Skip to content
Read • Question • ConnectAnthony’s notes & researchReturn with a new question
Anthony’s NotesA personal field guide
From the notebook

Medicare Medicaid fraud

California Hospice Licensure and Oversight

Research

  • There is broad agreement that California has a real and substantial hospice-fraud problem. Recent reporting does not treat this as a rumor or isolated scandal. Federal authorities announced arrests on April 2, 2026 tied to roughly $50 million in alleged health-care fraud in Southern California, with multiple cases centered on hospice operators accused of billing Medicare for patients who were not terminally ill.
  • The stories consistently point to Los Angeles County and Southern California as the epicenter. Coverage repeatedly describes an unusually dense concentration of hospice providers in and around Los Angeles, with signs that the number of operators far exceeded any plausible legitimate demand. The California State Auditor had already concluded in 2022 that Los Angeles County showed numerous indicators of large-scale hospice fraud and abuse.
  • The alleged schemes look similar across outlets. The common pattern is sham or low-quality hospices billing Medicare for ineligible patients, false terminal diagnoses, suspiciously high discharge-alive rates, shared addresses and staff across multiple agencies, kickbacks, and recycled ownership structures used to keep fraudulent entities operating.
  • A major consensus theme is that weak oversight helped the problem grow. The 2022 state audit said California’s public-health oversight failed to provide the level of monitoring needed to prevent fraud and abuse. Recent stories generally build on that finding rather than contradict it.
  • Another widely shared point is that this is not just about taxpayer loss; it can also hurt vulnerable patients. Stories about the scandal often emphasize that fraudulent or poor-quality hospices can place people into end-of-life care inappropriately or provide substandard care to genuinely dying patients. That human-cost angle is part of why the issue has received so much attention.
  • Where the reporting starts to diverge is on politics and blame. There is broad agreement that the fraud exists, but not agreement on who deserves most of the blame. Federal officials have used very aggressive rhetoric about California, while California officials argue the state has already been cracking down for years, including a 2021 moratorium on new hospice licenses and hundreds of revoked licenses or ongoing investigations.
  • There is also a strong divide over ethnic framing. Some recent political rhetoric linked the fraud to Armenians or “foreign actors,” but coverage of that rhetoric is highly critical and treats those claims as controversial. The reporting consensus is not that one ethnic community is “the” cause of the fraud; rather, the controversy is over whether officials racialized a real fraud problem.
  • So the clearest overall takeaway is this:
    • the fraud is real,
    • it appears heavily concentrated in Southern California, especially Los Angeles County,
    • it follows recurring patterns of Medicare abuse and sham-provider behavior,
    • oversight failures helped it spread,
    • and the biggest disagreement in the stories is not whether the problem exists, but how much is due to state failure versus federal politics, and whether some public messaging crossed into scapegoating.

Estimates on the Fraud

Yes. The main conclusion from the research is that Medicare and Medicaid fraud is widely believed to be very large, but nobody has a precise national count, because fraud is harder to measure than improper payments. Official sources usually publish improper payment estimates, and they repeatedly warn that improper payments are not the same thing as fraud: they also include billing mistakes, documentation errors, and payments made in the wrong amount.

  • Best official proxy: improper payment estimates.
    GAO reported that HHS estimated over $100 billion in combined improper payments in Medicare and Medicaid in FY 2023. GAO described that as 43% of all government-wide improper payments reported that year.
  • For FY 2024, Medicare Fee-for-Service alone was estimated at $31.7 billion in improper payments.
    CMS said the Medicare FFS improper payment rate was 7.66%, equal to about $31.70 billion in FY 2024.
  • Government-wide fraud estimates suggest the upper universe is enormous, but they are not Medicare/Medicaid-specific.
    GAO says the federal government as a whole loses an estimated $233 billion to $521 billion annually to fraud, based on fiscal years 2018–2022. That figure is for all federal programs, not just health care.
  • Private anti-fraud researchers often cite broader health-care fraud ranges.
    The National Health Care Anti-Fraud Association says a conservative estimate is about 3% of total health care spending, while some government and law-enforcement sources have placed it as high as 10%. NHCAA says that implies tens of billions of dollars annually, and potentially much more.
  • There is also research on specific program slices.
    CMS stated in 2025 that federal estimates suggest Medicare Advantage plans may overbill the government by about $17 billion annually, and CMS cited MedPAC as estimating it could be as high as $43 billion per year. That is not the same as proven fraud, but it is part of the broader literature on possible overpayments and abuse.
  • Medicaid measurement is especially difficult.
    GAO noted in 2025 that CMS’s Medicaid managed care estimate does not fully capture all program integrity risks, and separate audits from October 2021 to February 2025 identified over $33 million in overpayments in reviewed managed-care audits, with the federal share near $23 million. That shows why official annual estimates may understate the full problem.
    So the clean takeaway is:
  • Yes, there has been research.
  • Official research is strongest on “improper payments,” not pure fraud.
  • The official numbers already run into the tens of billions for Medicare and Medicaid.
  • Broader fraud estimates from watchdogs and anti-fraud groups suggest the real fraud burden could be much larger, but those figures are less precise and more model-based.
    A careful way to phrase it would be:

    “There is substantial research suggesting Medicare and Medicaid lose tens of billions of dollars a year to improper payments, and likely significant amounts to fraud, but the exact national fraud total is unknown because improper payments are easier to measure than intentional fraud.”

Here are copyable links to the main sources:

Medi-Cal

Misc/Documents/4c2ae8649bde69f1898a256c91ce1513_MD5.jpeg

Articles

8 arrests made in federal crackdown on alleged health care fraud in Southern California
https://www.justice.gov/usao-cdca/pr/8-arrested-health-care-fraud-takedown-including-owners-hospices-billed-taxpayers
Gavin Newsom’s Empire of Fraud