California’s Hospice Fraud Epidemic: $600 Million Stolen, 447 Providers Suspended — and Sacramento Still Can’t Finish the Paperwork

Walk down Victory Boulevard in Los Angeles and you can’t throw a rock without hitting a hospice provider. Not because there’s been a surge of dying patients. Because a Medicare identification number is worth more to a fraudster than a stolen credit card, and California took years to figure out that the people running the scam already knew that.

In April 2026, federal agents suspended 447 hospices and 23 home health agencies across greater Los Angeles, alleging they defrauded Medicare of an estimated $600 million. Attorney General Rob Bonta announced charges against 21 suspects in a separate scheme that bilked the state of $267 million. The FBI made arrests. Dr. Mehmet Oz, Trump’s Medicare czar, showed up at the scene. It was theatrical, it was aggressive, and it was, by any honest reading, years late.

Here’s what the press releases left out: the regulatory fix that could have prevented much of this is still sitting in Sacramento, unfinished.

California’s auditors flagged the hospice fraud problem in March 2022. The state responded by placing a moratorium on new hospice licenses — a reasonable first step. Lawmakers directed the California Department of Public Health to issue emergency regulations within a year, tightening who can obtain a license, requiring proof of community need, and making it harder for fraudsters to hide behind complex ownership structures. That deadline came and went. The Legislature extended it. That extension expired. The regulations still aren’t finalized. The Department of Public Health says it’s still “revising draft regulations based on feedback from industry representatives.”

The industry representatives, for reference, are the same industry that just saw 447 of its members suspended for defrauding taxpayers.

The moratorium itself expires in January 2027. If the emergency regulations aren’t in place by then, the door swings back open. Hundreds of potentially fraudulent applicants who were blocked by the moratorium can try again. California’s own auditors found that Los Angeles County hospices overbilled Medicare by $105 million in a single year — and that was before the full scope of the fraud became clear.

The human cost is harder to quantify but more consequential. Hospice fraud isn’t just a financial crime. When scammers fraudulently enroll seniors in hospice without their knowledge, those seniors lose access to treatments that could extend their lives. Medicare stops covering curative care the moment a patient enters hospice. Scammers know this and count on patients — often elderly, often immigrants, often unfamiliar with how the system works — not noticing or not being able to fight back.

Newsom’s office has published a list of enforcement actions. The numbers are real: 280 licenses revoked, 284 defendants charged, 119 criminal cases filed since 2021. What the press releases don’t mention is that the structural fix — the regulation that changes who gets a license in the first place — has been delayed so many times that a legitimate question now hangs over Sacramento: who benefits from the delay?

California has prosecuted the symptom for years. The cure keeps getting rescheduled.

— Jose E. Navarro, The Navarro Report / Human-Directed AI Journalism: Research, analysis, and editorial direction by the author. Drafted in partnership with Claude AI (Anthropic).