We visited “ground zero” for hospice fraud: Los Angeles, California

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At age 69, Lynn Ianni is a pickleball whiz, zipping from dinks to drives energetically. When she suffered an injury on the court two years ago, she sought physical therapy, and was surprised to learn her Medicare insurance wouldn’t cover it.

She was, according to Medicare records, dying and in hospice.

“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?’”

Ianni’s Medicare number had been stolen, and used by a company to fraudulently enroll her in hospice – specialized, compassionate care for terminal patients nearing the end of their lives. It was another example of fraud in the hospice industry, long a nationwide problem. But her case arose well after officials had promised to stamp it out in California, where the problem has been especially acute.

Medicare is federally administered, and hospices must be certified for reimbursements. But the state issues the licenses for hospices to operate.

Three years ago,   California’s state auditor sounded the alarm   that Los Angeles County had seen a 1,500% increase in hospice companies since 2010 – more than six times the national average relative to its elderly population.

Auditors estimated LA County hospices overbilled Medicare by $105 million in a single year.   The report called out notable red flags   – key warning signs of fraud:

The state says it proceeded to investigate and revoke the licenses of 280 hospices.

But since then, the problem has continued to fester. CBS News examined the business and financial records of every hospice currently operating in LA County, applying the same indicators identified by the state. Indications of fraud have not stopped. In fact, they’ve grown.

The CBS News analysis reveals that over 700 of the roughly 1,800 hospices in LA County, trigger multiple red flags for fraud as defined by the state.

California is confronting this problem as Gavin Newsom, its Democratic governor, eyes a potential presidential run. Fraud in public services has become a thorny political issue. Republicans and an army of social media influencers have seized on the issue as politically potent – accusing Democratic state executives of failing to prevent costly schemes, most notably in Minnesota, where the Feeding our Future pandemic relief scam cost taxpayers hundreds of millions. Minnesota’s Democratic governor, Tim Walz, announced in January that he would no longer seek reelection amid fallout from that scandal.

CBS News reached out to Governor Newsom’s office. A spokesperson sent us a   January 2026 statement , which reads in part, “Under Governor Newsom’s administration, California has cracked down on hospice fraud, launched partnerships across state agencies, and the California Department of Justice has arrested criminals to hold them accountable.”

Hospice fraud is a nationwide problem. The U.S. Department of Health and Human Services Office of the Inspector General reported in 2023 that suspected hospice fraud amounts totaled an estimated $198.1 million.

But it is unclear if all of those companies are actually providing hospice care. The building owner's records indicate only 12 hospices active in the building — raising questions about what advocates call “ghost hospices.”

“I have a paragraph in my leases that they have to do legit business,” the owner told CBS News. “If there is a fraud, I would immediately terminate.”

Federal inspection records show regulators visited multiple suites in the Van Nuys building between 2021 and 2025 and found deficiencies. Nearly 40 companies in the CBS News analysis, for instance, share key personnel.

State auditors consider the overlap of administrators, medical directors or owners between multiple companies a potential red flag because “it raises questions about whether they are actually participating in the operations of any or all of those agencies.”

CBS News reached out to the 56 hospice offices whose state and federal data indicate they have five or more red flags. Many of the phone numbers were either disconnected or went straight to voicemail. One instructed the caller to text a different number, which turned out to be invalid. At several of the businesses, however, the representatives who answered the phones denied any fraud and told CBS News they run legitimate hospices that serve real patients. They objected to any allegation they are part of the fraud in the hospice industry.

“I am hardworking and have been all my life,” a representative of Mimas Hospice and Palliative Care said, noting his company recently passed a federal review of their work. “It’s so upsetting. You can talk to me by phone. You can come and meet me.”

Medicare is a taxpayer-funded program. Americans pay into it through taxes on their paychecks and premiums. When there’s Medicare fraud, it's tax dollars that are going to waste.

Nationwide, the average amount a hospice bills Medicare per patient is $13,200. CBS News found the typical hospice in LA County billed Medicare roughly $29,000 per patient – more than double the national average. The highest rate billed by a single hospice in the county was $74,000 per patient.

Of the LA County hospices with available Medicare data, nearly all of them submitted bills above the national average.

CBS News spotted seven instances in which hospices that reported an average of zero patients in 2024 still submitted bills to Medicare.

According to California’s state audit report, a concentration of hospice providers in a small area can be considered a warning sign for fraud: “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,” the auditors wrote in their 2022 report.

“Ground zero” for hospice fraud

Sheila Clark, a hospice patient advocate, said she considers Victory Boulevard to be ground zero for hospice fraud.

“You can't throw a rock without hitting [a] hospice,” Clark said, driving down the boulevard.

Data for one agency, VML, triggered all six state fraud indicators in CBS News’ review, while billing roughly $49,000 per patient, which is about three-and-a-half times the national average. It shares a building with other hospices, and its key personnel overlap with multiple companies.

When CBS News visited the office building where VML was located, it appeared no one was in. Mail could be seen piled at the door.