Over 700 hospices in Los Angeles County have triggered multiple red flags for fraud as defined by the state of California, according to a CBS News analysis of business and financial records. Now Congress wants to know why Sacramento let it happen.
The Republican-led House Oversight Committee announced Monday that it is launching an investigation into alleged hospice fraud in California and sent a letter to Gov. Gavin Newsom demanding documents related to the state's oversight and internal controls for federally funded hospice programs. The letter covers records from January 1, 2019, to the present, with a production deadline of April 6.
CBS News examined the business and financial records of every hospice currently operating in Los Angeles County and cross-referenced them against warning signs that a 2022 state audit had identified as potential indicators of fraud. That analysis found that over 700 of roughly 1,800 hospices in the county triggered multiple red flags. Among those with available Medicare data, nearly all billed above the national average.
The billing gap is staggering. Nationwide, the average amount a hospice bills Medicare per patient is $13,200. In Los Angeles County, the average was about $29,000 per patient, more than double. One hospice billed $74,000 per patient.
The U.S. Department of Health and Human Services' Office of the Inspector General reported in 2023 that suspected hospice fraud nationwide totaled an estimated $198.1 million. House Republicans alleged that potentially tens of millions in taxpayer funds may have been lost in improper payments to Southern California companies alone.
The committee's letter, signed only by Republican members, cited a CBS News investigation and laid out the scope of what it called a systemic failure of state controls. The letter named four California agencies whose communications and documents it is seeking: 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 committee wrote bluntly about what it sees as the core problem.
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 continued with the bottom line for taxpayers across the country.
As a result, Americans across the country are paying for California's rampant hospice fraud and vulnerable patients are being exploited.
Medicare, the taxpayer-funded health care program for the elderly and disabled, covers hospice care for terminally ill patients. Although Medicare is federally administered, states are responsible for licensing the hospices that bill it. That structure places the oversight duty squarely on Sacramento, and the committee's letter makes clear that House Republicans believe the state has not met that duty.
A spokesperson for Newsom pushed back, claiming the governor acted years ago.
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.
The spokesperson added that Newsom created a multi-agency hospice fraud task force that has led to more than 280 revoked hospice licenses over the past two years and said an additional 300 providers are under investigation.
That moratorium has been extended through January 2027 after the state missed a deadline to implement new regulations. The question the committee is now asking is straightforward: if the moratorium started in 2021 and over 700 hospices in one county still trigger fraud red flags, what exactly has the oversight accomplished?
CBS News asked Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, whether the congressional effort is politically motivated against Newsom.
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 also sent a separate letter to Florida Gov. Ron DeSantis requesting documentation related to Medicaid fraud concerns in that state. In a statement on Florida, Oz said taxpayers and vulnerable patients "deserve better" and called on state leadership to "step up and work with us to stop it." The dual approach undercuts any argument that this is a single-party exercise in targeting.
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, dismissed the probe as theater.
Many voters are bombarded constantly with these political football games from Republicans.
She added that "the cost of living continues to go up" and that voters "are not seeing any sort of relief from either party at this moment." That framing sidesteps the actual substance of the investigation entirely. The question is not whether voters are frustrated about grocery prices. The question is whether California allowed hundreds of hospice companies to bill Medicare at double the national average while terminally ill patients were allegedly enrolled without their knowledge.
The Oversight Committee has set April 6 as the deadline for Newsom to produce records. The committee has the authority to investigate, and it has recently launched probes into fraud allegations in other states, including Minnesota. Investigators will need to determine how many of the 700-plus flagged hospices are still operating, whether the state's task force acted on those same red flags, and what the governor's office knew about the scale of the problem before Congress stepped in.
When a single county has 1,800 hospices, the average bill per patient runs more than double the national rate, and the state's own audit flagged the warning signs four years ago, the only real question is why it took a congressional letter to force accountability.
