A recent CBS News investigation reviewed business and financial records for every hospice operating in Los Angeles County – all roughly 1,800 of them. The findings were stark. More than 700 of those providers were still operating while triggering multiple fraud red flags defined by California state auditors. The analysis, led by CBS News correspondent Adam Yamaguchi, became the most detailed public accounting yet of what federal officials have come to call the nation’s most concentrated hotspot for Los Angeles hospice fraud and Medicare billing abuse.
Hospice care is the medical and comfort-based support given to people who are terminally ill – typically those with six months or less to live. Medicare, the federal health insurance program for Americans 65 and older and some people with disabilities, pays for this care. It uses a per-diem model, meaning providers receive a flat daily rate regardless of how many services they deliver on any given day. That structure is at the center of what investigators say has become a sprawling fraud problem. The program pays hospices a flat per diem rate for each day a patient is enrolled, regardless of services actually delivered – a structure the HHS Inspector General has said creates incentives to enroll patients who are not terminally ill while minimizing actual care.
For a fraud scheme to work in this space, operators don’t need to provide real care. They just need a name on a Medicare enrollment, a doctor’s signature, and a bill. That simplicity is part of why the problem has grown so quickly.
What the CBS News Analysis Found
Out of the roughly 1,800 hospices in LA County, CBS News found 742 that were still operating despite triggering multiple red flags for fraud. The red flags themselves came directly from a 2022 California State Auditor report that had already sounded the alarm years earlier. Auditors said warning signs for potential fraud included multiple hospices in one building, geographic clustering, low patient counts, high rates of terminally ill patients later discharged alive, excessive billing, and staff shared across multiple companies.
The billing numbers make the picture even clearer. Nationwide, the average amount a hospice bills Medicare per patient is $13,200. CBS News found the typical hospice in LA County billed Medicare roughly $29,000 per patient – more than double the national average. That gap is hard to explain through legitimate care delivery alone. High billing relative to other providers in the same region is one of the clearest early signals investigators use to flag potential hospice billing fraud.
The CBS News hospice investigation also found that LA County’s concentration of providers is itself extraordinary. Los Angeles County has experienced a 1,500 percent increase in its number of hospice agencies since 2010. In the absence of measures to assess the need for hospice services, the county has experienced significant growth of hospice agencies that is disproportionate to the estimated increase in its number of hospice patients and its demand for hospice services. That’s six times more hospice providers than the national average, relative to the county’s elderly population. A growth rate that far exceeds any possible increase in patient need is not a market responding to demand – it’s a financial opportunity being exploited.
Ground Zero: One Building, 89 Registered Hospices
One of the most striking examples of what investigators call “clustering” appeared at a single address in Van Nuys, California. The Merabi Professional Medical Plaza, a three-story, 32,000 square foot stucco and glass office building in Los Angeles, is home to a salon, a law office, a modeling agency, a realty corporation and, also, 89 licensed hospice companies.
Patient advocate Sheila Clark, who has worked to expose allegations of widespread Medicare hospice fraud in the hospice industry, calls this building “ground zero” for the issue. CBS News found that 72 of the 89 registered hospices in Merabi Plaza have at least three of those six potential warning signs.
Regulators had already taken notice well before the CBS News analysis. Federal records show regulators visited multiple suites in Merabi Plaza between 2021 and 2025. They found nearly 400 violations at 75 companies. One inspection cited a nurse who reported that a patient’s family was satisfied with care, despite indications that no one from the hospice ever visited that patient. Another inspection of a patient’s chart listed medications for malaria and diabetes. These weren’t minor paperwork errors. They were signs of fabricated care records – exactly what you’d expect from what investigators call “ghost hospices,” companies that exist on paper and collect Medicare payments without ever treating anyone.
Advocates say the discrepancy raises questions about what they call “ghost hospices” – paper companies that bill the government for patients, even if they don’t actually provide any real care.
What Are the Signs of Hospice Fraud?
The 2022 California State Auditor report defined six key warning signs that investigators now use to screen providers for LA County hospice fraud and potential Medicare billing abuse. These are the clearest answers to how to spot hospice fraud indicators in an active market.
The first is geographic clustering – large numbers of hospice offices registered to the same building or block. One company at an address is normal. Ten is suspicious. Eighty-nine is a major red flag. The second is low patient counts – a provider with very few patients relative to the number of staff or billing activity cannot sustain itself legitimately. The third is excessive billing per patient, as seen in LA County’s county-wide average of $29,000 per patient, compared to the national average of $13,200.
The fourth red flag is high live discharge rates – patients admitted to hospice as terminally ill who are later discharged alive. In 2022, the live discharge rate of Valley Pacific patients was more than 75%, vastly higher than the national average that year of approximately 17%. A legitimate hospice will occasionally discharge a patient whose condition has improved, but a rate approaching 75% or higher suggests that many enrollees were never terminally ill to begin with. The fifth warning sign is staff shared across multiple companies, which is a common way to make shell operations look legitimate on paper. The sixth is multiple providers registered at the same address, as dramatically illustrated by the Merabi Plaza building.
