Van Nuys strip at center of alleged statewide hospice scam as auditors find $105 million in overbilling
State auditors estimate Los Angeles County hospices overbilled Medicare by about $105 million in 2019, with a dense cluster of suspicious providers centered on Van Nuys Boulevard prompting federal and state enforcement and ongoing criminal probes.
- State auditors estimate LA County hospices overbilled Medicare by $105 million in 2019.
- Investigations found nearly 500 hospice providers within three miles of Van Nuys Boulevard, with many red flags.
- A 2025 DOJ case tied $16 million in fraud and money laundering to sham hospice companies and led to prison sentences.
- Federal agencies and CMS have increased referrals and payment cuts to suspicious Los Angeles operations.
Van Nuys: ground zero for alleged hospice fraud
Investigators describe a short stretch of Van Nuys Boulevard that “looks unlike any other health-care corridor.” Within three miles, nearly 500 hospice organizations are listed, and 137 use addresses on Van Nuys Boulevard itself, with many locations showing physical and administrative red flags.
Regulators who inspected buildings on the boulevard found one building that listed 89 companies and noted nearly 40 that shared key personnel — a pattern investigators say can mask sham billing and paper operations.
“One can’t throw a rock without hitting a hospice,” said Sheila Clark, president and CEO of the California Hospice and Palliative Care Association, characterizing the dense cluster in Van Nuys.
Scope across Los Angeles County and California
Los Angeles County houses roughly 1,800 hospice programs; auditors found more than 700 providers triggered multiple state-defined fraud indicators and documented rapid growth in Medicare billing over recent years.
Statewide datasets reviewed by reporters identified hundreds of suspicious hospice and home-health addresses across California, including vacant offices, long-empty storefronts and locations investigators could not trace.
The national backdrop and common tactics
There are about 7,000 hospice programs in the U.S.; California alone lists roughly 2,800 — far more than other large states — creating opportunities for abuse, experts say. Federal and CMS enforcement efforts have increased as investigators document recurring tactics used in alleged schemes:
- Enrolling patients without their knowledge or without providing services;
- Billing for services not rendered or for higher levels of care than provided;
- Using straw owners and shell companies to hide true control;
- Listing the same address or staff across multiple provider names to create a deceptive paper trail.
A 2025 federal prosecution tied a $16 million fraud to sham hospice companies, straw owners, and money laundering; four people were sentenced to prison and courts ordered forfeitures including homes and $2.9 million.
Financial impact and enforcement actions
State auditors’ estimate that LA County hospices overbilled Medicare by roughly $105 million in 2019 has drawn scrutiny from Congress, state officials and federal agencies. HHS-OIG reported suspected hospice fraud totaling $198.1 million in FY2023, and CMS referred billions in suspicious billing cases in 2025.
CMS has taken the unusual step of cutting payments to suspicious Los Angeles operators and referred hundreds of cases to the Department of Justice, while launching projects to spot “license flipping” and other evasive tactics. CMS and DOJ actions have become more aggressive.
State efforts and gaps
California moved in 2022 to ban certain providers and has revoked more than 280 licenses since the ban took effect, and the state Department of Health Care Services has used payment holds and prosecutors in its Medi‑Cal Fraud and Elder Abuse unit.
Still, enforcement officials and experts say agencies have been overwhelmed by the scale and speed of suspicious operations. As Dr. Ira Byock warned, the volume of alleged fraud has “completely overwhelmed” the agencies that are supposed to police it, raising concern about patients who may have been denied proper care.
What investigators found when they visited offices
Reporters and regulators visiting listed hospice addresses often found empty suites, stacks of mail, or businesses that were open but not providing hospice services. In one Van Nuys office, a CBS correspondent saw mail piled at a door and no staff present; other addresses included an auto parts store and storefronts without signs of medical care. Those physical clues helped auditors and agents build cases that companies existed on paper to bill Medicare but not to serve patients.
Implications for San Diego, California
Economic impact: Medicare and Medi‑Cal dollars diverted by alleged hospice fraud reduce funds available for legitimate care. San Diego hospitals, clinics and home health agencies that follow rules may face tougher reimbursement reviews and higher administrative costs as oversight tightens.
Political consequences: County and state leaders in San Diego are likely to face pressure to protect seniors and public dollars, and the House committee focus on LA could spur statewide hearings, audits or legislation affecting provider enrollment and licensing. State licensing changes and bans may accelerate.
Social and cultural effects: Fraudulent operations that enroll patients without real services put vulnerable residents at risk and may erode trust in hospice care statewide, prompting local providers to increase outreach and transparency.
Practical advice for residents: Seniors, families and clinicians in San Diego should verify hospice credentials with DHCS and report suspicious billing or gaps in service. Providers expanding into hospice should expect tighter background checks and slower enrollment processes. State resources list licenses and enforcement actions.
Ongoing investigations and next steps
Federal agencies including the FBI, HHS‑OIG and the Department of Justice continue probes into hospice billing and ownership patterns. CMS continues to refer cases and has cut payments to suspicious operators in Los Angeles, and Congress has requested an FY2026 OIG report on enrollment and payment vulnerabilities.
Reporting for this story relied on public audits and reporting from multiple outlets and federal documents, including investigations by The California Post, CBS News, The Los Angeles Times, DOJ releases and federal oversight reports.
Sources
- CBS News — Hospice fraud project
- House Committee letter / Energy & Commerce
- Los Angeles Times — reporting on hospice fraud
- U.S. Department of Justice — press release on 16M hospice fraud
- HHS‑OIG enforcement notice
- Hospice News — CMS/DOJ enforcement coverage
- California Governor’s Office — provider ban and revocations
