If you ever needed a case study in how government money attracts shady operators like a porch light attracts moths, Los Angeles County just handed it to you. A bombshell investigation from CBS News pulled back the curtain on what looks less like a healthcare system and more like a hospice gold rush funded by Medicare.
Start with the numbers, because they are almost comically absurd. A state audit back in 2021 found that hospice companies in Los Angeles County increased by 1,500 percent since 2010. That is not a typo. Adjusted for the elderly population, that growth rate is more than six times the national average. Fast forward to 2026 and the county now has about 1,800 licensed hospices.
Apparently everyone in Los Angeles suddenly decided to get into the hospice business.
CBS News dug deeper and discovered that 742 of those companies, about 42 percent, show multiple warning signs that state regulators associate with fraud. We are talking about suspicious clustering of facilities, tiny patient counts, unusually high rates of discharging patients who are still alive, aggressive Medicare billing, and staff members magically working at several hospices at once.
Nearly 500 hospices are packed into a three mile radius in one part of the county. Along Van Nuys Boulevard alone there are 137. More than half of the businesses in that area wave red flags when examined closely.
State auditors did not mince words. They explained the problem pretty clearly in a 2022 report: “Large clusters of providers in one location suggest that the supply of providers may exceed the patient needs in that location. The providers may actually be billing for services to patients not located in the area or who are not eligible for hospice services.”
Translation, if there are more hospice offices than dying patients, something fishy is probably going on.
The billing numbers only make the situation look worse. The average hospice in Los Angeles County bills Medicare about $29,000 per patient. Nationally the average is $13,200. Some facilities are billing up to $74,000. Seven hospices somehow reported zero patients in 2024 but still billed Medicare anyway.
That is a neat trick if you can pull it off.
Nationwide hospice fraud totaled $198.1 million in 2023 according to the Department of Health and Human Services Office of the Inspector General. Los Angeles County alone managed to rack up $105 million in overbilling in just one year during the 2021 audit. Federal estimates now suggest the fraud tied to hospice and home care in the county could hit $3.5 billion annually.
And the schemes are not just creative, they are disturbing. Some operators enroll people in hospice care without their knowledge. Others steal Medicare numbers and bill for services that never happened. Being falsely enrolled in hospice can even block patients from receiving legitimate medical treatments.
Just ask Lynn Ianni, a 69 year old who discovered someone had signed her up for hospice care. Her reaction was pretty reasonable. “They said, ‘you’re in hospice.’ And I said, ‘what? What are you talking about?’ Ianni said. ‘Are you kidding me? Do I look like I’m in hospice?’”
The staffing situation looks just as ridiculous. CBS found 75 individuals claiming to work at five or more hospices. One medical director reportedly worked at 45. Unless this guy has discovered how to clone himself, something is not adding up.
Federal officials are finally starting to take notice. CMS Administrator Dr. Mehmet Oz highlighted a four block stretch of Los Angeles containing 42 hospice providers. His explanation was blunt. “In this four-block area in Los Angeles, there are 42 hospices. So, either there are a lot of people dying here, or you’ve got fraudulent activity that is so good that everyone wants to get in on it. What we have learned is there is roughly $3.5 billion of fraud taking place here in Los Angeles in hospice and home care. It’s run, quite a bit of it, by the Russian-Armenian mafia,” he said.
Authorities have prosecuted a few cases, including a $16 million scheme involving sham hospices and a $54 million fraud case tied to radiology and hospice billing. Considering the scale of the suspected fraud, that barely scratches the surface.
When billions of taxpayer dollars are floating around with weak oversight, someone will try to grab them. Los Angeles seems to have turned it into an industry.