House Committee Launches California Hospice Fraud Investigation

WASHINGTON—House Republicans have launched an investigation into what it calls “taxpayer fraud” in California’s hospice programs.  

In a letter to California Gov. Gavin Newsom, Rep. James Comer, who is chair of the House Committee on Oversight and Government Reform, and other lawmakers said that the Newsom administration has been aware of state audit reports of hospice fraud for several years but has failed to prevent or detect it. The committee said it is now requesting documents and communications regarding California’s oversight and internal controls to detect and prevent fraud for its federally funded hospice programs.

They cited estimates from the Centers for Medicare and Medicaid Services (CMS) that Los Angeles County alone represents $3.5 billion in hospice fraud, and that 18% of all hospice billing in the United States comes from that single county.

“Recent reporting has revealed alarming evidence of fraudulent activity in California’s hospice programs, including agencies overbilling Medicare and fraudulently enrolling beneficiaries without their knowledge,” lawmakers said in the letter. “In California, your administration’s Departments of Public Health, Social Services and Health Care Services all have a role in overseeing federally funded hospice programs. 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,” they continued, “Americans across the country are paying for California’s rampant hospice fraud and vulnerable patients are being exploited.”

The committee said its investigation into Minnesota’s federally funded social service programs exposed widespread failures by state agencies to conduct oversight and prevent fraud, with similar patterns it said are now appearing in California’s hospice programs. 

The National Alliance for Care at Home (the Alliance) said that Congress and CMS should pursue enforcement strategies “to eliminate bad actors” but must be cautious not to harm patients or legitimate providers. 

“The Alliance continues to urge Congress and CMS to pursue enforcement strategies rooted in risk-based oversight—identifying and removing fraudulent entities without disrupting the legitimate providers delivering high-quality care in the home,” the group said in a news release responding to a hearing held last week by the committee (before the letter was sent to Gov. Newsom).