Hospice Fraud Explodes in California After State ‘Crackdown’: 742 Flagged Providers, $105 Million Overbilled, and Ghost Offices

In a damning new investigation titled “Hospice Fraud: Ground Zero in Los Angeles,” CBS News has exposed widespread fraud plaguing California’s hospice industry, particularly in Los Angeles County, where hundreds of providers exhibit multiple red flags of abuse despite state vows to crack it down. This revelation builds on earlier whistleblowing efforts, including independent journalist Nick Shirley’s groundbreaking exposés on similar “ghost” operations in government-funded programs across Minnesota and California, as well as investigative reporter Christian Hartsock’s recent undercover probe into Medi-Cal hospice and home health fraud, underscoring a broader pattern of taxpayer-funded scams in blue states.

California investigative reporter Christian Hartsock, in collaboration with California State Assemblywoman Alexandra Macedo for the California Courier, released a breaking undercover investigation just days ago, exposing dozens of suspicious hospice and home healthcare agencies in Los Angeles. Their on-site visits revealed hundreds of companies registered to crumbling buildings with no ramps, no handicap parking, disconnected phones, and signs reading “Out to Lunch.” Hartsock’s footage highlights how over $3.5 billion in Medi-Cal fraud has been identified in Los Angeles County alone, with 31% of all U.S. hospices registered there despite only 2% of the nation’s aging seniors residing in the area. This investigation, detailed in a video report, paints a vivid picture of taxpayer dollars funneled into non-existent or fraudulent operations.

These findings align with the California Globe’s ongoing coverage of systemic graft, such as the staggering $3.5 billion in suspected hospice and home-health fraud centered in Los Angeles and the seven-fold increase in L.A. hospices amid nonprofit funding scandals.

The CBS probe reveals that despite a 2022 moratorium on new hospices and promises from Gov. Gavin Newsom to eradicate abuse, fraud has ballooned. A CBS News analysis of records for every hospice operating in Los Angeles County—roughly 1,800 total—found that over 700 trigger multiple red flags for fraud as defined by the state, including clustered addresses, zero-patient reports paired with billing, and other warning signs identified in prior state audits.

In one extreme concentration along a stretch of Victory Boulevard in Van Nuys, nearly 500 registered hospice companies operate within just three miles of each other, with 137 along the boulevard alone and 89 crammed into a single building. Visits to these sites revealed empty offices, piled-up mail, disconnected phone lines, and no signs of actual patient care. “You can’t throw a rock without hitting a hospice,” says a hospice advocate when driving down the boulevard.

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Auditors previously estimated that L.A. County hospices overbilled Medicare by $105 million in a single year, and nationwide suspected Medicare hospice fraud reached almost $200 million in 2023 alone, according to the U.S. Department of Health and Human Services Office of the Inspector General. CBS highlighted cases where hospices reported an average of zero patients in 2024 yet still submitted bills to Medicare in at least seven instances. Despite these indicators, hundreds persist: the investigation found 742 hospice companies still operating with clear fraud red flags, even four years after California’s crackdown began. The state has revoked licenses—around 280 since 2024—but the problem has grown rather than diminished.

This echoes Shirley’s daycare discoveries and Hartsock’s hospice revelations, where facilities existed on paper but not in reality, siphoning taxpayer funds without delivering services.

California’s response has been lackluster, as detailed in the California Globe’s report on the seven-fold increase in L.A. hospices amid nonprofit funding scandals. Rep. Kevin Kiley (R-CA) has requested a GAO audit of California’s “staggering fraud,” including hospice schemes, billions in unemployment rip-offs, and homelessness waste. Attorney General Rob Bonta told CBS News, “We need to be responsive to the red flags,” citing 109 ongoing prosecutions. “I share the frustration… and will not stop until “hospice fraud is rooted out.”

These exposés come amid broader federal crackdowns. Vice President JD Vance is leading an anti-fraud task force targeting California, coined by Rep. Kiley as “the fraud capital of America.”  President Trump’s new DOJ National Fraud Enforcement Division is already probing Newsom’s administration for drowning in billions of waste, from EDD’s $55 billion pandemic losses to $37 billion in homeless spending with rising encampments.

With CBS now confirming hospice as another fraud hotspot—over 700 of 1,800 L.A. County providers flagged, $105 million in estimated annual overbilling, nearly $200 million in national suspected losses for 2023, and ghost-like operations spanning miles along LA’s streets—with Hartsock’s boots-on-the-ground evidence adding to the exposure–the pattern is undeniable: California’s unchecked, unverified progressive programs have become magnets for grift on an industrial scale, siphoning hundreds of millions from Medicare, billions from taxpayers, and leaving vulnerable patients and homeless individuals betrayed while the fraud machine rolls on– unchecked for years.

This is not mere incompetence; it is systemic betrayal of public trust and fiscal responsibility on a staggering scale. The question is no longer whether Sacramento will act—history, including four years of failed promises since the moratorium, shows it won’t. The real reckoning is coming from Washington: federal intervention, audits, prosecutions, and funding freezes that force accountability where state Democratic leaders have repeatedly failed.