Congress Launches Investigation Into California Hospice Fraud, Citing Millions in Losses

A single building on Van Nuys Boulevard in Los Angeles holds 89 licensed hospice companies. When CBS News correspondent Adam Yamaguchi and his team visited the addresses of suspected fraudulent providers, they found empty offices and piles of uncollected mail. Two weeks later, that reporting landed on the desk of Congress.

House Republicans announced Monday that Congress will mount an investigation into "rampant hospice fraud," alleging that potentially tens of millions in taxpayer funds may have been lost in improper payments to Southern California companies. The Republican-led House Oversight Committee sent a letter to California Governor Gavin Newsom asking for documents related to the state's "oversight and internal controls to detect and prevent fraud for its federally funded hospice programs."

The letter was signed by Republicans including House Oversight Committee Chairman James Comer of Kentucky. It sets a deadline of April 6, 2026, for the requested materials, signaling that the investigation is moving quickly and could expand further depending on what investigators uncover.

The committee made clear it was acting directly in response to investigative journalism. "Recent reporting has revealed alarming evidence of fraudulent activity in California's hospice programs, including agencies overbilling Medicare and fraudulently enrolling beneficiaries without their knowledge," committee members wrote, citing the CBS News investigation.

In the letter to Newsom, the lawmakers emphasized that his administration has been aware of state audit reports of hospice fraud for at least four years but has failed to prevent or detect it. According to a March 2022 report from the California State Auditor, Los Angeles County has seen a 1,500 percent increase in hospice providers since 2010, with providers overbilling Medicare by at least $105 million in a single year.

The scale of the billing irregularities that CBS News uncovered is stark. The CBS News report examined business and financial records of every hospice currently operating in Los Angeles County, looking for the warning signs that the 2022 state audit identified as potential indicators of fraud, and found that over 700 of the roughly 1,800 hospices in LA County triggered multiple red flags as defined by the state.

Nationwide, the average amount a hospice bills Medicare per patient is $13,200. CBS News found the typical hospice in LA County billed Medicare roughly $29,000 per patient, more than double the national average. The highest rate billed by a single hospice in the county reached $74,000 per patient, nearly six times the national benchmark. Of LA County hospices with available Medicare data, nearly all submitted bills above that national average.

"Hospice fraud costs taxpayers hundreds of millions of dollars every year, and California is ground zero," Yamaguchi said. The U.S. Department of Health and Human Services' Office of the Inspector General reported in 2023 that suspected hospice fraud totaled an estimated $198.1 million nationwide.

The human cost extends beyond dollars. Hospice fraud often involves stolen Medicare numbers used to falsely enroll patients in hospice programs. In one case highlighted by CBS News, a 69-year-old woman was denied coverage for physical therapy because Medicare records showed she was dying in hospice.

Newsom's office pushed back, pointing to actions already taken. A spokesperson for Newsom wrote in a statement: "California took decisive action on hospice fraud years ago. In 2021, Governor Gavin Newsom signed legislation placing a moratorium on new hospice licenses, a policy that remains in effect today, preventing bad actors from entering the system while strengthening oversight of existing providers." A spokesperson also pointed out that the governor established a multi-agency hospice fraud task force, and that more than 280 hospice licenses have been revoked over the past two years, with an additional 300 providers under investigation, with the state continuing to take coordinated action to suspend Medi-Cal payments, revoke licenses, and pursue prosecutions.

Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, addressed whether the investigation was politically motivated. "Governor Newsom is not a target. Governor Newsom is the governor of the state of California, where there is an epidemic of fraud that should be addressed and that he has known about for several years," Oz responded.

A whistleblower reported that California has minimal safeguards to prevent fraudsters from obtaining hospice licenses, including allowing individuals living abroad to secure them, and described schemes in which fraudsters recruit seniors. With the committee's April 6 document deadline now set, whether Newsom's administration produces records that satisfy congressional scrutiny will determine how broadly and quickly this investigation expands.