Trump Admin Exposes Shocking Minnesota-Style Fraud Scheme In New State

Ghost patients. Sham companies. Offshore owners. Corrupt doctors. Auditors and prosecutors say hospice fraud in Los Angeles has exploded into a taxpayer-funded free-for-all, with billions siphoned off through fake patients, unnecessary services and, in many cases, no care at all.

“Hospice is crazy here,” said Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services. “You’ve got hospice that’s grown seven-fold in the last five years. They represent about three and a half billion dollars of fraud, we believe, just in LA County.”

California Attorney General Rob Bonta echoed the warning last year, calling the situation an outright crisis.

“Hospice fraud has become an epidemic in California, specifically in the greater Los Angeles area,” Bonta said.

State and federal investigators say fraudulent providers routinely submit false claims, pay recruiters to sign up seniors regardless of medical need and enroll patients who don’t even know they’ve been placed in hospice until they seek legitimate medical care elsewhere.

“As a hospice owner, I could sign up everybody in this room for hospice,” one Los Angeles hospice owner told Fox News.

A whistleblower said the system is riddled with loopholes, including no cap on the number of hospices a single person can own and no requirement that applicants even reside in the United States.

“It’s all just paperwork. I could fill an application out in Kazakhstan if I want, and get a hospice license.”

Oz explained how the scam works. Recruiters target shopping centers and senior centers, offering walkers, nutritional drinks, cash and weekly visits in exchange for Medicare numbers. Those numbers are then sold to providers for $1,000 to $3,000, with recruiters collecting monthly kickbacks as long as the senior remains enrolled.

Hospice care is meant for terminally ill patients with a life expectancy of six months or less. Nationally, more than half of hospice patients die within 18 days. In Los Angeles, the average stay exceeds three months, and court records show some providers billing Medicare for 18 months or longer.

In LA County, hospices receive about $260 per patient per day, with additional fraud driven by “upcoding” and “unbundling” to inflate invoices.

“A Medicare MIB number is more lucrative than a credit card,” said Sheila Clark, president of the California Hospice and Palliative Care Association. “They’re human traffickers. They’re trafficking beneficiaries in and out of hospices, home health.”

Los Angeles County has 1,923 hospice providers, more than 36 states combined. State auditors found 210 hospice agencies packed into a single square mile in Van Nuys, including one building licensed for 112 hospices with no visible staff or services.

“These are Russian, Armenian gangs, mafia that are leading a lot of these efforts, we believe, have been able to corrupt, and work with doctors who are willing to lie,” Oz said.

California has imposed a moratorium on new hospice licenses, but hundreds of fraudulent operations remain active. Clark said the fallout hits seniors hardest.

“They need the care but can’t get it,” she said. “We need to listen to these people when they say, ‘I’ve been scammed.’”

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