Federal Medicare administrator Dr. Mehmet Oz is vowing to decertify up to 1,000 fraudulent hospice providers in California after uncovering a staggering $3.5 billion fraud scheme orchestrated by criminal networks that has stolen from American taxpayers while denying dying patients legitimate care.
Story Snapshot
- Over 700 of Los Angeles County’s 1,800 hospices display multiple state-defined fraud red flags, with organized crime rings linked to the scam
- Criminal recruiters buy Medicare numbers from seniors for cash or goods at $1,000-$3,000 per beneficiary, blocking legitimate hospice care
- Los Angeles County alone accounts for 18% of all national home health billing despite representing a tiny fraction of the population
- Dr. Oz pledges mass decertifications targeting half of California’s hospices, declaring Medicare “not open for business for fraudsters.”
Unprecedented Fraud Epidemic in Los Angeles
Los Angeles County has become ground zero for hospice fraud, with approximately 1,800 hospice providersโa sevenfold increase in just five years.
A CBS News investigation revealed that over 700 of these facilities display multiple fraud indicators defined by California state officials. This concentration represents an anomaly nationwide, as 49 other states lack comparable fraud problems.
Medicare pays approximately $260 per day per hospice patient, creating lucrative opportunities for criminals who exploit the system through ghost patients, identity theft, and fraudulent billing practices that have cost taxpayers an estimated $3.5 billion in Los Angeles alone.
Criminal Networks Exploit Vulnerable Seniors
The fraud operates through organized crime networks, including Russian and Armenian mafia groups, who have corrupted the hospice system.
Recruiters visit senior centers and community locations, offering cash payments or goods in exchange for Medicare numbers, which they then sell to fraudulent hospice providers for $1,000 to $3,000 per beneficiary. Federal prosecutors previously charged 73 Armenian-American defendants with $100 million in Medicare theft through phantom clinics.
These schemes employ tactics including “upcoding” services, “unbundling” procedures to inflate charges, and enrolling non-terminally ill patients through corrupt physicians receiving kickbacks.
Once enrolled, legitimate hospice providers cannot access these Medicare numbers, effectively blocking dying patients from receiving genuine end-of-life care.
๐๐ซ. ๐๐ณ ๐ฉ๐ฅ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐ญ๐๐๐ค๐ฅ๐ ๐ก๐จ๐ฌ๐ฉ๐ข๐๐ ๐๐ซ๐๐ฎ๐: "๐๐จ ๐ง๐จ๐ญ ๐ฌ๐ญ๐๐๐ฅ ๐๐ซ๐จ๐ฆ ๐ญ๐ก๐ ๐๐ฆ๐๐ซ๐ข๐๐๐ง ๐ฉ๐๐จ๐ฉ๐ฅ๐": Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services (CMS), has pledged to combat hospice fraud, particularlyโฆ pic.twitter.com/IwBB48BfBp
— Ranked News (@RankedNews) March 14, 2026
Trump Administration Takes Direct Action
Dr. Oz visited California in January 2026, conducting ride-alongs with investigators in fraud hotspots and meeting with local prosecutors including Bill Essayli.
During a March 2026 CBS interview, Oz declared his intention to decertify 900 to 1,000 suspect hospices, stating, “If they steal the money, they’ll steal your health.
My plan is to take half the hospices in California and take away their ability to bill us.” The Centers for Medicare and Medicaid Services has deployed personnel to conduct on-site visits at facilities, triggering fraud checklists.
This aggressive federal enforcement represents a stark departure from the previous administration’s approach and addresses taxpayer concerns about government waste and criminal exploitation of federal programs.
State Response and Persistent Challenges
California Attorney General Rob Bonta labeled the situation an “epidemic” in 2025, acknowledging false claims, kickbacks, and patients enrolled without their knowledge.
The state has revoked approximately 280 hospice licenses and imposed a moratorium on new licenses, yet hundreds of fraudulent providers continue operating.
Governor Gavin Newsom’s office defended state efforts, citing a Hospice Fraud Task Force launched years ago that has made arrests and shared intelligence.
However, Dr. Oz questioned the effectiveness of state information-sharing, highlighting tensions between federal and state authorities.
The 2023 HHS Office of Inspector General reported $198.1 million in suspected nationwide hospice fraud, underscoring that the problem extends beyond California but remains most concentrated there.
The Trump administration’s decisive action to protect Medicare and taxpayers demonstrates renewed commitment to fiscal responsibility and combating fraud that flourished under lax oversight.
By targeting corrupt physicians, criminal networks, and fraudulent providers, Dr. Oz’s enforcement initiative aims to restore integrity to hospice care while recovering billions stolen from American citizens.
This crackdown serves as a critical reminder that government programs require vigilant oversight to prevent exploitation by those who view taxpayer dollars as easy targets, and that legitimate healthcare providers and vulnerable seniors deserve protection from criminal enterprises masquerading as caregivers.
Sources:
Dr. Oz pledges to tackle hospice fraud: “Do not steal from the American people” – CBS News
‘Boots on the ground’: Dr. Oz, CMS leaders visit fraud-ridden states – Hospice News
Dr. Oz, CMS leaders visit home health fraud hot spots – Home Health Care News
