Van Nuys Hospice Fraud: Auditors Say LA County Hospices Overbilled Medicare by $105 Million as CMS and DOJ Move to Cut Payments
Auditors say hundreds of hospices across Los Angeles County — concentrated along Van Nuys Boulevard — allegedly overbilled Medicare by about $105 million in one year, spurring intensified action from CMS, the DOJ and California authorities.
- Audited overbilling: Los Angeles County hospices were estimated to have overbilled Medicare by about $105 million in a single year — per auditors and congressional inquiry (House Energy & Commerce letter to HHS‑OIG).
- High density of flagged providers: More than 700 of roughly 1,800 hospices in L.A. County trigger multiple state-defined fraud red flags; nearly 500 operate within a ~3‑mile Van Nuys corridor (CBS News hospice investigation).
- Federal enforcement rising: CMS and the DOJ revoked billing privileges, referred hundreds of cases and pursued prosecutions including a recent $16 million sham‑hospice sentencing (Hospice News coverage; DOJ press release on sentencing).
Overview
Auditors and reporters mapped an array of suspicious listings and billing patterns across Los Angeles County. Investigators say the behaviors include enrolling patients without delivering care, using fake or shared addresses, flipping licenses among owners, and multiple companies sharing the same personnel and contact details.
How investigators say the alleged scheme works
Multiple tactics are described by state and federal investigators and news reports. Examples include:
- Enrollment of patients for hospice services without delivering care or documentation of visits.
- Use of fake, shared, or vacant addresses (empty storefronts, auto parts shops, mail‑pileups) to mask where operations occur (CBS News project).
- Frequent license transfers or “flipping” among owners to hide prior violations and evade oversight.
- Shared key personnel across multiple companies and registration of dozens of entities at a single building.
The Van Nuys concentration
Investigators singled out a roughly three‑mile stretch along Van Nuys Boulevard as a focal point. Within that corridor:
- Nearly 500 hospice agencies are registered within ~3 miles; 137 list addresses on the boulevard itself.
- One building lists 89 companies; inspections from 2021–2025 found many deficiencies, including ~40 companies sharing senior staff.
- Reporters visiting offices found empty suites and piled mail, matching auditor red flags that complicate matching billing to real services (CBS News).
Scale and statewide context
California’s hospice market is unusually large. The state has roughly 2,800 hospice programs — far more than other large states (e.g., 91 in Florida, 39 in New York) — and Los Angeles County represents a large share of Medicare home‑health and hospice billing (about 18% nationally, per auditors).
Auditors also reported a seven‑fold jump in some hospice billing activity. Similar suspicious listings have appeared in other states including Arizona, Nevada and Texas (Hospice News, CBS News).
Regulatory response and enforcement actions
The Centers for Medicare & Medicaid Services (CMS) and the Department of Justice have stepped up actions: revoking billing privileges, referring hundreds of suspected fraud cases (amounting to billions) for criminal and civil investigation, and pursuing prosecutions. In 2025, CMS and related authorities revoked billing privileges and referred more than 300 fraud cases to DOJ.
California state officials have also acted: since 2022, after new rules from Governor Newsom, the state has revoked more than 280 hospice licenses and used state health department tools to halt suspicious payments and support prosecutions (California Governor’s office statement on license revocations).
Congressional oversight and audits
Members of Congress have pressed federal watchdogs for answers. A House committee asked the HHS Office of Inspector General to analyze enrollment and billing vulnerabilities in Los Angeles County after auditors identified millions in improper payments and suspected hospice fraud. An OIG report scheduled for FY2026 is expected to examine how actors enroll and bill Medicare for hospice and home health services (House Energy & Commerce letter to HHS‑OIG).
Industry and expert voices
“You can’t throw a rock without hitting a hospice,”
— Sheila Clark, president and CEO, California Hospice and Palliative Care Association
Palliative care leaders warn the issue has overwhelmed regulators. Dr. Ira Byock, a leading palliative care physician, said the speed and scale of alleged fraud have strained oversight and can delay investigations, leaving vulnerable patients and taxpayers exposed (CBS News).
Local reporting and undercover findings
Investigative reporting by outlets including CBS News and Los Angeles Times mapped suspicious addresses and documented empty or misused office spaces. Reporters found listings that include empty storefronts, an auto parts shop and offices that appear unoccupied or never existed — corroborating auditor red flags.
Why it matters for taxpayers and patients
Hospice care supports people at the end of life and is paid largely by Medicare. When providers enroll patients but do not deliver care, patients can suffer and Medicare pays for services that never happened. Improper payments reduce funds available for legitimate care and increase costs for taxpayers — hence urgency behind stopping the alleged overbilling of $105 million in a single year.
Implications for Fresno, California
Economic impact: Fresno hospitals, clinics and hospice providers could face higher scrutiny and administrative costs as investigations spread beyond Los Angeles. Tighter CMS enrollment or billing rules may delay payments to legitimate providers and strain budgets (Hospice News).
Political consequences: Fresno officials may face pressure to improve local oversight, speed reporting of suspicious providers and cooperate with federal investigators. Congressional representatives could push hearings or funding to reinforce anti‑fraud work (House Energy & Commerce letter).
Social and cultural effects: Fresno serves many older and medically vulnerable residents; fraudulent enrollment and siphoning of Medicare funds could disrupt care access, heighten demand for advocacy and verification help, and erode trust in hospice providers.
Practical advice for residents: Families should verify hospice providers before enrollment: check state license status, ask for references, confirm physical address and phone, and call hospitals or primary care providers about known legitimate partners. Suspected fraud can be reported to the California Department of Health Care Services and to CMS.
