Dr. Mehmet Oz stunned audiences by revealing 42 hospices crammed into a single four-block radius in Los Angeles, exposing a brazen Medicare scam draining billions from dying Americans.
Story Snapshot
- CMS Administrator Dr. Oz spotlights 42 hospices in one LA neighborhood, signaling massive fraud by foreign gangs.
- LA County bills $3.5 billion yearly for hospice care, 18% of U.S. total, despite mismatched death rates.
- Federal probe targets 100 doctors enrolling 100,000 non-terminal patients, dwarfing other scandals.
- California AG Rob Bonta sues feds over funding, denying fraud evidence amid escalating tensions.
Dr. Oz Unveils Hospice Hotspot in Los Angeles
CMS Administrator Dr. Mehmet Oz stood at a January 9-10, 2026, press conference in Los Angeles. He pinpointed one neighborhood housing approximately 42 hospices within four blocks. This clustering exemplifies widespread fraud. Russian and Armenian gangs allegedly operate these facilities. They enroll non-terminal patients to siphon Medicare funds. Oz described fraudsters calling healthy people, claiming they face imminent death. This tactic diverts billions from legitimate end-of-life care.
Hospice Fraud Roots Trace to License Flipping
California hospice fraud exploded post-2010s through Medicare incentives. Owners practiced license flipping, selling new licenses before scrutiny hit. LA County witnessed a sevenfold billing surge unmatched by death rates. Sham providers targeted immigrant-heavy areas since 2020. Patients enrolled unknowingly lost access to regular treatments. LA Times exposés from pre-2020 revealed bogus operations, prompting state investigations.
Federal Oversight Targets Oversaturated Markets
CMS launched Provisional Period of Enhanced Oversight in 2023 for new hospices in California, Arizona, Nevada, and Texas. By late 2025, regulators revoked billing privileges for 122 of 668 reviewed facilities. DOJ, CMS, and FBI now audit programs and doctors jointly. First Assistant U.S. Attorney Bill Essayli labeled Los Angeles a fraud hotbed. He pledged coordination with local law enforcement to dismantle networks.
Stakeholders Clash Over Fraud Scale
Oz and Essayli champion taxpayer protection and program integrity. They frame the scheme as organized crime exceeding Minnesota’s 2025 benefits fraud. California AG Rob Bonta sued the Trump administration on January 8, 2026, over frozen child care funds. Bonta dismissed federal claims, insisting no evidence supports widespread fraud. This pits federal enforcers against state Democrats accusing political weaponization.
Ongoing Probes Promise Accountability
As of January 12, 2026, CMS and DOJ escalated aggressive investigations in LA. They assembled teams without naming targets yet. Oz met local law enforcement post-conference. Audits continue on California doctors and programs. Findings head to state officials soon. CMS expanded prepayment reviews in hotspot states to curb oversaturation.
Impacts Hit Patients, Taxpayers, and Politics
Short-term effects include billing denials and service halts for fraudulent hospices. Long-term, stricter rules cut fraud but threaten legitimate patient access. Around 100,000 elderly unknowingly enrolled suffer disrupted care. Taxpayers stand to recoup over $3.5 billion. LA communities endure stigma from immigrant-linked narratives. Politically, fed-state battles intensify, aligning federal action with conservative priorities on fiscal responsibility and law enforcement.
Sources:
US Department of Justice, Dr. Oz targeting California alleged medical fraud
Dr. Oz healthcare fraud crackdown
CMS Administrator reports even more health care fraud in California
CMS, DOJ aggressively cracking down on hospice fraud