When several of these signs appear together at the same provider, the California State Auditor concluded that it constitutes strong evidence of organized fraud, not isolated billing errors. When CBS News attempted to reach 56 hospice offices whose state and federal data indicated that they showed five or more red flags for fraud, the reporters found that many phone numbers were disconnected or went straight to voicemail. Several others directed callers to invalid text numbers. Reporters visiting supposed hospice sites found empty offices and uncollected mail.
How Does Hospice Medicare Fraud Actually Work?
Understanding the mechanics helps explain why this problem has been so hard to stop. Common fraud patterns include paying recruiters $1,000 to $3,000 per Medicare beneficiary number, offering patients cash and gifts to enroll, billing for services never delivered, and cycling patients between affiliated hospices to evade audits.
In some of the most brazen cases uncovered in recent arrests, recruiters approached healthy people in public places and offered them monthly cash payments to sign up as hospice patients. One couple said they were each promised $300 per month to sign up for hospice care even though they did not need it, and they received unnecessary items such as nutritional shakes, nonprescription vitamins, and wheelchairs, while prosecutors said Medicare was billed for end-of-life care. The hospice company then collected the per-diem payment from Medicare for every day that person was listed as enrolled – often billing for services that were never actually delivered.
This is sometimes compounded by the use of forged or misappropriated physician credentials. The 2022 California State Auditor report stated that California hospice agencies “may be using stolen identities of medical professionals.” As of January 2022, license and certification records identified 31 administrators, each working with six or more hospice agencies, and of those 31, 28 were listed as working for hospice agencies in Los Angeles County.
For patients who are enrolled without their knowledge – a documented pattern described by California Health Advocates – the consequences can be serious. In so many cases of fraud, beneficiaries and their caregivers have no idea they’ve been enrolled in hospice until they go to get a prescription, or show up for a scheduled surgery or dialysis, only to be told they’re no longer covered. When a patient is enrolled in hospice, Medicare stops covering curative care for the underlying condition. A patient enrolled fraudulently can be blocked from surgeries, cancer treatment, or other care they actively need.
Which LA County Hospices Were Flagged for Fraud?
The CBS News analysis flagged hundreds of individual LA County hospices under fraud investigation by testing each provider against the six warning signs defined by the state auditor. The analysis did not name individual providers as fraudulent – it identified providers showing multiple warning signs simultaneously. Out of that group, 742 were still operating.
Beyond the aggregated data, federal law enforcement has moved against specific operators. The U.S. Department of Justice announced that eight people have been arrested and federally charged in connection with a health care and hospice fraud investigation. Acting U.S. Attorney Bill Essayli said that the eight defendants, including three nurses, a chiropractor, and a psychologist, are charged with defrauding the health care system out of more than $50 million. The individuals are accused of running fraudulent hospice care facilities that billed Medicare by using people without terminal illnesses as beneficiaries.
Among the most notable cases was a Glendale-based operation. Gladwin Gill, a psychologist, and his wife, Amelou Gill, a registered nurse, both of Covina, were arrested on a federal criminal complaint charging them with health care fraud. They owned and operated the Glendale-based 626 Hospice Inc., which did business as St. Francis Palliative Care. The Gills allegedly schemed to defraud Medicare by paying illegal kickbacks for the referral of patients who were not dying. The Gills also submitted more than $5.2 million in fraudulent claims to Medicare for hospice services that either were not medically necessary or were not provided. Medicare paid the Gills more than $4 million on these fraudulent claims.
Another arrested operator had already been convicted of hospice fraud. The fraud scheme also involved Nita Almuete Paddit Palma and her husband, Adolfo Catbagan. Both are charged with an 11-count indictment of operating at least three fraudulent hospice facilities that submitted at least $4.2 million in false claims. Palma is incarcerated in a federal prison, while Catbagan was arrested. Palma was previously sentenced to 108 months in federal prison for her involvement in an illegal kickback scheme involving two California-based hospice companies.
The operation targeting these defendants was named “Operation Never Say Die” by the U.S. Department of Justice. The operation targeted nine separate fraud investigations and resulted in eight arrests, with 15 defendants charged in total.
Concerned about what the fraud is doing to patients who genuinely need end-of-life care? The Hearty Soul has reported separately on what legitimate hospice care looks like and how families can evaluate their options – see End of Life Nurse Reveals the ‘Worst’ (and ‘Best’) Diseases to Die From.
The Doctor Whose Name Appeared on 126 Hospice Accounts
The second part of the CBS News hospice investigation focused on a single physician whose billing activity raised serious questions about the role doctors play in enabling or facilitating LA County hospice fraud.
A CBS News investigation found one Los Angeles County hospice physician’s name, Dr. Rajiv Bhuva, on Medicare claims for nearly 2,800 patients across 126 hospices in a single year. The total dollar amount tied to those claims was $71.7 million in 2024 alone. Dr. Rajiv Bhuva is linked to Medicare reimbursements for nearly 2,800 hospice patients across 126 providers in 2024 – about 20 times the state average – raising questions about oversight in the state’s rapidly expanding hospice sector.
