House Republicans Launch Probe Into California’s ‘Rampant’ Hospice Fraud

House Republicans have launched a formal investigation into rampant hospice fraud in California, focusing on Southern California and Los Angeles County. The probe, led by the House Committee on Oversight and Government Reform, comes after investigations by CBS News,  independent journalist Nick Shirley, and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz identified potentially billions in fraud earlier this month.

The CBS News analysis of Los Angeles County hospice records found that over 700 of nearly 1,800 hospices triggered multiple red flags for fraud as defined by a 2022 state audit. The red flags included excessive billing—$29,000 per patient on average in LA County, more than double the national average of $13,200—and suspicious patterns like multiple providers sharing the same address or staff.

Shirley described the hospice fraud in California as a “Billion dollar fraud crisis.”

“California may have the largest amount of fraud in the country. As California is the state with the highest taxes and collects more money than any other state in America, it is filled with fraud. California’s version of Medicaid, called Medi-Cal, has more than doubled since 2022 from $108 billion to a proposed $222 billion in 2026,” he said.

Meanwhile, CMS Administrator Dr.  Oz alleges that a $3.5 billion hospice fraud ring has been operating in Los Angeles, where 42 providers were registered within a single four-block radius.

“This administration under President Trump is not going to tolerate taxpayer dollars being stolen because people aren’t paying attention anymore. We’re focused on this,” Oz said.

He claimed the fraud was largely orchestrated by the “Russian, Armenian mafia” and said that most of the money spent on home and community-based services across California “might be fraudulent.”

“Despite clear red flags, it appears California leaders have enabled hospice providers to DEFRAUD hardworking American taxpayers,” Committee Chairman James Comer stated Monday.  “The House Oversight Committee is moving to protect taxpayer funds from waste, fraud, and abuse.”

The Republican-led committee sent a letter to Governor Gavin Newsom, demanding documents and communications from January 1, 2019, to the present, including those between his office and key state agencies like the Department of Health Care Services, Department of Public Health, and the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse.

“The Committee is concerned your administration does not have sufficient internal controls to prevent and detect fraud and is not conducting proper oversight of these hospice programs,” the letter said. “As a result, Americans across the country are paying for California’s rampant hospice fraud and vulnerable patients are being exploited. California has a well-documented history of fraud in its hospice programs.”

The Committee accused the Newsom administration of knowing about credible reports of hospice fraud for at least four years and failing to implement sufficient oversight.

“Reports show Gavin Newsom’s administration knew about it for YEARS while fraudsters billed taxpayers and exploited vulnerable patients,” the Committee posted on X. “Now we’re demanding answers.”

Newsom’s office responded by stating that California took decisive action in 2021 by placing a moratorium on new hospice licenses, which remains in effect. The state also claimed it has revoked over 280 hospice licenses in the past two years and has 300 providers under investigation.