$3.5B Medicare Hospice Fraud Scheme Ensnares Healthy Seniors in LA County
Federal officials estimate Los Angeles County alone accounts for $3.5 billion in fraudulent hospice claims, with healthy seniors enrolled without consent.
Fake Hospices in California Trap Healthy Seniors in $3.5B Medicare Scam
Federal officials estimate that Los Angeles County alone accounts for $3.5 billion in fraudulent hospice billing, as victims continue to come forward with accounts of identity theft and unauthorized Medicare enrollment, NY Post Metro reports.
Fraudsters allegedly created fictitious hospice agencies, stole personal identities, and enrolled living, healthy people in end-of-life care programs — then billed Medicare for the services. Because hospice is designated for terminally ill patients, Medicare generally stops covering standard medical treatment once a person is enrolled, leaving victims without access to routine care.
Linda Henry's case
At 71 and recently retired, Linda Henry believed she was in good health. In September 2024, her doctor attempted to bill Medicare for an allergy test — and the claim was denied. Further rejected claims followed, prompting Henry to investigate.
She discovered Medicare records listed her as having heart failure and showed she had been enrolled in hospice, despite never consenting to it. The company listed on her records, Fortuna Hospice Inc., did not respond to her calls. When she drove to the address on file, she found what appeared to be an empty office.
"I delayed physical appointments and my colonoscopy and all this stuff because I knew that we were going to fight about this and it wasn't going to get paid," Henry told the AP.
It took eight months for Medicare to formally recognize Henry as a fraud victim. Another four months passed before she was able to see doctors again.
California at the center of the crackdown
California has emerged as the primary focus of federal enforcement efforts. The state had approximately 2,100 hospice organizations in 2026, down from around 2,800 four years earlier, according to the AP. A 2022 state audit identified dozens of hospice agencies clustered inside the same buildings, alongside other warning signs.
"This is a California problem," First Assistant US Attorney Bill Essayli said at an April press conference. "I call California the kingdom of fraud, and Gavin Newsom reigns over this kingdom here."
California has revoked nearly 500 hospice licenses since imposing a moratorium on new hospices in 2021. New emergency regulations adopted in June tightened licensing requirements. More than 1,000 California hospices have been removed from Medicare since early 2025.
Consequences beyond financial loss
Advocates warn the scheme carries consequences beyond draining public funds. Sheila Clark, CEO of the California Hospice and Palliative Care Association, testified about one woman who was falsely enrolled in hospice and could not get cataract surgery approved through Medicare.
"She died two months later in a skilled nursing facility. That did not need to happen," Clark said.
Clark added that sustained action at both the state and federal level is required. "These scammers here are going to do whatever they have to do to try and survive, and we need to work at the state level and the federal level to make sure that we are going to clean house."
Source: NY Post Metro