House Republicans announced Monday that Congress will mount an investigation into “rampant hospice fraud,” alleging that potentially tens of millions in taxpayer funds may have been lost in improper payments to Southern California companies.
The Republican-led House Oversight Committee, which has the authority to investigate, has sent a letter to California’s Democratic governor, Gavin Newsom, asking for documents related to the state’s “oversight and internal controls to detect and prevent fraud for its federally funded hospice programs.”
“Recent reporting has revealed alarming evidence of fraudulent activity in California’s hospice programs, including agencies overbilling Medicare and fraudulently enrolling beneficiaries without their knowledge,” committee members wrote, citing a recent CBS News investigation.
The CBS News report examined business and financial records of every hospice currently operating in Los Angeles County, looking for the warning signs that a 2022 state audit identified as potential indicators of fraud.
The CBS News analysis revealed that over 700 of the roughly 1,800 hospices in LA County triggered multiple red flags for fraud as defined by the state.
“The Committee is concerned your administration does not have sufficient internal controls to prevent and detect fraud and is not conducting proper oversight of these hospice programs,” the letter to Newsom states. “As a result, Americans across the country are paying for California’s rampant hospice fraud and vulnerable patients are being exploited.”
A spokesperson for Newsom wrote in a statement: “California took decisive action on hospice fraud years ago. In 2021, Governor Gavin Newsom signed legislation placing a moratorium on new hospice licenses — a policy that remains in effect today, preventing bad actors from entering the system while strengthening oversight of existing providers.”
Democrats said a move by the Republican-controlled Congress to investigate may represent an attempt to divert attention from other pressing challenges.
“Many voters are bombarded constantly with these political football games from Republicans,” said Debbie Mucarsel-Powell, a former Democratic member of Congress from Florida who now serves as executive director of George Washington University’s Graduate School of Political Management.
“The reality is that for most Americans, the cost of living continues to go up, and they’re not seeing any sort of relief from either party at this moment.” she said.
Republican elected officials and an army of social media influencers have seized on the issue of fraud as politically potent — accusing Democratic state executives of failing to prevent costly schemes, most notably in Minnesota — where the Feeding Our Future pandemic relief scam cost taxpayers hundreds of millions. Minnesota’s Democratic governor, Tim Walz, announced in January that he would no longer seek reelection amid fallout from that scandal.
The partisan nature of the California probe was evidenced on the signature line of the House committee’s letter — it is signed only by Republican members.
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Hospice fraud remains a nationwide problem. Medicare is a taxpayer-funded health care program for the elderly and disabled that includes coverage of hospice care for terminally ill patients. Americans pay into Medicare through taxes on their paychecks and premiums. When there’s Medicare fraud, it’s tax dollars that are being stolen.
The U.S. Department of Health and Human Services’ Office of the Inspector General reported in 2023 that suspected hospice fraud totaled an estimated $198.1 million. It has been an acute issue in Southern California.
Nationwide, the average amount a hospice bills Medicare per patient is $13,200. CBS News found the typical hospice in LA County billed Medicare roughly $29,000 per patient — more than double the national average. The highest rate billed by a single hospice in the county was $74,000 per patient.
Of the LA County hospices with available Medicare data, CBS News found nearly all of them submitted bills above the national average.
The congressional letter seeks documents and communications between the governor’s office and several state agencies, including the Department of Health Care Services, the Department of Public Health, the Department of Social Services and the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse. The letter requests information from Jan. 1, 2019 to today, with a deadline of April 6.
Though Medicare is federally administered, the state licenses hospices to be able to operate. A moratorium on issuing new hospice licenses in the state was recently extended through January 2027, because the state missed its deadline to enact new emergency regulations for hospices. Public health officials told CBS News they are balancing public feedback to vet new applicants and hold hospices accountable.
A spokesperson for Newsom pointed out the governor established a multi-agency hospice fraud task force. “This work is delivering results, as more than 280 hospice licenses have been revoked over the past two years and an additional 300 providers are under investigation. The state continues to take coordinated action to suspend Medi-Cal payments, revoke licenses, and pursue prosecutions,” she said.
CBS News asked Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, if the effort is intended to target Newsom because of his political ambitions.
“Governor Newsom is not a target. Governor Newsom is the governor of the state of California, where there is an epidemic of fraud that should be addressed and that he has known about for several years,” Oz responded.
The Republican-led committee is charged with launching investigations into matters of high public interest. It most recently announced a probe into the allegations of fraud in Minnesota’s social service programs. The committee also led an investigation into the private business dealings of the Biden family.
Oz recently also sent a letter to Florida’s Republican governor, Ron DeSantis, asking for documentation related to efforts to stamp out Medicaid fraud that Oz characterized as “out of control.”
“Florida has been a hotspot for health care fraud for years. Taxpayers and vulnerable patients deserve better—and it’s time for state leadership to step up and work with us to stop it,” he added.
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Read the letter
