House Oversight Committee Investigates Alleged Fraud in California Hospice Programs
WASHINGTON—The House Committee on Oversight and Government Reform has launched an investigation into potential fraud within California’s hospice programs, alleging that the Newsom administration has been aware of issues for at least four years but has failed to adequately address them. The investigation, led by Chairman James Comer (R-Ky.), centers on concerns that hospice providers are defrauding Medicare and exploiting vulnerable patients.
Alarming Reports of Fraudulent Activity
Recent reports have revealed evidence of alleged fraudulent activity, including overbilling Medicare and enrolling beneficiaries without their knowledge. The Committee’s concerns stem from the roles of California’s Departments of Public Health, Social Services, and Health Care Services in overseeing these federally funded programs. Lawmakers believe insufficient internal controls and oversight have allowed fraud to persist, resulting in taxpayer funds being misused and patients being exploited.
Significant Increase in Hospice Providers and Billing
A March 29, 2022, report from the California State Auditor highlighted a 1,500 percent increase in hospice providers in Los Angeles County since 2010. The report indicated that providers overbilled Medicare by at least $105 million in a single year. A whistleblower similarly reported minimal safeguards to prevent fraudulent licensing, including allowing individuals living abroad to obtain licenses and schemes involving the recruitment of seniors.
Billions Lost to Fraud
The Centers for Medicare and Medicaid Services (CMS) estimates that Los Angeles County alone accounts for $3.5 billion in hospice fraud, representing 18 percent of all hospice billing in the United States. California Attorney General Rob Bonta has described hospice fraud in the state, particularly in Los Angeles County, as “an epidemic.”
Red Flags Identified in 2022 Audit
The 2022 audit identified several warning signs of fraud, including:
- Many providers listed at the same address
- Low patient counts compared to the rest of the state
- Patients listed as terminally ill being discharged alive
- Excessive billing for potentially unprovided services
- Staff shared across multiple hospice providers
Committee Requests Documents and Communications
The Committee is requesting documents and communications regarding California’s oversight and internal controls to detect and prevent fraud in its federally funded hospice programs. Similar failures in oversight of Minnesota’s federally funded social service programs prompted a previous investigation by the Committee.
Read the letter to Governor Newsom here.
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