In recent times, the end-of-life care (hospice) industry in Los Angeles County has been embroiled in a fraud scandal, shocking the entire United States. With over 1,900 of such facilities just in one county, surpassing the total in 36 states across America, the federal and California funds involved are staggering. As early as 2022, a California audit report revealed that the state government was aware of rampant healthcare fraud, yet only a few criminals were penalized.
California Attorney General Rob Bonta told Fox News that hospice facilities have become an epidemic in California, particularly in the greater Los Angeles area.
Dr. Mehmet Oz, Director of the Centers for Medicare and Medicaid Services (CMS), stated in a video on X platform that during his visit to the Van Nuys community in Los Angeles, he discovered 42 hospice facilities within a few streets.
Oz’s findings corroborated the California State Auditor’s investigation report in 2022, which revealed officials discovered 210 hospice facilities within one square mile in the same community; a nondescript building housed 112 facilities.
The state report revealed that hospice facilities in California are mainly concentrated in Los Angeles and surrounding counties. In 2022, there were a total of 2,836 such facilities, including 1,841 in Los Angeles County, 220 in San Bernardino County, 189 in Orange County, 87 in San Diego County, 82 in Riverside County, and 80 in Ventura County.
Between January 2019 and August 2021, there was a drastic increase in the number of hospice facility license applications in California. The state health department received over 3,500 applications, with more than 2,600 from Los Angeles County, which raised suspicions.
In 2019, there were only 44 similar facilities in Florida, 43 in New York, while Los Angeles County had 818. On average, one facility in the county served only 1,600 seniors, whereas in Florida and New York, the average number of served individuals was 95,000 and 72,000, respectively. By 2021, the number of hospices in Los Angeles County had increased to 1,841.
An investigation was launched by the California Department of Health into the alarming number of hospice facilities in the Van Nuys community. At that time, some facilities had locked doors, unreachable phone lines, absent owners at scheduled meetings, and the health department failed to obtain patients’ medical and discharge records. Although the owners were eventually contacted, they claimed to have just acquired the facilities and had not yet submitted ownership changes.
The health department ultimately did not suspend or revoke any hospice facility’s license due to the lack of evidence of fraud. The department later wrote to the Attorney General’s Office indicating potential fraud falls under their jurisdiction; however, the AG’s office claimed no records of receiving such a letter.
The audit report also revealed that many hospice facilities in California were using identities of professional medical personnel without permission. Typically, a manager responsible for operating a hospice facility worked in a maximum of 2-3 facilities per week, but in Los Angeles County, 31 managers were concurrently employed in 6 or more facilities. Shockingly, one individual served as the head of 27 hospice facilities, and another as the medical director of over 30 facilities.
The report criticized the California Department of Health for not fully fulfilling its duties to prevent widespread fraud by hospice facilities. For instance, the department failed to create regulations prohibiting individuals from managing too many hospice facilities, continued issuing licenses to such individuals, inadequately verifying information submitted on applications, and inconsistently conducting supervision checks.
When issues were found in hospice facilities, the health department did not always correct them or reject applications from those found falsifying information. The report also highlighted that once a hospice facility’s qualifications were approved by the health department, they faced almost no monitoring, and complaints were not thoroughly investigated and resolved.
The report criticized California for lacking coordination in combating hospice facility fraud, such as in investigating and prosecuting fraud in the Medi-Cal hospice program. Between 2016 and 2021, although the AG’s office received 29 complaints forwarded by the health department, investigations were not carried out citing insufficient evidence.