Southern California Hospice Fraud: Eight Arrested in $50 Million Scheme

Federal authorities arrested eight individuals on Thursday in connection with health care fraud schemes totaling $50 million, primarily involving hospice centers in Southern California that allegedly billed Medicare for ineligible patients.

Fraud Schemes Involving Hospice Centers

• Five cases targeted hospice-care centers in Glendale, Artesia, Tarzana, and Simi Valley.
• These centers are accused of billing Medicare for patients who were not terminally ill and did not qualify for hospice services.
• The largest case involved an Artesia-based hospice owner who submitted over $9 million in fraudulent claims and received more than $8.5 million in payments.

Additional Arrests and Charges

• One person was arrested in Idaho for allegedly defrauding a West Coast labor union’s health care plans.
• Another arrest in Los Angeles was for forging immigration medical documents.
• A Los Angeles nurse used a Tarzana hospice to submit over $3.8 million in claims, with Medicare paying approximately $3.4 million; she has not yet been arrested.

Federal and State Government Responses

• The Trump administration has made California a focus of anti-fraud efforts, with First Assistant US Attorney Bill Essayli calling it the “kingdom of fraud.”
• Governor Gavin Newsom’s office stated that the state has revoked more than 280 hospice licenses since 2021 and is investigating 300 providers.
• Newsom welcomed federal involvement, saying on X: “Glad the federal government is finally stepping up to do their part.”

CMS Actions and Proposed Reforms

• CMS Administrator Mehmet Oz announced that federal officials “took out” 221 hospices in the last 10 weeks and pledged to review every hospice in California.
• Oz proposed a new publicly available hospice scoring system to identify illegitimate facilities.
• This follows previous allegations by Oz about widespread fraud, which led to a civil rights complaint from Newsom’s office.

Legal Status and Context

• One defendant charged in a new hospice fraud case is currently serving federal prison time in Seattle after a conviction in December 2024; her husband was arrested as a co-defendant.
• Court dates have not been set, and it is unclear if any of those arrested have legal representation.
• The fraud schemes are part of broader efforts to combat improper spending in federal benefits programs like Medicare and Medicaid.