California Cracks Down on $267 Million Hospice Fraud Scheme in Los Angeles

California just delivered a knockout blow to a sprawling hospice fraud racket that targeted Medi-Cal, the state’s Medicaid program, in Los Angeles. The scheme involved 14 fake hospice providers who billed the government for millions of dollars in hospice care that was never delivered. Governor Gavin Newsom and Attorney General Rob Bonta announced criminal charges against organized crime groups behind the scam, emphasizing the state’s commitment to protecting taxpayer dollars and Medi-Cal members.

This isn’t some minor billing error or loophole abuse. According to the California Department of Health Care Services (DHCS) and the Division of Medi-Cal Fraud and Elder Abuse (DMFEA), the fraud was deliberate and systematic. Over $267 million in improper claims were paid using stolen identities to enroll fictitious patients and submit false hospice claims. Not a single legitimate hospice service was provided under this scheme.

Governor Newsom wasted no time highlighting the stakes: “We hold accountable anyone who tries to rip off taxpayers and take advantage of public programs, particularly those as sensitive as hospice care.” He also pointed out that since these are state charges, former President Trump cannot pardon the perpetrators, a jab at the Trump administration’s notorious pardon abuses.

Attorney General Bonta was equally blunt: “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.” The state’s swift response included suspending payments, revoking licenses for all fraudulent providers, disenrolling thousands of fake patients, and referring the case for criminal prosecution.

California’s crackdown is part of a broader, multi-year effort under Newsom’s leadership to combat hospice fraud. The state has revoked over 280 hospice licenses in the last two years, paused new hospice licenses, arrested 284 criminals, and continues to investigate hundreds more providers. Advanced data analytics, strict enrollment verification, and multidisciplinary audit teams have been key to detecting and stopping these scams before they can do more damage.

California’s Health and Human Services Secretary Kim Johnson stressed the importance of vigilance: “Protecting the millions of Californians who depend on Medi-Cal is our priority, and we will not tolerate bad actors.” DHCS Director Michelle Baass added that the state’s safeguards “worked quickly and effectively” to halt improper payments and hold fraudsters accountable.

This case exposes how vulnerable public health programs remain to exploitation by organized crime, especially when oversight is weakened. It also underscores the critical need for robust enforcement and transparency to protect both taxpayers and patients. While the Trump administration rolled back regulations and pardoned major health care fraudsters, California is doubling down on accountability and integrity in its health care system.

We will keep watching how this prosecution unfolds and whether it sets a precedent for other states grappling with similar fraud. For now, California sends a clear message: fraud at the expense of sick and vulnerable people will not be tolerated or pardoned.