Federal Inspectors Found $255,100,000 in Hospice Waste.
One County Alone Is Home to 1,800 of Them.
A June 2026 HHS Inspector General audit found Medicare could have saved $255,100,000 on hospice claims for new enrollees in a single fiscal year — nearly half of the 100 sampled certification periods lacked the paperwork required to prove patients actually qualified. The audit itself makes no fraud finding; it is a documentation review. But it landed in the middle of a hospice-fraud reckoning that has produced hundreds of millions of dollars in criminal charges, concentrated overwhelmingly in one place: Los Angeles County, California, which alone is home to roughly 1,800 state-licensed hospice agencies serving a population that public-health researchers say needs a small fraction of that number.
California has licensed more hospice agencies than any other state — over 2,800 statewide. That licensing framework, built up over decades and only tightened after the fraud became undeniable, is the infrastructure the fraud rings used.
Federal prosecutors and California's own attorney general are now running parallel — and at times publicly clashing — investigations into the same industry.
- $255,100,000 — Medicare could have saved on FY2021 hospice claims lacking proper eligibility or terminal-illness documentation · Source: HHS-OIG Report A-06-22-09003
- 45 of 100 — sampled hospice certification periods HHS-OIG found lacked required documentation
- $267,000,000 — the Medi-Cal hospice fraud ring California AG Rob Bonta (D) charged 21 people over in April 2026, using dark-web-purchased patient identities
- 2,800+ — hospice agencies licensed statewide in California — more than any other state — with roughly 1,800 concentrated in LA County alone · Source: CalMatters
- 12 years — the prison sentence for Petros Fichidzhyan, one of five defendants already convicted in a related $16-17 million sham-hospice scheme
HHS-OIG audited $580,500,000 in Medicare payments across 46,767 initial hospice certification periods for new FY2021 enrollees. Of a 100-claim sample, auditors found 21 certification periods lacked documentation proving the patient was actually terminally ill, and 24 more lacked proof of basic program eligibility — together accounting for $545,499 in confirmed improper sample payments, which OIG extrapolated to a projected $255,100,000in Medicare-wide potential savings. The report’s title captures the pattern plainly: hospice billing with no hospital, and often no verifiable illness, behind it.
The OIG audit is national, but the criminal casework is concentrated almost entirely in Southern California. In April 2026, federal prosecutors announced “Operation Never Say Die” — eight arrested, 15 charged in a roughly $50-60 million scheme. One defendant, Lolita Beronilla Minerd of Topanga Hospice Care in Artesia, billed Medicare $9,174,117; prosecutors say her hospice discharged 85 percent of patients alive rather than through death, nearly five times the national rate, and that some beneficiaries were paid roughly $300 a month to pose as hospice patients.
Days later, California Attorney General Rob Bonta (D) announced “Operation Skip Trace,” charging 21 people in a separate $267,000,000scheme that prosecutors say used identities purchased on the dark web to enroll fraudulent patients through Covered California, then billed Medi-Cal through 14 shell hospice companies that never provided a single legitimate service, according to Bonta’s office. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed,” Bonta said.
“Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed.”
California Attorney General Rob Bonta (D), announcing Operation Skip Trace, April 9, 2026
California has licensed more than 2,800 hospice agencies statewide — far more than states with comparable or larger populations. That regulatory posture predates the current fraud wave by years and has persisted through Gov. Gavin Newsom’s (D-CA) tenure. Newsom signed a law in 2021 banning new hospice licenses specifically to curb fraud; the state has since revoked more than 280 licenses and is reviewing 300 more. The 2021 fix came only after the licensing glut it was meant to close had already let the industry balloon to its current size.
CMS Administrator Dr. Mehmet Oz (Trump-administration appointee) has gone further, publicly alleging up to $3,500,000,000in LA County hospice and home-health fraud tied to what he called Russian and Armenian organized crime — a figure CMS itself later clarified was total billing activity, not confirmed fraud. Newsom filed a civil-rights complaint over Oz’s remarks, calling them “baseless and racially charged,” while Bonta has disputed the administration’s “epicenter” framing even as he acknowledged, in his own words, that “hospice fraud has become an epidemic in California.”
California cracked down on hospice fraud years ago — Governor Gavin Newsom signed a law BANNING all new hospice licenses in 2021 to curb fraud. What's Trump doing? ...Making it easier for scammers to steal taxpayer dollars!
Confirmed by conviction: five defendants sentenced in a $16-17 million sham-hospice scheme, including a 12-year term for Petros Fichidzhyan.
Charged, not convicted: 21 defendants in Operation Skip Trace ($267M); 15 in Operation Never Say Die ($50-60M).
Disputed: CMS's $3.5 billion “epicenter” figure, which CMS itself has since walked back as total billing, not proven fraud.
A federal audit found a quarter-billion dollars in unverified hospice claims nationally. The criminal cases that followed are concentrated almost entirely in the one state that licensed more hospices than it could ever oversee — and the governor who eventually moved to stop the bleeding is now fighting with the federal officials investigating what his own state's licensing framework allowed to happen.
