$267M Hospice Scam Busted

California Attorney General Rob Bonta announced charges against 21 suspects in a massive hospice fraud scheme that stole approximately $267 million from the state’s Medi-Cal system. The case, uncovered in coordination with the California Department of Health Care Services, led to the dismantling of a network that billed for hospice care that was never provided.

Authorities say the scheme involved stolen personal identities purchased on the dark web, which were used to enroll non-California residents into Medi-Cal through Covered California. Fraudsters then took control of 14 hospice companies through “straw owners” and submitted false claims for services that were never delivered.

Operation “Skip Trace” resulted in arrests, searches at multiple Southern California locations, and the seizure of more than $757,000 in cash, along with firearms. Prosecutors filed charges, including conspiracy to commit health care fraud, money laundering, identity theft, and additional white-collar crime enhancements.

State officials emphasized that no legitimate hospice services were ever provided under the scheme, calling it a deliberate effort that drained taxpayer resources and undermined trust in programs serving vulnerable patients.

The investigation was triggered by irregularities flagged by health officials, leading to swift action to halt payments and suspend fraudulent providers. California officials say enforcement efforts have intensified in recent years, with hundreds of investigations and dozens of convictions tied to hospice fraud.

Officials also urged the public to remain alert to warning signs of hospice fraud, including lack of actual care, unclear diagnoses, offers of incentives to enroll, and billing for services not received. Patients and families are encouraged to verify providers, consult physicians, and report suspicious activity.

Suspected fraud can be reported online, by phone at (800) 722-0432, or by mail to the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse.