Van Nuys at the Center of a Growing Medicare Scandal: Investigators Say Hundreds of Hospices May Be Ripping Off Taxpayers
A CBS News investigation has uncovered persistent Medicare hospice fraud devastating Los Angeles County, concentrated along Van Nuys Boulevard; auditors estimate nearly half of the county’s 1,800 hospices show red flags, with about $105 million in overbilling.
Key takeaways
- Auditors estimate hospice providers in Los Angeles County overbilled Medicare by about $105 million in one year — a figure tied to audits and congressional inquiries (House Energy & Commerce).
- More than 700 of roughly 1,800 hospices in the county trigger multiple state-defined fraud red flags (CBS News).
- A dense corridor on Van Nuys Boulevard contains nearly 500 hospice agencies; investigators found shared addresses, empty offices and buildings listing dozens of companies (CBS News; House Energy & Commerce).
- State and federal authorities are increasing enforcement — revocations, suspensions and prosecutions have accelerated, but challenges remain.
An expanding probe of hospice billing and operations
Federal and state investigators have intensified scrutiny of hospice providers nationwide. The Department of Justice has prosecuted sham operations, winning prison terms and asset forfeitures in major cases; one recent federal case involved four California residents who billed Medicare about $16 million for unneeded or unprovided services (DOJ press release).
CMS and DOJ describe the activity as “aggressive,” forming teams focused on hospice and home health fraud. In 2025, CMS reported hundreds of fraud referrals tied to billions in suspicious billing and thousands of provider enrollments revoked nationwide (Hospice News).
Why LA County is different
California hosts far more hospice programs than other states — roughly 2,800 statewide versus 91 in Florida and 39 in New York — and Los Angeles County alone accounts for nearly half of the nation’s hospice providers. That scale creates oversight gaps and concentration points where fraud can flourish (House Energy & Commerce).
Investigators flagged several troubling patterns
- Shared addresses and empty storefronts: Agencies listed at vacant properties, an auto parts store and other unlikely locations (CBS News).
- Multiple companies at single buildings: Regulators found 89 companies registered to one Van Nuys building and deficiencies across multiple suites (House Energy & Commerce).
- Shared staff and “license flipping”: Nearly 40 companies shared key personnel; operators use quick transfers of licenses or straw owners to evade detection (CBS News video).
State and federal enforcement actions
California officials report revoking more than 280 hospice licenses since 2022 under tighter rules to stop sham providers; the state has also suspended Medi-Cal payments to suspicious operators and referred cases to prosecutors (Governor’s office release).
Federally, CMS has tightened enrollment checks and issued memos warning of abuse while HHS-OIG and DOJ pursue criminal and civil cases. Congressional leaders have pressed HHS-OIG for answers about high improper payment rates and dramatic billing increases in parts of LA County (House Energy & Commerce).
Notable prosecutions and industry reaction
Prosecutors have brought cases involving organized fraud, straw ownership and money laundering; one high-profile prosecution resulted in prison terms and forfeiture after defendants used shell companies to bill for services not provided (DOJ).
Industry groups emphasize that most hospices provide legitimate care. Sheila Clark, president and CEO of the California Hospice and Palliative Care Association, told investigators the agency density in some LA neighborhoods is extreme:
“You can’t throw a rock without hitting a hospice.”
Palliative experts warn that patient harm and strained oversight are central concerns (CBS News).
Tactics used by alleged fraudsters
Investigators describe repeat tactics that drain Medicare and Medicaid funds and undermine trust in hospice care:
- Enrolling patients who did not receive services or were not terminally ill.
- Using straw owners and fake IDs to hide true operators.
- Listing multiple agencies at a single address to scatter billing.
- “License flipping” — moving patients and billing under new provider names after enforcement actions (Hospice News).
National context and scale
Hospice fraud is not limited to California. CMS and DOJ have identified hotspots in states such as Arizona, Nevada and Texas; suspected fraud totals reached $198.1 million in fiscal 2023, and federal agencies continue to devote resources to the problem (Hospice News).
What regulators say they are doing
Officials report improved enrollment checks, payment suspensions and criminal referrals. The DOJ emphasizes prosecutions and asset forfeiture, while state agencies pursue license revocations and Medi‑Cal suspensions. Agencies say they are boosting data sharing and sting operations to shut down sham providers (Hospice News; Governor’s office release).
Reporting challenges and unanswered questions
Investigations rely on billing patterns, licensing records and site visits. Many suspect addresses are vacant, shared or implausible; a California Post database shared with reporters lists hundreds of suspect hospices and home health agencies with questionable locations, complicating efforts to identify responsible parties and estimate total taxpayer loss (CBS News).
Implications for the United States
The Van Nuys pattern shows how weak enrollment checks and rapid provider growth can allow bad actors to multiply. Lawmakers may push for stricter enrollment rules, clearer ownership disclosure, faster data sharing, tougher penalties and more funding for audits and prosecutions to protect patients and tax dollars (House Energy & Commerce; Hospice News).
Sources and further reading
- CBS News project on hospice fraud
- CBS News video report
- House Energy & Commerce post on LA hospice fraud
- DOJ press release on sentencing in hospice fraud case
- Hospice News on CMS and DOJ enforcement
- California Governor’s office release on license revocations
- Los Angeles Times reporting on hospice growth and investigations
Reporting by Times Media Service; sources as listed.
