This story was originally published by CalMatters. Sign up for their newsletters.
Walking down Victory Boulevard in Los Angeles, you can’t throw a rock without hitting a hospice provider. It’s not because there’s been a surge of patients in Los Angeles. It’s because scammers have realized that a Medicare identification number is more valuable than a stolen credit card.
Eight individuals were arrested recently in connection with $50 million in hospice and skilled home health care fraud in the greater Los Angeles County area. This issue isn’t new. California auditors previously found that hospices, including potentially illegitimate ones, overbilled Medicare by $105 million in a single year in this region.
When investigators and auditors show up at many of these newly licensed providers, they find vacant offices. They find dozens of hospices supposedly housed within one building. They find paper companies with no real clinical staff.
Now a temporary moratorium to prevent the spread of fraud will expire next year, while lawmakers finalize emergency licensing regulations to prevent the door to fraud from reopening.
By fraudulently enrolling seniors in hospice unknowingly or deceptively, scammers can bill Medicare and Medi-Cal, raking in tens of thousands of dollars for each patient.
But the issue goes much deeper. When patients are enrolled in hospice without their knowledge or consent, they are cut off from treatments that could have extended or improved their lives.
Scammers also disproportionately target elderly immigrants and communities of color in Los Angeles because language barriers and unfamiliarity with Medicare make them less likely to realize they’ve been fraudulently enrolled or less likely to report it.
The scale of this exploitation demands urgent action. The fraud harms seniors and taxpayers. It also harms the nurses, spiritual and bereavement counselors, aides, social workers, physicians, and all the individuals who provide high-quality hospice care for patients and their families when they need it most.
In 2022, California halted new hospice license applications because a high proportion of them showed signs of potential fraud. Of the 2,605 hospice license applications at that time, 93% were based in Los Angeles and Southern California, and 72% of applications were linked to shared addresses. One address in Los Angeles alone was associated with 191 different applications from supposed hospice providers.
California’s moratorium was the right call. It stopped thousands of potentially fraudulent providers from entering the market and gave the state time to develop emergency licensing regulations that link new hospice approvals with demonstrated community need. Those regulations would make it harder for bad actors to get licensed and bill Medicare, harder to hide behind complex ownership structures and harder to enroll vulnerable seniors in hospice care they neither need nor want.
The problem is, those emergency regulations still aren’t finalized, and the moratorium is set to expire. The emergency regulations are key measures to keep out any more scammers, help authorities properly root out fraud, and prevent the same type of abuse from continuing.
Fraud affects red states and blue states alike, and this issue has champions from both sides of the aisle. Gov. Gavin Newsom and the California Legislature must move quickly to finalize emergency licensing regulations so we don’t reopen the door to the same conditions that allowed this crisis to begin in the first place.
Anyone who has had a family member experience hospice deeply understands why protecting it is so important.
Hospice provides clarity, support, peace, and dignity in so many people’s final months, days, and moments. We can’t let scammers exploit this essential care and let seniors and their families suffer.
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