CBS reporters said they wanted to find Dr. Bhuva to ask how he managed to work for so many different providers, so they followed a trail of hospice offices linked to his name and Medicare claims totaling $71 million in 2024 across the LA basin. On average in California, a hospice doctor cares for about 140 patients in a year. Bhuva’s figure was roughly 20 times that. In a brief interview at the front door of his home, Bhuva told CBS News he doubted the figures and said there was no statutory limit to the number of hospices any one physician can staff. After a short exchange, he declined to speak further. No charges have been filed against Dr. Bhuva.
The case highlights a structural gap: a single doctor’s name and credentials can be used across dozens of hospice enrollments, and nothing in the current Medicare system automatically flags that pattern as unusual. Fraudulent hospice billing practices are slowing growth among legitimate providers and impairing their ability to deliver quality care, according to Patrick Harrison, senior director of regulatory and compliance at the National Alliance for Care at Home.
The Scale of the Problem and the Government’s Response
The financial toll from Medicare hospice fraud extends well beyond LA County. The Department of Health and Human Services’ Office of the Inspector General reported in 2023 that suspected hospice fraud totaled an estimated $198.1 million. That figure covers the period from July 2021 through June 2022. Given the continued growth in the number of flagged operators since that time, current estimates are likely higher.
The House Committee on Oversight and Government Reform launched a formal investigation in March 2026. According to a March 29, 2022, report from the California State Auditor, Los Angeles County has seen a 1,500 percent increase in hospice providers since 2010, with providers overbilling Medicare by at least $105 million in a single year. Committee Chairman James Comer sent a letter to California Governor Gavin Newsom demanding documents related to the state’s oversight of federally funded hospice programs.
California’s response has emphasized its existing efforts. The state has revoked more than 280 hospice licenses in two years, and 300 providers are under investigation. In 2021, Governor Gavin Newsom signed legislation placing a moratorium on new hospice licenses – a policy that remains in effect today, preventing bad actors from entering the system while strengthening oversight of existing providers.
At the federal level, enforcement has accelerated. In April 2026, the FBI conducted raids across Southern California in an operation called “Operation Never Say Die,” charging 15 defendants in nine investigations alleging more than $50 million in fraudulent hospice billing. The HHS Office of Inspector General described the enforcement action as a coordinated takedown involving the FBI, the DOJ, IRS Criminal Investigation, and the FDA. HHS Inspector General T. March Bell said: “The defendants charged today allegedly turned hospice care into a cash-producing operation, resulting in more than $50 million in losses to taxpayers. Anyone who seeks to weaponize hospice care to bilk Medicare should expect to be held accountable.”
The LA County Board of Supervisors also voted in 2026 to strengthen local oversight. Supervisor Lindsey P. Horvath stated: “Fraud in home health and hospice care is not just a financial crime – it is a direct threat to the health and safety of some of our most vulnerable residents.”
California Attorney General Rob Bonta, whose office has brought criminal fraud cases against more than 100 defendants in the hospice industry, acknowledged the scale of the challenge. “We need to be responsive to the red flags and react to them, not just count them,” Bonta said. “Our main lane is the accountability side, the criminal investigations, the civil investigations. That’s after the damage is done though, unfortunately.”
Read More: End of Life Nurse Reveals the ‘Worst’ (and ‘Best’) Diseases to Die From
What This Means for You
If you or someone you love is approaching end-of-life care decisions, the scale of Los Angeles hospice fraud – and hundreds of LA County hospices under fraud investigation – is a direct reason to be more careful when choosing a provider. Most hospice companies are legitimate and provide compassionate, essential care. But the warning signs identified by California state auditors apply nationally, not just in Southern California, and any family evaluating a provider should ask direct questions.
Start by checking whether the provider is registered in your state and holds a valid Medicare certification. Ask who the attending physician is and how often they visit. Ask about the live discharge rate – a number substantially above the national average of roughly 17% is worth questioning. If a recruiter approaches you unsolicited, particularly in a public place, offering gifts or cash to enroll in hospice, that is a textbook fraud indicator. One of the most important things you can do is not share your personal information, including your Medicare number, social security number, and birthdate, with anyone you do not know. This includes unknown individuals calling, texting, approaching you on social media, appearing at your door, or soliciting you in a public setting like a grocery store.
If you suspect fraud, report it directly to the HHS Office of Inspector General at 1-800-HHS-TIPS (1-800-447-8477). You can also contact Medicare’s Senior Medicare Patrol program, which operates state-level resources to help beneficiaries detect and report abuse. If a family member is already enrolled in hospice and you have concerns about whether they genuinely qualify or whether care is actually being delivered, request written documentation of every visit and service. You are entitled to that record. Fraud in this space doesn’t just cost taxpayers – it can directly block a vulnerable person from getting the medical care they actually need.
Medical Disclaimer: This information is not intended to be a substitute for professional medical advice, diagnosis, or treatment and is for information only. Always seek the advice of your physician or another qualified health provider with any questions about your medical condition and/or current medication. Do not disregard professional medical advice or delay seeking advice because of something you have read here.
A.I. Disclaimer: This article was created with AI assistance and edited by a human for accuracy and clarity.
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