Medicare hospice has quietly become a $28 billion-a-year program, and a startling share of it flows through a stretch of the San Fernando Valley where one office plaza is the registered address of 89 different hospice companies. Here's how end-of-life care became the second great fraud bonanza of American healthcare.
If you want to see what a Medicare fraud bubble looks like in physical form, drive to a stucco-fronted office plaza in Van Nuys called the Merabi Professional Medical Plaza. State licensing records identify 89 separate hospice companies at that single three-story building — a number CBS News confirmed by visiting in person and finding not 89 actual offices, but mostly empty suites and a few clusters of unmarked doors. Federal regulators logged nearly 400 violations at 75 companies housed there between 2021 and 2025. The building owner now says only twelve hospice tenants remain.
That building isn't the worst of it. Drive a few miles in any direction and you'll find streets where hospices outnumber coffee shops. Assemblymember Alexandra Macedo has reported finding 197 hospices registered to one address in the same neighborhood. Within four blocks of one part of Van Nuys, the current CMS Administrator counted forty-two hospice licenses. The California State Auditor, in a March 2022 report that has been criminally underread, found 112 different licensed hospice agencies sharing a single physical address.
Hospice was supposed to be the small, mission-driven part of American medicine. It was created in 1982 as a Medicare benefit modeled on the British charity hospices: comfort care, in the home, for the last six months of a terminal illness. Nonprofits ran it. Volunteers staffed it. Today, half of all Americans who die in the United States die enrolled in hospice. The benefit costs Medicare $28.2 billion a year. About 80% of all hospices are now for-profit, and as Ava Kofman wrote in ProPublica's prize-winning "Endgame" series: "Easy money and a lack of regulation transformed a crusade to provide death with dignity into an industry rife with fraud and exploitation."
What follows is a tour of how it happened, where the dollars went, and what the federal government is finally trying to do about it.
The fraud here is not subtle. The mechanics fit on a napkin.
Medicare pays a hospice a flat daily per diem for every day a beneficiary is enrolled, regardless of whether anyone from the hospice actually shows up that day. The standard rate — "routine home care," which accounts for roughly 99% of hospice days — is about $225 a day for the first sixty days. A patient enrolled for a year generates roughly $82,000 in Medicare payment, whether the hospice provides daily nursing visits or twenty minutes a week.
To enroll a patient, all you need is a doctor willing to certify the patient as terminally ill with a prognosis of six months or less "if the disease runs its normal course." That phrase — "if the disease runs its normal course" — is doing more work than any other six words in Medicare statute. For diagnoses like dementia, congestive heart failure, or "failure to thrive," prognosis is inherently subjective. The certifying physician usually works for the hospice. There is no independent review. The patient can be recertified indefinitely — and if the patient stubbornly refuses to die, the hospice can simply discharge them as "no longer terminally ill" and recertify them again later.
"It's an open secret that hospice is one of the poster children for fraud and abuse in Medicare." — David Grabowski, Harvard health policy professor and MedPAC commissioner, in ProPublica's "Endgame," November 2022
The rest of the business model writes itself. Find the patients. Get them enrolled. Bill the per diem. Repeat. The OIG and DOJ have documented operators paying "patient brokers" up to $1,300 per patient per month in kickbacks. They've documented marketers going door-to-door in low-income housing, recruiting people in Skid Row, and offering homeless or unhoused individuals $300 a month in cash to sign up. They've documented a 29-year-old pregnant woman in Mississippi who learned she had been enrolled in hospice only when her doctor ordered a routine blood test, and a 69-year-old denied physical therapy after a pickleball injury because scammers had used her Medicare ID to enroll her in hospice without her knowledge.
And then there is the business of the licenses themselves. About 200 hospice companies are currently for sale on commercial business-listing sites. Asking prices typically run $300,000 to $500,000. Listings include phrases like "Never billed hospice license for sale!" and "Brand New Hospice — Ready to bill!" The reason a never-billed license has value is the "CHOW loophole" — the Change of Ownership procedure. Buying an existing hospice's CMS Certification Number is faster and looser than going through full Medicare enrollment as a new applicant. CMS only closed this gap for hospices in January 2024, with a "36-month rule" prohibiting transfer within three years of initial enrollment.
Medicare-certified hospices are not evenly distributed. They are wildly concentrated.
FraudGraph's copy of the CMS hospice provider file shows 2,155 Medicare-certified hospices currently operating in California — roughly twice as many as the second-place state (Texas, with 1,081), and more than the next eight states combined. California alone accounts for 31% of every Medicare-certified hospice in America. Two-thirds of those California hospices were certified after January 2019. More than half were certified after 2021.
