The House Committee on Oversight and Government Reform has launched an investigation into alleged fraud in California’s hospice programs.
In a March 23 letter to Gov. Gavin Newsom, Rep. James Comer — who chairs the committee — and other lawmakers requested documents and communications related to the state’s oversight of federally funded hospice programs. The inquiry questions whether California agencies have adequate safeguards to detect and prevent fraud.
Lawmakers cited reports of hospice providers overbilling Medicare and enrolling patients without their knowledge, raising concerns about both taxpayer spending and patient safety.
According to a 2022 report from the California State Auditor, Los Angeles County saw a 1,500% increase in hospice providers since 2010, with at least $105 million in Medicare overbilling in a single year. Federal officials have also estimated that hospice fraud in Los Angeles County alone could total $3.5 billion, accounting for a significant share of national hospice billing.
The committee said California officials have been aware of fraud risks for several years but questioned whether sufficient action has been taken. Multiple state agencies — including the departments of public health, social services and healthcare services — share responsibility for oversight.
Lawmakers also pointed to reports of weak licensing controls, including instances in which individuals based outside the U.S. were able to obtain hospice licenses. Other warning signs cited include providers sharing addresses, low patient volumes and patients listed as terminally ill later being discharged alive.
Gov. Newsom pushed back on the lawmakers’ claims, arguing that California has built comprehensive fraud enforcement efforts in recent years, including establishing a multi-agency hospice fraud task force and implementing a moratorium on new hospice licenses.
State officials said more than 280 hospice licenses have been revoked over the past two years, with about 300 additional providers under investigation. Authorities have also arrested 284 individuals tied to hospice-related fraud cases.
The state said its enforcement strategy includes enhanced interagency coordination, payment suspensions for suspected fraud, stronger licensing oversight and updated claims verification requirements to prevent improper billing.
Officials also emphasized that Medicare — where many fraud allegations have been cited — is a federally administered program overseen by CMS, while California oversees Medi-Cal, the state’s Medicaid program.
The House committee has requested records detailing California’s internal controls, enforcement actions and efforts to address fraud within its hospice system.
The investigation follows similar federal scrutiny of state-administered programs. Last month, CMS froze $259.5 million in federal Medicaid funding to Minnesota, citing unsupported or potentially fraudulent claims in the state’s program.
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