Hospice Fraud in California: A Growing Concern

LOS ANGELES — At 71, Linda Henry thought she was enjoying her retirement in good health. She only saw her doctor occasionally for routine checkups. So, you can imagine her surprise when, in 2024, she learned that she had been enrolled in hospice care—a service typically reserved for those facing terminal illness. A Medicare representative informed her that the records indicated she had heart failure.

Henry’s experience highlights a troubling trend of fraud within the hospice industry, particularly in California. Here, scammers have exploited lax government oversight to create fake hospices, convincing individuals to enroll or even using stolen identities to bill Medicare for services not rendered.

California has been a central focus for the Trump administration’s crackdown on fraud in federally-supported health programs. Since early 2025, over 1,000 hospice providers have been removed from Medicare, with officials estimating that LA County alone has seen around $3.5 billion in fraudulent claims.

The state insists it is taking steps to combat the issue. Since implementing a moratorium on new hospice licenses in 2021, nearly 500 licenses have been revoked, and in June, California introduced emergency regulations to tighten approval processes for new licenses.

Hospice is designed as palliative care for terminally ill patients, meaning once someone is enrolled, Medicare won’t cover additional treatments outside of that care. This can leave vulnerable seniors missing out on essential medical appointments or, worse, not receiving the critical care they require. Meanwhile, substantial taxpayer funds are being misappropriated by fraudsters, putting genuine beneficiaries at risk.

Advocates for the elderly emphasize that it’s challenging to calculate how many individuals like Henry have unknowingly been caught in such scams, calling for greater cooperation at both state and federal levels.

The Scale of Hospice Fraud in California

As of 2026, California had around 2,100 hospice organizations, a decrease from 2,800 just four years earlier. In contrast, New York, which has stricter hospice registration requirements, had only 39 such organizations, according to state health data.

A 2022 audit revealed extensive fraud and abuse, especially in LA County, where hospices were often found clustered in single buildings. The rapid rise in the number of hospices was also notable, coupled with abnormally high rates of patient discharges. Since hospice care often occurs at patients’ homes, one registered hospice can serve multiple locations.

In April, federal prosecutors announced several arrests linked to hospice fraud in the LA area. Just a week later, California’s Attorney General Rob Bonta reported that 21 individuals were arrested in a multimillion-dollar scheme that involved using stolen identities for hospice billing. His office has been proactive, filing over 100 criminal cases related to hospice fraud and achieving more than 50 convictions since 2021.

“This is a California problem,” remarked First Assistant U.S. Attorney Bill Essayli during a press conference about the federal arrests in April. He labeled the state as “the kingdom of fraud” under the governance of Governor Gavin Newsom.

Some critics have suggested the Trump administration’s crackdown on fraud is politically motivated, alleging that tougher penalties have disproportionately affected states with Democratic leadership. The administration has made errors in its approach; in April, it conceded a significant miscalculation in its fraud probe figures related to New York.

Attorney General Bonta later emphasized, “This isn’t a political game for us. This is about protecting taxpayer dollars and safeguarding the programs that sick and vulnerable Californians rely on.”

A Personal Battle Against Fraud

For many, like Henry, fraud starts with a robocall or someone showing up at the door, asking them to sign forms that give away personal information, including Medicare numbers. Some even entice individuals with gift cards or weekly cash offers in exchange for enrolling in hospice.

Henry suspects her Medicare number was compromised after a cyberattack on a healthcare payment portal. She discovered her enrollment in hospice in September 2024 when her doctor’s attempt to bill Medicare for an allergy test was rejected, leading to a series of unpaid claims.

For the next several months, Henry made countless phone calls and sent numerous emails to Medicare. Her doctor provided documentation stating her good health, but she struggled to get a response. She found herself entangled with Fortuna Hospice Inc., which never answered her calls or returned her inquiries. When she visited the listed address, she only found an empty office space. Along the way, she reached out to FBI investigators, the state health agency, and advocacy groups for Medicare patients.

“I delayed physical appointments and my colonoscopy because I knew we were going to have to fight this, and I didn’t want to worry about payment issues,” she shared. After eight long months, Medicare finally acknowledged her case as fraud. It wasn’t until a year after her initial complaint that she could resume seeing her doctors.

Increased Federal Oversight

Some of the oversight enhancements began during the Biden administration, which implemented a period of increased scrutiny on newly enrolled hospices in California, Arizona, Nevada, and Texas. By December 2025, Georgia and Ohio were included as well, and in May it was announced that a nationwide moratorium would be placed on new enrollments for hospice and home care providers.

The Trump administration’s fraud initiatives have faced backlash for targeting providers who are immigrants. In January, Dr. Mehmet Oz from the Centers for Medicare and Medicaid Services highlighted pervasive fraud in LA County, attributing some schemes to the “Russian Armenian mafia,” a comment that led Governor Newsom to file a civil rights complaint. A separate investigation regarding daycare fraud in Minnesota also focused on facilities run by immigrants from Somalia.

Additionally, the Trump administration has withheld over $2 billion in Medicaid payments to California due to “suspected fraud and noncompliance,” though state officials report they haven’t received detailed explanations for these suspicions.

In June, the Justice Department made headlines by announcing criminal charges against those alleged to be involved in $6.5 billion worth of fraudulent claims submitted across various healthcare programs, including Medicare and Medicaid.

Sheila Clark, CEO of the California Hospice and Palliative Care Association, shared an alarming testimony at an April congressional hearing about a woman unable to get her cataract surgery approved by Medicare because she was fraudulently enrolled in hospice care. Tragically, the woman suffered a fall in the night trying to navigate her home without clear vision, resulting in a broken hip. She passed away two months later in a nursing facility. “That didn’t need to happen,” Clark lamented. “These scammers will go to any lengths to survive, and we all need to work collaboratively at both state and federal levels to clean up this mess.”