Within California, the concentration is even tighter. Los Angeles County alone has more than 1,300 Medicare-certified hospices in FraudGraph's data — more than any state in the country except Texas. The two adjacent Inland Empire counties (Riverside and San Bernardino) add roughly another 225. Just across the border in Nevada, Clark County (Las Vegas and its suburbs) has 144 more, of which sixty-one were certified in 2023 or later — the exact pre-moratorium enrollment surge that prompted CMS to act. Maricopa County, Arizona (Phoenix) adds another 158. Together, these four metropolitan counties account for roughly 28% of every Medicare-certified hospice in the country, in geographic areas containing about 6% of the U.S. population.
The dollars follow the count. FraudGraph data shows that in 2023 alone, California Medicare hospice payments totaled $3.81 billion across 182,691 beneficiaries. The average California hospice patient generated roughly $20,900 in Medicare payment — about 48% above the national average of $14,110. The House Energy & Commerce Committee, citing CMS estimates, recently put the suspected hospice fraud in Los Angeles County alone at $3.5 billion. CMS itself has identified between 900 and 1,000 fraudulent hospices in LA County.
The buildings and addresses are public record. FraudGraph's snapshot of CMS data shows certified hospices clustered at addresses like:
| Address | City | CMS-certified hospices at address |
|---|---|---|
| 14545 Friar St | Van Nuys, CA 91411 | 7 |
| 2600 Foothill Blvd | La Crescenta, CA 91214 | 4 |
| 127 S Brand Blvd | Glendale, CA 91204 | 3 |
| 225 E Broadway | Glendale, CA 91205 | 3 |
| 401 N Brand Blvd | Glendale, CA 91203 | 3 |
| 4119 W Burbank Blvd | Burbank, CA 91505 | 3 |
| 18340 Ventura Blvd | Tarzana, CA 91356 | 3 |
| 12501 Chandler Blvd | Valley Village, CA 91607 | 3 |
The most affecting parts of the public record aren't the spreadsheets. They're the recruitment scripts.
Federal court filings in the House of Angels case describe a marketing operation that misappropriated the names of physicians (including two who were already deceased) to certify patients as terminally ill. In the Nita Palma case, a Glendale woman who had previously been excluded from Medicare for kickback convictions purchased three hospices through her daughter and husband, and — according to federal prosecutors — continued operating them while she was awaiting trial, eventually directing her husband to open three more hospices and submit another $4.8 million in fraudulent claims after she was already incarcerated.
Ava Kofman's reporting in ProPublica's "Endgame" captured the recruitment pitch in unguarded language. A former AseraCare recruiter described the search:
"We'd find run-down places where people were more on the poverty line. You're looking for uneducated people, if you will, because you're able to provide something to them and meet a need." — Former AseraCare hospice recruiter, quoted in ProPublica, November 2022
In April 2026, California Attorney General Rob Bonta announced charges against 21 people in "Operation Skip Trace," a $267 million Medi-Cal hospice scheme in which prosecutors say the operators bought stolen personal information off the dark web and used it to enroll non-California residents into California Medicaid hospice. Per the complaint, not a single legitimate hospice service was provided over the life of the scheme. Days earlier, a separate federal operation called "Operation Never Say Die" arrested eight people in Southern California, including the owners of a hospice (626 Hospice / St. Francis Palliative Care) where federal investigators alleged a five-year patient survival rate of 97% — in a program designed for people with six months left to live.
The shift from charity hospice to industrial hospice is documented in the financials. Twenty-five years ago, less than a third of U.S. hospices were for-profit. Today, around 80% are. Between 2019 and 2023, the for-profit count grew by roughly 1,400. The nonprofit count declined by about 100. Every net new hospice in America is a for-profit hospice.
The Cornell-led academic literature on private-equity-owned hospices reports that PE-owned hospices have the highest profit margins, the lowest spending on direct patient care, and significantly worse patient-experience scores than nonprofit and other for-profit hospices. Average length of stay also diverges sharply by ownership: nonprofit hospices average about 72 days per patient, while for-profit hospices average about 115 days. For dementia patients specifically, the gap widens to 187 days at for-profits versus 130 at nonprofits. Longer stays mean more per-diem days. More per-diem days mean more revenue.
