, I could sign up everybody in this room for hospice.”
Whistleblowers say the system is riddled with loopholes. There is no meaningful cap on the number of hospice licenses a single individual can control, and no residency requirement for applicants. In practice, this allows owners to register multiple entities, often using nominees or foreign addresses, while remaining largely invisible to regulators.
“It’s all just paperwork,” one whistleblower explained. “I could fill out an application in Kazakhstan if I wanted and get a hospice license.”
According to CMS officials, the fraud often begins with recruiters who target seniors in shopping centers, apartment complexes, and community gathering spaces. They offer inducements—walkers, nutritional supplements, grocery cards, even cash—in exchange for Medicare information. Those Medicare numbers are then sold to hospice operators for anywhere from $1,000 to $3,000 per patient, with recruiters receiving ongoing kickbacks as long as the individual remains enrolled.
Once enrolled, many patients receive little or no actual care. Some continue living independently for months or even years, while providers bill Medicare daily. Nationally, more than half of hospice patients die within 18 days of enrollment. In Los Angeles County, however, the average stay exceeds three months, and court records show some providers billing Medicare for patients who remained in hospice for 18 months or longer.
Additional profits are generated through “upcoding” and “unbundling,” billing practices that inflate claims by charging separately for services that are supposed to be included in the daily hospice rate.
“A Medicare MIB number is more lucrative than a credit card,” said Sheila Clark, president of the California Hospice and Palliative Care Association. “They’re trafficking beneficiaries in and out of hospices and home health. It’s human exploitation.”
The scale of hospice proliferation in Los Angeles has stunned regulators. The county is home to 1,923 licensed hospice providers—more than exist in 36 states combined. State auditors have documented extreme clustering, including one square-mile area in Van Nuys that housed 210 hospice agencies. In one building alone, investigators found 112 licensed hospices, despite no visible staff, patients, or operational infrastructure.
“These are not mom-and-pop operations,” Dr. Oz said. “These are sophisticated networks that understand the billing system better than the people who designed it.”
Oz and other federal officials have alleged that organized criminal groups are heavily involved, working with doctors willing to falsify medical certifications. According to CMS, these networks use layered ownership structures, nominee directors, and foreign financial channels to obscure control and move money offshore.
California has attempted to respond by imposing a moratorium on new hospice licenses, but critics argue the measure came too late. Hundreds of existing providers remain active, and enforcement actions move slowly through an already strained system.
Meanwhile, the fallout is being felt by legitimate patients and families. Clark warned that rampant fraud is distorting the entire hospice market, making it harder for ethical providers to operate and for patients who truly need end-of-life care to access services.
“They need the care but can’t get it,” she said. “And when seniors finally realize what’s happened, they tell us, ‘I’ve been scammed.’”
Federal authorities say investigations are ongoing, with multiple criminal cases already resulting in guilty pleas involving millions of dollars in false claims. CMS has pledged to tighten oversight, increase audits, and expand beneficiary education, while state officials continue to push for stronger licensing and enforcement mechanisms.
For now, the controversy underscores a broader vulnerability in the Medicare system—one where limited oversight, high reimbursement rates, and complex regulations create fertile ground for abuse. As investigators dig deeper, the full scope of the losses may take years to uncover, but officials on all sides agree on one point: the damage is already done, and seniors are paying the price.
Emily Johnson is a critically acclaimed essayist and novelist known for her thought-provoking works centered on feminism, women’s rights, and modern relationships. Born and raised in Portland, Oregon, Emily grew up with a deep love of books, often spending her afternoons at her local library. She went on to study literature and gender studies at UCLA, where she became deeply involved in activism and began publishing essays in campus journals. Her debut essay collection, Voices Unbound, struck a chord with readers nationwide for its fearless exploration of gender dynamics, identity, and the challenges faced by women in contemporary society. Emily later transitioned into fiction, writing novels that balance compelling storytelling with social commentary. Her protagonists are often strong, multidimensional women navigating love, ambition, and the struggles of everyday life, making her a favorite among readers who crave authentic, relatable narratives. Critics praise her ability to merge personal intimacy with universal themes. Off the page, Emily is an advocate for women in publishing, leading workshops that encourage young female writers to embrace their voices. She lives in Seattle with her partner and two rescue cats, where she continues to write, teach, and inspire a new generation of storytellers.
