Los Angeles hospice fraud reaches billions as Medicare providers scam federal system with fake companies Medicare chief says fraudulent providers scam taxpayers with ghost patients and sham companies in scheme involving corrupt doctors
Ghost patients, sham companies, offshore owners and corrupt doctors. Auditors and prosecutors say hospice fraud in Los Angeles is off the charts, with providers scamming billions from taxpayers for patients that don't exist, poor care and no care.
"Hospice is crazy here," says Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services.
"You've got hospice that's grown seven-fold in the last five years. They represent about three and a half billion dollars of fraud, we believe, just in LA County."
Backing him up was California Attorney General Rob Bonta, who said last year, "Hospice fraud has become an epidemic in California, specifically in the greater Los Angeles area."
Bonta says fraudulent providers submit false claims for unnecessary services, and recruiters get kickbacks for signing up seniors, whether they're sick or not. Hospices also enroll patients who don't even know they've been scammed until they seek out medical care.
"As a hospice owner, I could sign up everybody in this room for hospice," an LA hospice owner told us.
A whistleblower told us there's no limit on the number of hospices an individual can own, and applicants can live abroad.
"It's all just paperwork. I could fill [an application] out in Kazakhstan if I want, and get a hospice license."
He explained how the scam works:
Recruiters go to shopping centers and senior centers to sign up patients, promising them walkers, a month's supply of nutritional drinks, cash and weekly visits in exchange for a Medicare number.
Recruiters then sell that "benny" or beneficiary's Medicare number to a provider for a $1,000 to $3,000 and receive a cut for every month the senior stays on their rolls.
Hospice enrollees are supposed to have a terminal illness or life expectancy of six months or less. But frequently hospice owners treat patients like trading cards, moving them from one provider to another if they stay too long, which raises a red flag with auditors.
In the U.S., more than 50% of hospice patients die within 18 days or less. In LA, the average length of stay is more than three months, and, in many hospices, patients never die, with court records showing hospices billing the federal government for 18 months and more.
In LA, a hospice is paid by the federal government $260 a day for each day a senior is under its care.
"A Medicare MIB number is more lucrative than a credit card," says Sheila Clark, president of the California Hospice and Palliative Care Association, referring to the 11 character code each Medicare recipient has that allows federal reimbursement. "They're human traffickers. They're trafficking beneficiaries in and out of hospices, home health."
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