Hospice fraud in California has been remarkably brazen. Medicare recipients have been signed up for care without their knowledge by thieves who stole their identities. Providers have paid kickbacks to people to enroll even though they aren’t terminally ill and don’t qualify. Sham companies have fabricated lists of employees.
The schemes have been an irresistible political target for President Trump, who mentioned California as a top offender when he created a task force last month to root out corruption in federally funded programs. He said that he believed that fraud in the nation’s most populous state was “10 times worse” than anywhere else.
But long before Mr. Trump weighed in, state investigators had uncovered rampant fraud in California’s hospice system on their own. For years, state and federal officials had been taking steps to combat abuses, and the state has stopped issuing new hospice licenses.
Despite the actions underway, Mr. Trump has made hospice fraud in California a new political flashpoint.
In recent weeks, nearly every day has brought dueling announcements from Democrats and Republicans about busted Medicare abuse schemes or calls for legislative sessions to examine fraud in the state. Dr. Mehmet Oz, the former talk show host who now runs the Centers for Medicare and Medicaid Services, has been an emissary of the Trump administration’s campaign against California, visiting the state and posting videos decrying health care fraud there. On Tuesday, a House committee held a special hearing on Medicare fraud with a focus on hospice abuse in California.
“Open-border states led by Democrats like Minnesota, New York and California are the epicenters of fraud in this country,” Representative Jason Smith, a Missouri Republican who chairs the Ways and Means Committee, said at the hearing. California in particular, he said, had “opened the door for millions to be stolen.”
The feud comes months after Mr. Trump seized on conservative furor over welfare fraud in Minnesota, another Democrat-led state, and blamed Gov. Tim Walz for the problem. Though Mr. Walz insisted that he was cracking down, the political fallout was severe enough that he decided not to run for re-election.
In California, Republicans have tried to pin the hospice problem on another prominent Democrat, Gov. Gavin Newsom, who is widely considered to be a 2028 presidential contender. The simmering outrage against both states has been stoked by Nick Shirley, a conservative content creator. Mr. Shirley posted a video in March in which he visited registered hospices in California that didn’t seem to exist.
No one disputes that hospice fraud in California is a problem, but federal and state leaders blame each other for the scale of it. The federal government administers Medicare, which certifies hospice facilities and funds most hospice care, while the state issues the initial licenses for hospices to operate.
Even as hospice fraud becomes increasingly politicized, advocates and lawmakers in California who have long pushed for a crackdown on abuses say they welcome the new focus. A 2022 state audit found that a lack of oversight had allowed hospices to be licensed with almost no vetting, to overbill Medicare by millions each year and to put patients at risk of receiving dangerously substandard care.
“Hopefully, now there’s a new urgency around this, because these are extremely vulnerable patients, they’re vulnerable families,” said Jacqui Irwin, a Democrat in the State Assembly who has sponsored multiple bills to clamp down on hospice fraud. “For a lot of hospices, their main goal is just to defraud Medicare.”
Hospice provides palliative care and other medical services for people who have six months or less to live. But there have been numerous reports of Californians being enrolled in hospice without their knowledge and providers billing millions in fraudulent claims.
In one scheme, a couple said they were promised $300 per month to sign up for hospice care they didn’t need.
In another recent case investigated by the state, fraudsters in Southern California purchased personal information off the dark web and began billing for purported services to people whose identities had been stolen. No hospice services were ever rendered, and there were no actual hospice centers or any paperwork, but the state was defrauded of $267 million.
Lynn Ianni, 69, found out she had been enrolled in hospice when she was seeking physical therapy for a shoulder injury from playing pickleball. Ms. Ianni, a clinical psychotherapist, was not dying, but was told she couldn’t gain access to her normal Medicare benefits because she was in hospice.
It took months for her to correct the problem and regain access to her Medicare benefits, Ms. Ianni testified to the House committee on Tuesday. She said she discovered that the sham hospice company had stolen the name of a surgeon for billing purposes.
“Imagine being told in effect that you’re at the end of your life when you’re not, and then being denied access to care because of that error,” she said. “It was not just frustrating. It was terrifying.”
The state audit, spurred largely by a Los Angeles Times investigation, detailed signs of wide-scale fraud, including a rapid increase in the number of hospice agencies for no clear reason and many businesses clustered in one location.
The audit also found that California’s rate of hospices per capita was far higher than that of several other states, suggesting that some part of the problem was unique to the California. For example, in a one-mile radius in the Van Nuys neighborhood of Los Angeles, the audit found, there were 210 active hospice agencies, more than in Florida and New York combined.
“We’re ground zero, especially in L.A.,” said Sheila Clark, executive director of the California Hospice and Palliative Care Association.
The audit found that the state had a lax licensing process for new hospices. Florida and New York, for example, have laws that mandate new hospices prove a need for services in their region, something California does not require.
California’s public health department also does not adequately verify the medical licenses of those starting new hospices, require criminal background checks of employees or check if the same employees are listed as working at multiple hospices, the audit said.
Mr. Newsom in 2021 signed legislation imposing a moratorium on new hospice licenses — a ban that remains in place and that he regularly mentions on social media. His administration this month released a new website dedicated to detailing how the state goes after fraud. Since 2021, the state has filed 109 hospice-related criminal cases and revoked 280 hospice licenses. Another 300 hospice licenses are under review, according to the health department.
“Trump and his right-wing media machine are pushing a fraud narrative about blue states like California to distract from their policy failures — all while ignoring rampant fraud in red states. It’s a deliberate distraction,” Marissa Salvidar, a spokeswoman for Mr. Newsom, said in an email.
Medicare advocates in California say they have also been urging the Trump administration to ramp up its own enforcement. In recent weeks, the federal government has made it easier for people to rapidly disenroll from hospice if they were added without their knowledge, allowing them to have access to their Medicare benefits again. And it has begun sending letters to beneficiaries in some states notifying them that they have been enrolled in hospice, so they will know if they were wrongly added.
Catherina Isidro, executive director of California Health Advocates, a nonprofit, said she didn’t want to get in the middle of a political battle, but was grateful these issues were getting more traction. Her organization runs a federally funded hotline designated to prevent, detect and report Medicare malfeasance to Congress.
“We have to protect our beneficiaries. These are taxpayer dollars. They’re literally stealing from the government,” she said.
Major change was expected in California this year with the adoption of more rigorous regulations for licensing hospices. At the last minute, the state extendedthe deadline, delaying them until next year.
“This would’ve cured so many things,” Ms. Clark said. “It was very disheartening.”
The health department is revising the regulations, which will include stricter standards for who can own or run a hospice and set new staffing and screening requirements, said Mark Smith, a department spokesman. He said in an email that the department was working to finalize “draft regulations as quickly as possible.”
Ben Allen, a Democratic state senator who represents parts of Los Angeles County and has championed legislation to increase hospice oversight, said that the situation offered an opportunity for cooperation between the federal and state governments, given that both are being defrauded.
“Nobody wants to see money effectively stolen by unscrupulous criminals,” Mr. Allen said.
Soumya Karlamangla is a Times reporter who covers California. She is based in the Bay Area.
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