The investigation was initiated by James Comer, Chairman of the Committee, following discoveries of “phantom” hospice facilities that billed the Medicare program despite having no actual operations.
“On paper” facilities
Investigation data shows many facilities registered at:- Vacant lots
- Inactive storefronts
- Non-existent addresses
Examples:
- A facility in Van Nuys recorded over $4 million in Medicare revenue despite the premises displaying a “for lease” sign.
- A building in North Hollywood registered up to 12 units but had no physical activity.
Congress demands records
The Committee requested the state government, led by Governor Gavin Newsom, to provide all records related to:- Auditing efforts
- Hospice program oversight
- Medicare billing activities
Notable figures
- Fraud in Los Angeles County alone: over $105 million in a single year.
- The number of hospice facilities has increased by 1,500% since 2010, leading to concerns about large-scale care center scams.
- Total providers statewide: over 2,800.
“Between 30% and 40% of all hospice facilities in the US are concentrated in Los Angeles; this makes no sense if everyone is operating according to regulations.”
Response from state government
Governor Newsom’s office stated:- A moratorium on new licenses has been in place since 2021.
- Over 280 licenses have been revoked within 2 years.
- Approximately 300 more facilities are currently under investigation.
Industry perspective
Some industry experts admit that fraud exists but argue that the entire system is not at fault. Many units face operational capacity challenges rather than intentional profiteering.
