California stops major hospice fraud scheme in LA, brings criminal charges to hold fraudsters accountable

SACRAMENTO – Governor Gavin Newsom today announced with Attorney General Rob Bonta that California is taking decisive action to dismantle a large-scale identity theft and hospice fraud scheme targeting the Medi-Cal program in Los Angeles. 

This joint enforcement effort — which began in 2024, prior to the Trump administration’s regulation rollback following President Trump’s pardon of the man behind the biggest health care fraud in U.S. history — led by the California Department of Health Care Services (DHCS) and the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), underscores California’s continuous commitment to protecting Medi-Cal members and safeguarding taxpayer dollars from fraud, waste, and abuse.

“This isn’t a political game for us. This is about protecting taxpayer dollars, protecting programs sick and vulnerable Californians rely on, and protecting our state,” said Attorney General Rob Bonta. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided, yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system. This wasn’t a mistake or a loophole; it was deliberate fraud. This kind of abuse undermines trust, drains critical resources, and threatens care for those who truly depend on it. This is a perfect example that we have taken a firm stand to investigate, prosecute, and shut down hospice fraud wherever it exists.”

DHCS and DMFEA are bringing charges against transnational criminal networks that used stolen identities to fraudulently enroll individuals in Medi-Cal and bill for hospice services that were never provided. 

The scheme involved 14 fraudulent hospice providers and resulted in more than $267 million in improper claims paid with state and federal funds. 

The state acted swiftly to protect Medi-Cal and taxpayer dollars by:

• Using fraud detection systems to identify irregularities and trigger an immediate investigation, ensuring rapid containment before additional payments were made
• Stopping payments and suspending all fraudulent hospice providers
• Disenrolling thousands of fraudulent enrollments linked to stolen identities
• Revoking licenses for all identified fraudulent hospice providers in coordination with the California Department of Public Health
• Submitting criminal prosecution referrals to DMFEA
• Further updating system safeguards, including claim edits that automatically block any hospice claim unless a valid authorization form is on file and verified, ensuring the member has elected hospice care and preventing unauthorized or fraudulent billing before payment is released.

“This investigation demonstrates what California can accomplish when our state agencies work together with urgency and purpose,” said California Health and Human Services Secretary Kim Johnson. “Protecting the millions of Californians who depend on Medi-Cal to meet their health needs is our priority, and we will not tolerate bad actors. DHCS moved swiftly to stop these payments, disenroll fraudulent accounts, and refer perpetrators for criminal prosecution. Our work is not done, and we will continue strengthening the safeguards that keep Medi-Cal sound and trustworthy for the people it was designed to serve.”

“Fraud is a direct attack on the health and well‑being of Medi‑Cal members, and we will not hesitate to act,” said DHCS Director Michelle Baass. “Our safeguards worked quickly and effectively—identifying suspicious activity, stopping improper payments in their tracks, and prompting immediate suspension of the providers involved. In coordination with the California Department of Justice’s Division of Medi‑Cal Fraud and Elder Abuse, California’s Medicaid Fraud Control Unit, we are pursuing full accountability while reinforcing our oversight systems to protect Medi-Cal members and the taxpayers who fund this program.”

A multipronged approach to fraud prevention

California has spent years building one of the most comprehensive hospice fraud enforcement efforts in the country. Under Governor Newsom, the state established a multi-agency Hospice Fraud Task Force, strengthened program integrity oversight, and implemented a moratorium on new hospice licenses that remains in effect. Over 280 hospice licenses have been revoked over the past two years, an additional 300 providers are under investigation, and 284 criminals have been arrested, all while new licenses are paused.

DHCS’ program integrity safeguards were critical in detecting and stopping this scheme. Our comprehensive strategy includes:

• Advanced data analytics that flag suspicious patterns before payments are made.
• Multidisciplinary audit and investigation teams operating in field offices statewide.
• Strict provider enrollment checks, including license verification and site visits.
• Enhanced identity checks for Medi-Cal applicants, including enhanced residency verification and multifactor authentication requirements in 2026.
• Policy authority and utilization management controls that allow DHCS review and approve hospice services, with expanded oversight taking effect July 2026.
• Ongoing collaboration with law enforcement and health plans to investigate and prevent fraud statewide.

Reporting suspected fraud: DHCS encourages anyone who suspects Medi-Cal fraud to report it immediately:

• Hotline: (800) 822-6222
• Email: fraud@dhcs.ca.gov
• Online: https://www.dhcs.ca.gov/individuals/Pages/StopMedi-CalFraud.aspx