Dr. Oz issues stunning revelation: US officials ‘took out’ 221 hospices in just 10 weeks — all of them in LA. Why it’s a deeper problem than you think

That's the uncomfortable backdrop behind a wave of enforcement activity in Los Angeles, where authorities including Dr. Mehmet Oz – now the head of the Centers for Medicare and Medicaid Services – say fraudulent hospice schemes have siphoned tens of millions of dollars from Medicare.

Eight L.A.-area people were arrested in early April after authorities say they schemed to defraud the health care system of more than $50 million by billing Medicare for patients that weren't terminally ill or qualified for hospice care.

"The defendants charged today allegedly turned hospice care into a cash producing operation, resulting in more than $50 million in losses to taxpayers," Inspector General T. March Bell of the U.S. Department of Health and Human Services said in a news release announcing the arrests (1). "The magnitude of the losses underscores a deliberate abuse of the authority and trust afforded to health care providers."

And while the headlines focus on arrests and political finger-pointing, the real story sits closer to home: a system that's surprisingly easy to exploit and difficult for families to navigate.

What actually happened in LA

At the center of the crackdown is hospice care, a Medicare benefit designed for patients nearing the end of life. It's supposed to provide comfort when someone is terminally ill. Instead, prosecutors say some operators turned it into a business model.

In several cases, hospice providers allegedly enrolled patients who weren't terminally ill at all. Some were even offered cash incentives – hundreds of dollars a month – to sign up. Once enrolled, providers allegedly billed Medicare for unnecessary services, sometimes supplying basic items like vitamins or equipment to justify the claims. One case alone allegedly involved more than $9 million in billing.

Federal officials say multiple schemes like this were operating across the Los Angeles area. The Centers for Medicare and Medicaid Services, now led by Oz, has taken an aggressive stance, with Oz saying authorities "took out" 221 hospice providers from the system in recent weeks (2).

Nationally, suspected hospice fraud cost the health care system $198.1 million in 2023, according to HHS (3). In addition to the LA cases, other states – including Arizona, Nevada, Texas, Ohio and Georgia – have reported similar fraud (4).

Why hospice is especially vulnerable

Hospice care sits in a strange corner of the health care system, one that blends medicine, emotion and timing.

That combination creates opportunity. Unlike many medical services, hospice eligibility depends on a doctor's judgment that a patient likely has six months or less to live. There's no single test that confirms it. That makes oversight tricky and opens the door for abuse.

Add in the financial structure, and the incentives become clearer.

Medicare often pays hospice providers a daily rate per patient. The longer someone stays enrolled, the more revenue a provider collects. If a patient isn't actually terminally ill, that stream can stretch far longer than intended.

What this means beyond California

Federal officials have already signaled that similar reviews could expand, and California itself has spent years trying to rein in a surge of hospice providers, revoking hundreds of licenses and pausing new ones. The California crackdown is a reminder that even well-intentioned systems can be gamed, and that oversight often lags behind innovation.