Hospice Fraud Widespread in Los Angeles County

An analysis reveals that over 700 of the approximately 1,800 hospice agencies in Los Angeles County exhibit multiple signs of potential fraud. This finding was reported by CBS News.

A California state audit from 2022 pointed out an alarming increase—1,500%—in the number of hospice agencies since 2010. By 2019, Los Angeles County had a concentration of these centers that was six and a half times higher than the national average based on its elderly population. This saturation seems to correlate with an estimated $105 million in Medicare overbilling, as noted by CBS News.

While Medicare is funded by the federal government, state authorities manage hospice licenses. This disconnect in regulation has contributed to a broader national issue. A 2023 report from the U.S. Department of Health and Human Services (OIG) indicated that suspected hospice fraud has reached around $198.1 million.

In response to the audit findings, California revoked 280 hospice licenses. However, despite these measures, signs of fraudulent practices continue to escalate, indicating a deeper, ongoing issue.

CBS analyzed records from all active hospice agencies in L.A. County, checking them against state-defined “fraud indicators.” These red flags include unexplained clustering of agencies, unexpectedly low patient numbers, and unusual rates of terminal patients being discharged alive.

Investigators also noted shared staff among various companies and patterns of excessive billing. Surprisingly, the typical hospice center in the county billed Medicare significantly more—over twice the national average.

The investigation revealed that 742 agencies, about 42%, showed multiple fraud indicators. Additionally, another 548 agencies had at least two suspicious signs. The geographic concentration was startling; nearly 500 hospices operated within just a three-mile radius. The most concentrated area was on Van Nuys Boulevard, where 137 agencies were found—89 registered to a single building.

Out of those 89, CBS discovered that 72 showed multiple signs of fraudulent activity.

When CBS attempted to reach out to 56 of these flagged agencies, the response was largely silence. Many phone lines were either disconnected or went straight to full voicemail. A few who did answer denied any misconduct outright.

Interestingly, none of the flagged hospice agencies appeared in California’s enforcement database. Since 2022, the California Department of Public Health has taken enforcement actions against only seven hospice facilities statewide.

According to a statement from Governor Gavin Newsom’s office, California has been active in addressing hospice fraud, forming partnerships across state agencies and making arrests to hold those responsible accountable.

California Attorney General Rob Bonta pointed out that his office has initiated criminal fraud cases against over 100 defendants and filed more than 20 civil actions related to the hospice sector, but he recognized that much more needs to be done to dismantle these fraudulent operations.

He emphasized the importance of responding to the warning signs rather than merely tallying them up.

The state has extended its moratorium on new hospice licenses until January 2027, a measure driven by the need to implement new emergency oversight regulations. Izzy Gardon, a spokesperson for Governor Newsom, mentioned to Fox News that the administration has been intensively addressing hospice fraud for years.

He highlighted that in 2021, Governor Newsom signed a law banning all new hospice licenses, a moratorium that is currently preventing new problematic agencies from entering the system while existing providers face tighter oversight.

Furthermore, Gardon noted that a multi-agency task force is actively looking into the situation, with around 300 additional providers under investigation for potential license revocation.

This report emerges amidst several high-profile national scandals that have sparked renewed discussions on government oversight, including allegations of fraud in COVID relief programs and statewide childcare sectors in Minnesota.