Feds say LA hospices signed up seniors who weren’t dying as part of $1.8 billion fraud bust. Some only found out when Medicare told them

This week, the U.S. Department of Justice carried out a bust, charging 15 people in the Los Angeles area with defrauding Medicare out of $1.8 billion. Of that, $138 million involved alleged hospice scams.

Among the accused are a hospice medical director alleged to have signed false certificates of terminal illness for people who weren’t terminally ill.

Another reportedly paid kickbacks to recruit older adults into hospice care they didn’t need, billing Medicare $21 million for their care.

A third is accused of “[enrolling] nonterminal Medicare beneficiaries into hospice care and [submitting] claims for medically unnecessary and often unprovided services, resulting in approximately $9.8 million billed to Medicare.” He was also accused of more than a dozen additional fraudulent hospice entities that collectively billed over $107 million.

While the allegations have yet to be proven in court, hospice fraud is an ongoing concern in California. State Attorney General Bob Bonta described it as an “epidemic” in the Los Angeles area.

Darren Lian, Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office, noted that it’s about more than ripping off Medicare.

“Healthcare fraud is not a victimless crime,” he said.

Just ask 71-year-old Southern California resident Linda Henry.

Hospice fraud leaves victims medically vulnerable

Henry learned she was a victim of hospice fraud in 2024 when she contacted Medicare to find out why it denied her coverage for an allergy test.

As AP News reports, a Medicare rep told her she’d been enrolled in hospice care for heart failure. It was the first she’d heard of either the hospice care or her supposed heart failure. She had never even had hospice care, but Medicare was billed for it.

Her doctor confirmed she was in good health, but it took eight months for Medicare to acknowledge she’d been the victim of hospice fraud. She told AP News that she believes her Medicare number was stolen.

Unfortunately, it was more than a bureaucratic headache. It made her medically vulnerable. That’s because Medicare will only cover services related to hospice care for those who are enrolled in it, as they are presumably near the end of life.

“I delayed physical appointments and my colonoscopy and all this stuff because I knew that we were going to fight about this and it wasn’t going to get paid,” she told AP News.

Pros and cons of the government crackdown

Critics suggest that the Trump administration is focused on healthcare fraud crackdowns in Democratic states like California, Minnesota and New York.

“The Trump Administration is attempting to take the issue of fraud — a very real, and national issue — and weaponize it against Democratic states,” California’s attorney general said in February.