WASHINGTON — The House Oversight Committee has launched a federal investigation into what it describes as rampant hospice fraud in California, following revelations of a network of so-called 'ghost' hospices that have allegedly bilked Medicare out of more than $100 million. The probe, announced on Monday, targets the state's oversight of federally funded hospice programs amid concerns that vulnerable patients are being exploited and taxpayers are footing the bill for sham operations.
Committee Chair James Comer, a Republican from Kentucky, sent a pointed letter to California Governor Gavin Newsom demanding all documents and communications related to audits, oversight, and Medicare billing for hospice providers. According to the letter, recent reporting has uncovered 'alarming evidence of fraudulent activity,' including agencies overbilling Medicare and enrolling beneficiaries without their knowledge. Comer wrote that the state has a 'well-documented history of fraud in its hospice programs,' estimating that providers in Los Angeles County alone overbilled Medicare by at least $105 million in a single year.
The investigation stems from a New York Post exposé earlier this month, which detailed hundreds of suspect hospice and home health agencies across California. Many of these operations were registered to addresses that were either abandoned, nonexistent, or repurposed for unrelated businesses. For instance, St. Rita’s Home Health, which billed Medicare about $4.3 million between 2019 and the first half of 2025, was listed at a vacant strip mall in Van Nuys sporting a 'for rent' sign. Just six miles away in North Hollywood, a single building was purportedly home to 12 hospice and home health agencies, yet it too displayed a rental sign outside.
When the Post reached out to several companies tied to the North Hollywood address, responses were evasive. One representative hung up upon being asked to confirm the location, another claimed the agency had relocated despite remaining listed in the California Department of Public Health database, and a third voicemail belonged to 'Alexander from Southern California Auto.' Such discrepancies highlight the challenges in verifying the legitimacy of these providers, according to the Post's findings.
The committee's auditors have noted a staggering 1,500% increase in hospice registrations in California since 2010, leading to more than 2,800 providers statewide. This explosion in numbers has raised red flags, particularly in Los Angeles, where industry experts say the concentration of hospices defies logic. Dr. Mehmet Oz, recently appointed head of the Centers for Medicare & Medicaid Services, told the Post, “Thirty to 40% of all the hospices in America are in Los Angeles, so there’s just no way they are all legitimate.” Oz has since halted payments to suspicious operations in the city and placed every hospice in the state under scrutiny.
Whistleblowers and industry insiders have long described an 'epidemic of medical scams' centered in and around Los Angeles. One high-profile case involved an alleged fraudster who flaunted her $4 million home in Carmel-by-the-Sea to a news outlet just days before her arrest on charges of stealing $3.2 million from Medicare. These stories align with broader patterns of fraud that the Oversight Committee aims to dismantle through its probe.
Governor Newsom's office pushed back against the federal scrutiny, emphasizing actions taken under his administration to curb the problem. A spokesman for the governor stated that in 2021, Newsom signed legislation imposing a moratorium on new hospice licenses, a policy still in effect. “This work is delivering results, as more than 280 hospice licenses have been revoked over the past two years and an additional 300 providers are under investigation,” the spokesman said. The state, he added, is coordinating efforts to suspend Medi-Cal payments, revoke licenses, and pursue prosecutions.
California gubernatorial candidate Steve Hilton, a critic of Newsom, welcomed the congressional involvement. Hilton told the Post, “Until I’m governor next January, it’s only through federal investigation and enforcement that we can expect real accountability for Gavin Newsom, who falsely claims that he’s cleaned up hospice fraud in California.” Hilton's comments underscore the political tensions surrounding the issue, with Republicans on the Oversight Committee accusing the Democratic-led state of lax controls.
The committee expressed particular concern over the state's internal safeguards. In its letter to Newsom, it stated, “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. As a result, Americans across the country are paying for California’s rampant hospice fraud and vulnerable patients are being exploited.” Newsom has until April 6 to provide the requested records on anti-fraud practices, audits, and related matters.
While fraud allegations dominate the narrative, not all in the industry dismiss the sector outright. Kevin Tutunjian, founder of In the Arms of Grace Hospice and an experienced provider, acknowledged the existence of blatant scams but defended legitimate operators. “Blatant fraud is someone who just bills Medicare without the individual knowing. That is one thing,” Tutunjian said. “But there are organizations trying to do the right thing, but maybe they just are ill-equipped to deliver quality care for whatever reason.” His perspective highlights the divide between fraudulent actors and those striving to provide end-of-life care amid regulatory pressures.
The backdrop to this investigation includes California's unique role in the national hospice landscape. Hospice care, which supports terminally ill patients with comfort rather than curative treatment, has seen explosive growth nationwide since Medicare began covering it in 1982. In California, however, the surge has been especially pronounced, fueled by the state's large population and lucrative reimbursements. Federal data shows that Medicare spending on hospice services topped $22 billion in 2022, with California accounting for a significant share.
Previous federal efforts have targeted hospice fraud elsewhere, such as in Texas and Florida, where similar 'ghost' networks were uncovered. In those cases, authorities seized assets and imposed fines totaling hundreds of millions. The Oversight Committee's probe could follow suit, potentially leading to stricter federal guidelines for state licensing and billing oversight. For now, the focus remains on California, where the moratorium on new licenses has not stemmed the tide of investigations into existing providers.
Patient advocates have voiced alarm over the potential harm to those in need. Reports suggest that fraudulent enrollments can divert resources from legitimate care, leaving families in limbo during critical times. One whistleblower, speaking anonymously to the Post, described how scammers target low-income and immigrant communities, enrolling them without consent to maximize reimbursements. Such tactics, if confirmed, could prompt broader reforms in how Medicare verifies hospice eligibility.
As the April 6 deadline approaches, the investigation's outcome may hinge on the documents provided by Newsom's administration. The Oversight Committee has signaled its intent to hold hearings and possibly subpoena additional records if cooperation falls short. Meanwhile, Oz's CMS team continues its parallel review, aiming to claw back improper payments and safeguard the program's integrity.
The probe into California's hospice system arrives at a pivotal moment for federal-state relations on healthcare fraud. With billions at stake annually, the case exemplifies the challenges of policing a decentralized industry prone to exploitation. For residents of the Golden State and beyond, the coming months could bring accountability—or expose deeper systemic flaws in end-of-life care delivery.