Los Angeles hospice fraud reaches billions as Medicare providers scam federal system with fake companies

Ghost patients, sham companies, offshore owners, corrupt doctors. Auditors and prosecutors accidental hospice fraud successful Los Angeles is disconnected the charts, with providers scamming billions from taxpayers for patients that don't exist, mediocre attraction and nary care.

"Hospice is brainsick here," says Dr. Mehmet Oz, caput of Centers for Medicare and Medicaid Services. "You've got hospice that's grown seven-fold successful the past 5 years. They correspond astir 3 and a fractional cardinal dollars of fraud, we believe, conscionable successful LA County."

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Backing him up, California Attorney General Rob Bonta, who said past year, "Hospice fraud has go an epidemic successful California, specifically successful the greater Los Angeles area."

Bonta says fraudulent providers taxable mendacious claims for unnecessary services and recruiters get kickbacks for signing up seniors, whether they're sick or not. Hospices besides enroll patients who don't adjacent cognize they've been scammed until they question retired aesculapian care.

"As a hospice owner, I could motion up everybody successful this country for hospice," an LA hospice proprietor told us. A whistleblower told america there's nary bounds connected the fig of hospices an idiosyncratic tin ain and applicants tin unrecorded abroad. "It's each conscionable paperwork. I could capable [an application] retired successful Kazakhstan if I want, and get a hospice license."

WASHINGTON, DC - MARCH 14: Dr. Mehmet Oz speaks during a confirmation proceeding with the Senate Finance Committee successful the Dirksen Senate Office Building connected March 14, 2025 successful Washington, DC. Oz is U.S. President Donald Trump’s nominee to beryllium head of the Centers for Medicare and Medicaid Services. (Photo by Anna Moneymaker/Getty Images) (Anna Moneymaker/Getty Images)

He explained however the scam works:

• Recruiters spell to buying centers and elder centers to motion up patients, promising them walkers, a month's proviso of nutritional drinks, currency and play visits successful speech for the Medicare number.
• Recruiters past merchantability that "benny" oregon beneficiary's Medicare fig to a supplier for a $1 1000 to $3 1000 and person a chopped for each period the elder stays connected their rolls.
• Hospice enrollees are expected to person a terminal unwellness oregon beingness expectancy of six months oregon less. But often hospice owners dainty patients similar trading cards, moving them from 1 supplier to different if they enactment excessively long, which raises a reddish emblem with auditors.
• In the US, much than 50% of hospice patients dice wrong 18 days or less. In LA, the mean magnitude of enactment is much than 3 months and successful galore hospices, patients ne'er die, with tribunal records showing hospices billing the national authorities for 18 months and more.
• In LA, a hospice is paid by the national authorities $260 a time for each time a elder is nether their care.
• Hospices tin fraudulently get much wealth by "upcoding" and "unbundling" procedures to inflate invoices.

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"A Medicare MIB fig is much lucrative than a recognition card," says Sheila Clark, president of the California Hospice and Palliative Care Association, referring to the 11 quality codification each Medicare recipient has that allows national reimbursement. "They're quality traffickers. They're trafficking beneficiaries successful and retired of hospices, location health."

LA County unsocial has 1,923 hospice providers. That's much than 36 states combined and 33 times much than either Florida's 58 facilities oregon New York's 40, adjacent though LA has hundreds of thousands of less seniors.

FILE PHOTO: California Attorney General Rob Bonta announces that the authorities is suing the White House to reconstruct SNAP backing earlier the cutoff during a quality league successful Sacramento, California, U.S., October 28, 2025.  REUTERS/Fred Greaves/File Photo (Reuters/Fred Greaves/File Photo)

"Eighteen percent of the full country's location wellness attraction billing is coming retired of Los Angeles County," says Oz. "How is that possible?"

The epicenter of LA's fraud happens successful the San Fernando Valley, specifically the Van Nuys vicinity wherever authorities auditors recovered 210 hospice agencies wrong a quadrate mile. One commercialized gathering — without immoderate signage indicating hospice services were located inside, received authorities licenses for 112 hospices. Fox News went to those addresses and did not spot a azygous person. 

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At different locations successful the Valley, hospices operated wrong portion malls alongside burrito stands, nail salons, creation studios, taxation preparers, adjacent an car parts store and wrecking yard.

"These are Russian, Armenian gangs, mafia that are starring a batch of these efforts, we believe, person been capable to corrupt, and enactment with doctors who are consenting to lie," says Oz.

A banal photograph of a Hospice Nurse visiting an Elderly antheral diligent who is receiving hospice/palliative care. (iStock)

Oz is referring to the dozens of defendants of Armenian-American descent prosecuted for Medicare fraud astatine some the national and authorities level.

Investigators archetypal uncovered the planetary organized transgression transportation astir 10 years agone erstwhile national prosecutors charged 73 members and associates passim the US and Armenia of stealing $100 cardinal from Medicare by utilizing a bid of phantom clinics to measure for thousands of unnecessary aesculapian treatments. 

Known arsenic the Mirzoyan-Terdjanian transgression ring, defendants received 1 to 3-year sentences for racketeering, wellness attraction fraud, and wealth laundering. Since then, galore different Armenian-American hospice owners person been prosecuted successful California.

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California imposed a moratorium connected caller hospice licenses until it tin cleanable up the industry. Problem is, hundreds of fraudulent providers stay successful business, says Clark, and erstwhile seniors really request attraction — they can't get it — due to the fact that the hospice 'owns' their Medicare number, prohibiting morganatic doctors and hospitals from providing care.

"They telephone the hospice, there's nary moving telephone number. There's cipher there. I've had Benny's  bang connected the door. There is cipher there. What bash they do? They say, I didn't enroll successful this hospice. They request the care. But can't get it," says Clark. "We request to perceive to these radical erstwhile they say, I've been scammed."