The House Oversight Committee has opened a formal investigation into what it calls "rampant" Medicare hospice fraud across California, sending a letter to Governor Gavin Newsom demanding documents and communications related to the state's oversight of its sprawling hospice industry. The committee has set an April 6 deadline for the records.
At the center of the probe: an estimated $105 million in alleged overbilling by Los Angeles County hospice providers in a single year, a network of so-called "ghost" hospices that exist on paper but deliver little or no care, and a system that has ballooned by 1,500% since 2010 with more than 2,800 providers now operating statewide.
The committee's letter to Newsom did not mince words:
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.
The numbers alone tell the story. Dr. Mehmet Oz, head of the Centers for Medicare & Medicaid Services, put it bluntly:
Thirty to 40% of all the hospices in America are in Los Angeles, so there's just no way they are all legitimate.
Consider what that means. One county in one state has absorbed roughly a third of the nation's hospice providers. Not because Los Angeles has a uniquely aging population or a uniquely compassionate care culture, but because the incentive structure has turned end-of-life care into a billing bonanza.
The investigation has already surfaced specific examples of the rot. One North Hollywood building alone houses 12 hospice and home health agencies. A single operation, St. Rita's Home Health, billed Medicare approximately $4.3 million between 2019 and the first half of 2025. One alleged fraudster reportedly owns a $4 million home in Carmel-by-the-Sea while allegedly stealing $3.2 million from Medicare.
These aren't rounding errors in an otherwise functional system. They are symptoms of a program that lost structural integrity years ago.
A spokesman for Governor Newsom pointed to the state's response, noting that in 2021 Newsom signed legislation placing a moratorium on new hospice licenses, the New York Post reported. The spokesman said the policy "remains in effect today, preventing bad actors from entering the system while strengthening oversight of existing providers." He added that more than 280 hospice licenses have been revoked over the past two years and an additional 300 providers are under investigation.
On paper, that sounds like action. But the Oversight Committee clearly isn't buying it. The committee's letter frames California's internal controls as fundamentally inadequate:
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. As a result, Americans across the country are paying for California's rampant hospice fraud and vulnerable patients are being exploited.
That last line matters. This isn't just a California problem. Medicare is a federal program funded by taxpayers in all 50 states. Every fraudulent dollar billed to a ghost hospice in Van Nuys comes out of the same pool that funds legitimate care for seniors in Ohio, Georgia, and Montana. The committee estimates the total taxpayer cost exceeds $100 million.
A moratorium on new licenses doesn't address the thousands of providers already in the system. It locks the door after the building is already full. And the 280 revocations, while not nothing, look modest against a landscape of 2,800 providers, a 1,500% growth rate, and an apparent concentration of the entire national hospice industry in a single metro area.
CMS under Dr. Oz has already moved to cut off payments to suspicious hospice operations and has placed all hospices in the state under investigation. That is the kind of broad, aggressive posture the situation demands. When a third of the country's hospice providers are clustered in one county and the fraud estimates run into nine figures, surgical precision is a luxury. You audit everything.
California gubernatorial candidate Steve Hilton framed the dynamic clearly:
Until I'm governor next January, it's only through federal investigation and enforcement that we can expect real accountability for Gavin Newsom, who falsely claims that he's cleaned up hospice fraud in California.
It is a striking indictment of Sacramento's credibility that federal intervention is the only plausible path to accountability. California had years to police its own hospice industry. It watched registrations explode fifteen-fold and somehow failed to notice that the math didn't add up.
There is a real cost beyond the fiscal one. Kevin Tutunjian, founder of In the Arms of Grace Hospice, acknowledged the fraud problem but also pointed to a more complicated reality:
Blatant fraud is someone who just bills Medicare without the individual knowing. That is one thing.
He added that some organizations are "trying to do the right thing, but maybe they just are ill-equipped to deliver quality care for whatever reason." That distinction matters. The operators running ghost hospices out of a shared office building in North Hollywood are not the same as small providers struggling with compliance. But the former makes life harder for the latter. When fraud is this pervasive, every legitimate operator falls under suspicion. Every audit, every delayed payment, every revoked license carries collateral damage.
That is what unchecked fraud does. It doesn't just steal from taxpayers. It poisons the ecosystem for everyone, including the vulnerable patients who actually need hospice care and the providers who genuinely deliver it.
California has a particular talent for building massive government-adjacent systems, watching them spiral into dysfunction, claiming credit for modest reforms, and then acting surprised when federal investigators show up. The hospice crisis fits the template perfectly. Explosive growth in a lightly supervised, publicly funded sector. Billions flowing with minimal verification. A belated moratorium presented as decisive action. And through it all, a governor's office insisting the situation is under control while the committee receipts say otherwise.
The Oversight Committee has given Newsom until April 6 to produce records. What those documents reveal will determine whether this investigation escalates further. But the core question is already answered. A system that allowed 30 to 40 percent of the nation's hospices to concentrate in a single county while billing taxpayers over $105 million in fraudulent claims was not a system with adequate oversight. It was a system without a pulse.
The patients enrolled without their knowledge deserved better. The taxpayers footing the bill deserve answers.