The Department of Justice has been pursuing hospice fraud for years, but the pace and scale of cases through 2024–2026 represents something new. The headline cases below are all matters of public record — either guilty pleas, sentences, or settled allegations:
| Date | Case | Amount | Outcome |
|---|---|---|---|
| Apr 2026 | Operation Skip Trace (CA AG, LA County, 14 hospices) | $267M | 21 charged, 5 arrested |
| Apr 2026 | Operation Never Say Die (DOJ, So. Cal.) | $50M+ | 8 arrested incl. Palma re-arrest |
| Nov 2019 | Merida Group (Mesquias, McInnis et al., TX) | $150M | Owner: 20 yrs; CEO: 15 yrs |
| Oct 2025 | United Palliative & Hospice (Ogudo, Martinez, TX) | $110M | 43-count indictment |
| Aug 2024 | Shaklian / Chateau d'Lumina (LA, gold-bar laundering) | $54M | Pled guilty Jan 2026 |
| Apr 2024 | Akula / Canon Healthcare (New Orleans) | $42M | 20 yrs; jury conviction |
| Jul 2024 | Gentiva (formerly Kindred at Home) | $19.4M | FCA settlement, no admission |
| May 2025 | Fichidzhyan / House of Angels (Granada Hills) | $17M | 12 yrs; 4 co-defendants |
| Aug 2025 | Palma (Glendale, excluded re-offender) | $10.6M | 9 yrs; re-arrested Apr 2026 |
| Jun 2025 | Creative Hospice / Abdsharafat (Atlanta) | $9.2M | FCA settlement, no admission |
| Apr 2024 | Primero / Beltran (Las Vegas) | $7.1M | 33 mos each |
The pattern most visible from any single dataset is "hospices clustering in California." The pattern most visible only when you cross several federal datasets is something more useful: the same operators appearing across multiple federal programs, with the kind of frequency that distinguishes opportunistic fraud from systemic operations.
Hospice + PPP overlap. FraudGraph's PPP loan table shows that across CA, NV, AZ, and TX, businesses registered under NAICS code 621610 (Home Health Care Services, the parent category for hospice) received 12,049 PPP loans totaling $1.69 billion — roughly 96% of which was forgiven. That figure includes many legitimate operators. But it also includes specific entities now in federal hospice fraud cases: a defendant in a Southern California hospice prosecution, Gayk Akhsharumov, was charged with separately using a defunct hospice company (San Gabriel Hospice) to fraudulently obtain a COVID-19 PPP relief loan in April 2020. The hospice fraud and the PPP fraud were the same set of facts, processed by two different federal benefits programs.
The hospice + home health + DME + lab cluster. FinCEN's March 2026 healthcare-fraud advisory describes the modal sophisticated scheme as a multi-entity ring, with nominee/straw owners running a hospice, a home-health agency, a DME supplier, and a clinical lab simultaneously, billing Medicare and Medi-Cal across the stack. The Petros Fichidzhyan case ran hospice plus home health out of the same network. The Sophia Shaklian case ran hospice plus diagnostic testing out of the same network, including $6 million laundered through gold bars. The "Operation Gold Rush" DME ring referenced by FinCEN had ~$41 million flowing through schemed DME companies in the same way. The cross-program structure is the operating model, not the exception.
Excluded individuals resurfacing. FraudGraph's copy of the HHS-OIG List of Excluded Individuals/Entities (LEIE) shows the hospice-specific case: an entity called We Care Hospice Services LLC in Sherman Oaks was excluded in December 2010 under section 1128(b)(8) of the Social Security Act. The Nita Palma case is the more troubling pattern — an excluded individual operating through family members, then through three additional hospices opened during the period she was already incarcerated. The 36-month rule, the new hospice survey requirements, and the suspended Special Focus Program were all designed to stop this exact behavior. So far, none of them has.
The federal response is finally shifting from study to action, but the policy choices over the next twelve months will shape whether this becomes a genuine inflection point or another in a series of regulatory false starts.
First, watch the moratorium question. CMS has used its 42 CFR 424.570 enrollment-moratorium authority for home health agencies and DMEPOS suppliers, but never for hospices nationwide. The current regime is sub-regulatory: a "Provisional Period of Enhanced Oversight" (PPEO) imposed in California, Nevada, Arizona, and Texas in July 2023 and quietly extended to Georgia and Ohio. The Hospice CARE Act, reintroduced March 2026 by Senator Mark Warner and Representative Linda Sánchez, would legislate a five-year national moratorium with community-need exceptions. The state hospice associations are split: legitimate operators in underserved areas worry that a blanket freeze will harm patient access; everyone else seems to want it.
Second, watch the Special Focus Program restart and the HOPE assessment tool. CMS launched the SFP in December 2024, then suspended it in February 2025 to "further evaluate" the methodology after the initial cohort included 15 hospices with no condition-level deficiencies. The HOPE (Hospice Outcomes & Patient Evaluation) tool launches October 2025 and will give CMS standardized patient-level outcome data for the first time — the data that would make algorithmic outlier detection possible at scale.
Third, watch the qui tam pipeline. The Gentiva, Elara Caring, and Creative Hospice settlements were all resolutions of whistleblower lawsuits filed by former employees of for-profit hospice operators. The Department of Justice's $2.9 billion in FCA recoveries in FY 2024 included a substantial hospice contribution. California has revoked roughly 280 hospice licenses to date and reportedly has 300 more under investigation. The DOJ Healthcare Fraud Strike Force's June 2025 takedown charged 324 defendants and alleged $14.6 billion in fraud, with hospice cases featured prominently. The case pipeline is real.