One Building’s Shocking Hospice Scam

Wooden blocks spell SCAM on a rustic surface.

A single Los Angeles office building harbors 89 fraudulent hospice shell companies, exposing how California’s weak regulatory controls enable organized Medicare scams targeting vulnerable terminal patients.

Quick Take

CBS News investigation documents 89 hospice agencies registered to one Van Nuys building with empty offices, piled mail, and non-functioning phones
Approximately 742 of California’s 1,800 hospices show state-defined fraud indicators, yet remain actively operating
State regulators missed a January 1, 2026 deadline for emergency regulations despite a 2022 audit warning of organized fraud networks
Shell companies use stolen Medicare identification numbers to bill for services never provided to patients

Systematic Fraud Exposed at Single Address

CBS News journalists conducted an on-site investigation of a Van Nuys medical plaza and documented an extraordinary concentration of fraudulent activity. The building houses 89 registered hospice agencies, yet investigators found no signs of legitimate operations. Empty offices, accumulated mail, and disconnected telephone lines indicate ghost companies designed solely for billing purposes. This single address represents a microcosm of California’s broader hospice fraud epidemic.

The investigation reveals how shell companies exploit regulatory gaps to submit false Medicare claims. Fraudsters register multiple agencies at single locations, use stolen patient identification numbers, and bill government programs for services never rendered. Terminal patients seeking genuine end-of-life care face delayed access while criminals drain billions from federal healthcare programs designed to serve vulnerable populations.

Scale of Regulatory Failure Staggering

California’s hospice fraud problem extends far beyond one building. State data shows approximately 1,800 hospice agencies operate across Los Angeles County. Of these, roughly 742 display red flags meeting state-defined fraud indicators. Despite this alarming statistic, regulators have allowed these questionable operators to continue functioning. The sheer number of flagged agencies still active demonstrates systemic regulatory collapse.

A 2022 state audit warned of organized fraud networks specifically targeting Medicare and Medi-Cal programs in Los Angeles County. The audit criticized state administrators for inadequate investigations and approving licenses despite clear warning signs. From January 2015 through August 2021, the state received approximately 2,100 complaints, including 350 fraud allegations, yet continued granting licenses to suspicious operators.

Missed Deadlines Perpetuate Patient Exploitation

Republican Assemblywoman Alexandra Macedo conducted parallel investigations and discovered 197 hospice agencies registered to another Van Nuys address. She sent a letter to Governor Newsom demanding immediate action, citing the administration’s failure to implement promised emergency regulations by the January 1, 2026 deadline. This regulatory delay has allowed fraudsters additional months to victimize patients and defraud taxpayers.

"We visited an LA building with 89 registered hospices. Here's what we found." – CBS News #SmartNews https://t.co/zAIrhCYdq1

— Joe Honest Truth (@JoeHonestTruth) March 19, 2026

California Attorney General Rob Bonta acknowledged the enforcement gap, stating the need to “react to red flags, not just count them.” His comment reflects frustration that regulators identify fraud indicators yet fail to prevent harm before it occurs. The state has revoked over 280 hospice licenses and pursued criminal arrests through the Department of Justice, but these reactive measures come only after patients suffer and Medicare loses hundreds of millions in fraudulent claims.

Vulnerable Patients and Taxpayers Bear the Cost

Terminal patients and their families seeking legitimate hospice care face delayed access and compromised services as fraudulent operators flood the market. Legitimate hospice providers, particularly in rural areas, suffer reputational damage when patients encounter shell companies. Taxpayers fund Medicare and Medi-Cal programs designed to provide dignity and comfort during end-of-life care, yet criminals systematically steal these resources through ghost billing schemes.

The concentration of 89 agencies at a single address underscores how organized this fraud has become. These are not isolated bad actors but coordinated networks exploiting regulatory blindness. Without immediate enforcement of promised regulations, this pattern will continue spreading, potentially attracting organized crime networks and expanding fraud nationally. Conservative voters expect government to protect vulnerable populations and steward taxpayer dollars responsibly—this investigation reveals catastrophic failure on both fronts.