Federal officials estimate that Los Angeles County accounts for $3.5 billion in fraudulent hospice claims, with more victims reporting experiences of abuse. Allegations include the creation of fake hospices, identity theft, and the enrollment of individuals in hospice care without their consent to bill Medicare. This scheme can have serious implications for victims, as Medicare typically does not cover medical treatments outside of hospice care once a patient is enrolled.
Linda Henry, a 71-year-old retiree, discovered in 2024 that Medicare records indicated she had heart failure and was enrolled in hospice care, despite never signing up. This situation jeopardized her access to regular medical care. Henry found out about the issue when her doctor attempted to bill Medicare for an allergy test in September 2024, which was denied. Following this, other medical claims were also rejected.
Henry spent several months contacting Medicare and emailing officials while her doctor provided documentation confirming her good health. She was allegedly enrolled with Fortuna Hospice Inc., which did not respond to her inquiries. When she visited the company's listed address, she found it to be an empty office. Henry stated, "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."
After eight months, Medicare recognized Henry as a fraud victim, but it took an additional four months before she could resume seeing doctors. California has been a focal point of federal investigations into this issue, with the state experiencing a reduction in hospice organizations from approximately 2,800 in 2022 to about 2,100 in 2026. A 2022 state audit identified numerous hospice agencies located in the same buildings, raising red flags.
First Assistant US Attorney Bill Essayli described California as a significant problem area during an April press conference, stating, "I call California the kingdom of fraud, and Gavin Newsom reigns over this kingdom here." Since imposing a moratorium on new hospices in 2021, California has revoked nearly 500 hospice licenses, and new emergency regulations adopted in June have tightened licensing requirements. More than 1,000 California hospices have been removed from Medicare since early 2025.
Advocates caution that this fraud not only wastes taxpayer money but also hinders vulnerable seniors from receiving necessary care. Sheila Clark, CEO of the California Hospice and Palliative Care Association, testified about a woman who was falsely enrolled in hospice and was unable to obtain approval for cataract surgery, stating, "She died two months later in a skilled nursing facility. That did not need to happen." Clark emphasized the need for state and federal collaboration to address this issue.