Investigators say hospice fraud in California is massive — and Van Nuys is at the center of the scheme
A major investigation reveals widespread hospice fraud across California, concentrated in Los Angeles County and Van Nuys, where operators allegedly billed Medicare tens of millions for unnecessary or non-existent services, prompting expanded federal and state enforcement actions.
Key takeaways
- Concentration: Hundreds of hospices in California, especially Los Angeles County and a Van Nuys corridor, show state fraud indicators (CBS News).
- Financial impact: Auditors estimate Los Angeles County overbilled Medicare by about $105 million in 2019; federal referrals in 2025 involved billions (House Energy & Commerce; Hospice News).
- Methods: Tactics include billing for nonexistent care, identity theft, enrollment without consent, fake addresses, and license flipping (Justice Department; Hospice News).
- Response: CMS revoked thousands of billing privileges in 2025 and referred hundreds of cases to law enforcement as scrutiny increases (Hospice News).
What investigators found along Van Nuys Boulevard
Auditors and reporters mapping hospice operations in Los Angeles County identified a striking concentration near Van Nuys Boulevard. Within a three-mile radius investigators counted nearly 500 hospice agencies, with 137 listing addresses directly on the strip. More than half showed at least one state-defined indicator used to flag possible fraud — examples include no staff on-site, reused mailing addresses, or suspicious ownership links (CBS News).
Investigators also found 89 companies registered to a single Van Nuys building; regulators who visited suites there between 2021 and 2025 reported deficiencies and overlapping key personnel. On-site visits by reporters sometimes found offices unstaffed with mail piled at doors, consistent with suspected shell operations (CBS News).
How the alleged schemes worked
Prosecutors and oversight agencies describe recurring tactics used by illicit operators. Common patterns include:
- Billing for unnecessary or non-existent care: Medicare claims submitted for hospice services that patients did not need or never received (Justice Department; Hospice News).
- Identity theft and straw ownership: Front owners and foreign nationals were used to open bank accounts, lease space, and hide control of businesses (DOJ).
- Enrollment without consent: Beneficiaries placed into hospice without agreeing or without receiving services (Hospice News).
- Fake or unsuitable addresses: Empty storefronts, unrelated businesses, or unoccupied offices used as provider addresses (CBS News).
- License flipping: Licenses obtained and quickly sold before regulators could act, enabling poor operators to inherit provider numbers (Hospice News).
Scale and financial impact
The suspected schemes carry significant financial consequences. State auditors estimated Los Angeles County hospices overbilled Medicare by about $105 million in 2019 alone (House Energy & Commerce).
Federal watchdogs flagged broader concerns: the HHS Office of Inspector General estimated suspected hospice fraud nationwide at $198.1 million in fiscal 2023, and CMS referred hundreds of cases in 2025 involving billions in questionable billing (House Energy & Commerce; Hospice News).
Federal and state enforcement steps
Authorities have accelerated enforcement: CMS revoked billing privileges for about 4,780 providers and suppliers in 2025 and said it referred 343 suspected fraud cases that together represented $3.4 billion in questionable billing. The agency also launched a Fraud Tax Project to curb misuse of enrollment systems (Hospice News).
The Justice Department secured convictions in recent cases: in November 2025 four California residents were sentenced for roles in a $16 million hospice fraud and money-laundering scheme; one defendant had previously pleaded guilty and forfeited real estate and bank assets purchased with fraud proceeds (Justice Department).
Oversight limits and growing concern
Despite bans on certain enrollments and license revocations in California since 2019, indicators of fraud have persisted and in some measures increased, particularly in Los Angeles County. Experts warn the speed and scale of suspicious operations have outpaced the capacity of regulators (CBS News; Hospice News).
“You can’t throw a rock without hitting a hospice,” said Sheila Clark, president and CEO of the California Hospice and Palliative Care Association, describing the density and rapid expansion of providers in areas like Van Nuys.
“The speed of the growth in suspicious operations has outstripped the capacity of state and federal oversight — leaving vulnerable patients and taxpayer dollars at risk,” said Dr. Ira Byock, a leading palliative care physician (CBS News).
Implications for the World
The California findings carry global lessons:
- Economic impact: Large-scale Medicare losses can erode trust in national health programs and strain budgets, with cross-border implications for insurers and global healthcare firms (Hospice News; House Energy & Commerce).
- Political consequences: Rapid provider growth and weak enrollment controls create openings for exploitation; policymakers importing U.S. regulatory ideas may need tighter verification (CBS News).
- Social effects: Fraud preys on elderly and seriously ill patients, harming families and eroding confidence in hospice and palliative care (CBS News; DOJ).
- Practical applications: Regulators worldwide can adopt stronger identity checks, on-site inspections tied to billing, improved data cross-checks, and faster suspension of suspicious payments; families should verify providers and report concerns (Hospice News; House Energy & Commerce).
Reporting and transparency
Investigations by reporters, auditors, and federal prosecutors combined data, audits, and on-the-ground reporting to map concentrations of suspect providers and highlight the Van Nuys corridor as a focal point for organized attempts to exploit Medicare (CBS News; Hospice News; DOJ).
Sources: CBS News; Hospice News; House Energy & Commerce post; Justice Department.
