Congress requests evidence after reports on California hospice fraud

A California legislator’s investigation into hospice fraud in the Los Angeles area shows that almost 300 licensed hospice providers are tied to a small number of addresses.

The probe, which reportedly includes an empty Los Angeles building that supposedly housed hospices, comes as a U.S. House committee investigates hospice fraud in California and is requesting documents from the state.

Assemblymember Alexandra Macedo, R-Tulare, recently investigated hospice fraud in Southern California after suspecting that there were multiple examples.

“I was looking at our budget shortfalls that we have throughout this year, and health care kept popping up as something that was a cause for concern by the state auditor,” Macedo told The Center Square this week. “I started trying to figure out why health care costs were exploding, but we’re not necessarily seeing that jive with the quality of health care and access to health care as a state.”

A letter Macedo sent to Congressional representatives on March 16, the same day President Donald Trump convened a new task force targeting fraud, detailed the results of her investigation.

“I want Congress to have their part in the Medicare fraud that’s going on,” Macedo said. “If this is happening in California, it’s happening in other states. They have the ability to oversee the funding for Medicare, and I’m hoping they also put pressure on the state of California to enact these regulations to make sure there are fraud controls in place.”

In the course of her investigation, as Macedo dug deeper into the state auditor’s reports and databases from agencies like the California Department of Health and Human Services, she found one thing that was a persistent problem – hospice and Medicare fraud.

“We found 197 businesses that were registered to the Friar Street address,” Macedo told The Center Square. “We saw 81 registered at another facility not that far away, and another 19 or 20. It was just unbelievable.”

After driving out to the addresses where Macedo suspected hospice fraud was taking place, she found facilities and empty lots that were visibly not the sites of real operating health care businesses. She even called the phone numbers associated with those businesses and found that many were disconnected.

On March 11, Macedo sent a letter to Gov. Gavin Newsom detailing the result of her investigation, calling on the governor to implement regulations that would deny bad actors licenses to operate hospice facilities, and to revoke licenses of those operations that are either not in compliance or are observably fraudulent businesses. Several other Republican lawmakers also signed that letter.

Macedo also called on other state officials to act quickly to crack down on fraudulent hospice care businesses that hurt sick people.

“I absolutely want [California Attorney General] Rob Bonta to get to work,” Macedo told The Center Square. “He has the army and the cavalry to come in and assist in the prosecution for this fraud and make the bad guys afraid, never do this again, and show people that justice is being served.”

Macedo’s investigation shows a road map to where the California Department of Justice should look, Macedo said. The fraud she found in her investigation hurts real people who are sick and have fraudulently been enrolled in hospice care, she continued.

“This is putting California’s most vulnerable populations in jeopardy,” Macedo said.

The California Commission on Aging declined to comment on Macedo’s investigation on Wednesday.

In a press release sent on Tuesday, Newsom’s office said 280 hospice care licenses have been revoked in California over the last two years, and 300 additional hospice care providers are being investigated. Approximately 284 people have been arrested in connection with hospice fraud in the state, Newsom’s office continued.

In an emailed response to The Center Square on Wednesday, the governor's office said Newsom took action on hospice fraud years ago, signing legislation that placed a moratorium on new hospice licenses.

"Under Governor Newsom’s leadership, California also established a multi-agency Hospice Fraud Task Force, bringing together CDPH, CalHHS, DHCS, DSS, and the Department of Justice to share intelligence, investigate wrongdoing, make arrests, and coordinate enforcement," Marissa Saldivar, a spokesperson for the governor's office, wrote to The Center Square. "The state continues to take coordinated action to suspend Medi-Cal payments, revoke licenses, and pursue prosecutions.”

According to the U.S. House of Representatives Committee on Oversight and Government Reform, an estimated $3.5 billion worth of hospice fraud has occurred in Los Angeles County alone.

A separate investigation by CBS News also found examples of hospice fraud in California, prompting action from Congress. In a March 23 letter to Newsom, that committee said that hospice care providers in Los Angeles County alone overbilled Medicare by at least $105 million in a single year, and referenced potentially fraudulent hospice care businesses registered to the same Van Nuys neighborhood Macedo looked into in her investigation.

“Despite these red flags, it appears California has enabled hospice providers to defraud the American taxpayer and exploit vulnerable patients,” the letter read.

The committee also requested documents from various California agencies, including the Department of Public Health, the Department of Health Care Services, the Department of Social Services and the Department of Justice regarding Medi-Cal and Medicare hospice programs.