LOS ANGELES — False hospice enrollments are disrupting care for California Medicare beneficiaries as authorities intensify scrutiny of an industry investigators say has been vulnerable to abuse in Los Angeles County.
When Medicare records incorrectly show that a beneficiary has elected hospice, treatment tied to the supposed terminal illness can become subject to hospice payment rules, complicating coverage for care.
Linda Henry, a 71-year-old Southern California retiree, learned in September 2024 that Medicare records showed her enrolled in hospice with heart failure after an allergy-test claim was rejected, according to The Associated Press. Henry said she was generally healthy and had never knowingly elected hospice care. Medicare later recognized her as a fraud victim.
A 2022 State Auditor report found that the number of hospice agencies in Los Angeles County had risen about 1,500 percent since 2010. Auditors also identified dense provider clusters, lengthy stays, high rates of patients discharged alive and indications that medical professionals’ identities may have been used without authorization.
The auditor said those patterns raised concerns about organized efforts to improperly bill Medicare and Medi-Cal, including for patients who were not eligible for hospice or for services that may not have been provided.
California later imposed a moratorium on new hospice licenses and strengthened oversight. By March 2026, the governor’s office said more than 280 hospice licenses had been revoked over the previous two years and about 300 providers were under investigation. Emergency regulations effective June 22 added requirements for hospice administrators, medical directors and service areas.
In April, California prosecutors charged 21 defendants in an alleged scheme involving stolen identities and about $267 million in fraudulent Medi-Cal billing. The charges remain allegations unless proven in court.
On Aug. 27, Anaheim resident Lynn Galbraith pleaded guilty to health care fraud after admitting that a Garden Grove hospice caused more than $2.2 million in false Medicare claims involving beneficiaries who were not terminally ill or whose records did not establish hospice eligibility. Medicare paid about $2.14 million, federal prosecutors said.
CMS also imposed a six-month nationwide moratorium, effective May 13, on new Medicare enrollments for hospice and home-health agencies. The agency said about 800 Los Angeles-area providers suspected of fraud had been placed under payment suspension or related scrutiny.
CMS Administrator Mehmet Oz earlier referred to about $3.5 billion in Los Angeles hospice and home-health activity while discussing suspected fraud. CMS later clarified that the amount represented overall Medicare billing in those sectors and that not all had been determined improper.
