EXPOSÉ: The Van Nuys Hospice “Front” Investigation — How the Scheme Works, How Patients Get Harmed, and How to Protect Your Family
A federal investigation has put a harsh spotlight on hospice and home-care fraud in Los Angeles, after CMS Administrator Dr. Mehmet Oz posted a video exposing a dense cluster of hospices in Van Nuys Los Angeles hospice/home-care fraud totals about $3.5 billion. Oz alleged some of this activity is tied to organized criminal networks and “front” businesses.
This is not a theoretical issue. Hospice fraud can derail care in real time—because once hospice is elected, Medicare rules shift how services are covered for the terminal illness and related conditions.
What follows is a public-facing exposé and warning focused on patient protection, the fraud mechanics, and the enforcement trail—so families can recognize the playbook and avoid being trapped by deceptive enrollment.
1) What’s being exposed in Van Nuys
According to reporting, Oz’s video claims:
A four-block radius in Van Nuys contains “42 hospices”—presented as a red-flag concentration suggesting fraud.
Los Angeles hospice/home-care fraud totals roughly $3.5 billion.
Important: The fraud pattern is real, and patients are the ones who pay first—in lost time, interrupted treatment, and confusion during medical crisis.
2) What is already documented: real enforcement, real prosecutions, real license actions
The public record shows hospice fraud is actively being pursued:
California reports it has revoked more than 280 hospice licenses since its hospice provider ban/moratorium took effect, as part of an ongoing fraud fight.
DOJ has sentenced individuals for nearly $16 million in Medicare losses tied to sham hospice companies and money laundering in California.
HHS-OIG and DOJ have documented cases where physicians falsely certified patients as terminally ill to qualify them for hospice when they were not, enabling fraudulent billing.
California DOJ (AG) has also announced criminal outcomes against hospice operators for false claims billed to Medicare/Medi-Cal.
Translation: this fraud category is real, organized, and profitable—and it can scale quickly.
3) How the scheme works (the common “front” playbook)
Families usually imagine fraud as “bad billing.” Hospice schemes are often more aggressive: they aim to capture the patient first, then monetize the enrollment.
Step 1: Build “paper providers”
Operators set up multiple hospice entities, sometimes clustered geographically or sharing addresses—so they can bill, rotate names, and outlast scrutiny. The Van Nuys allegation is built around this exact “cluster” red flag.
Step 2: Recruit patients through confusion and pressure
Patients may be pitched “extra help at home,” “homecare,” or “palliative support,” without a clear explanation that what’s being signed is a hospice election—a major coverage decision. CMS emphasizes hospice requires a terminal prognosis certification and a signed election statement.
Step 3: Lock in eligibility paperwork (fraudulently)
This is the hinge point. Fraud cases have shown doctors falsely certifying terminal illness, which unlocks hospice billing.
Step 4: Bill Medicare—often for care not medically necessary or not provided
DOJ’s California hospice cases describe billing through sham hospice companies and laundering the proceeds.
Step 5: Churn entities; keep the pipeline moving
When heat rises, bad actors may dissolve, re-brand, and re-incorporate—while the patient and family are left trying to untangle what happened.
4) Why patients can be “denied care” after hospice enrollment
This is the part families must understand in plain terms:
To receive Medicare hospice, the patient must be certified terminally ill (generally 6 months or less if the illness runs its normal course).
When hospice is elected, the beneficiary waives Medicare payment for services related to the terminal illness and related conditions, because hospice is designed as comfort-focused care.
So if someone is enrolled deceptively or improperly, the system may treat them like they’ve chosen end-of-life care—and that can interrupt active treatment plans while families scramble to reverse it.
5) Warning signs: how to spot a trap before you sign
Treat these as non-negotiable red flags:
Unsolicited outreach (cold calls, walk-ins, “marketing reps”) pushing hospice.
Pressure language: “Just sign today,” “Everyone qualifies,” “It’s routine.”
No clear explanation of terminal prognosis and what hospice election changes.
Refusal to provide copies of: the election statement, the certification basis, and the attending physician details.
Anyone offering “referral rewards,” gifts, or side payments for enrollment (a classic kickback indicator).
6) If you already enrolled and suspect it was wrong: how to get out fast
You can revoke hospice
Federal regulation allows a beneficiary/representative to revoke hospice at any time during an election period, by filing a statement with the hospice.
CMS policy guidance and Medicare contractors emphasize revocation is a signed written statement, and there is no single required form.
What to do immediately
Submit written revocation (signed + dated + effective date).
Demand copies of everything: election statement, physician certification, plan of care, and all contacts who initiated enrollment.
Call the patient’s primary doctor/specialists and tell them: “Hospice was elected; we revoked; resume treatment pathway.”
7) Report it (so it stops happening to someone else)
Medicare fraud reporting: call 1-800-MEDICARE or use Medicare’s reporting tools.
HHS-OIG Hotline: file a complaint or call the hotline (official reporting channel for federal healthcare program fraud).
CMS fraud reporting resources / SMP help: CMS points patients to support such as the Senior Medicare Patrol (SMP).
References
Associated Press. (2026, January 30). Newsom files a civil rights complaint against Dr. Oz in latest feud with the Trump administration.
California Department of Justice, Office of the Attorney General. (2025, November 5). Attorney General Bonta secures felony sentencing of Inland Empire hospice operators.
Centers for Medicare & Medicaid Services. (2024, November 6). Hospice.
Centers for Medicare & Medicaid Services. (2024). Model example of hospice election statement (March 2024).
Centers for Medicare & Medicaid Services. (2020). Medicare Benefit Policy Manual, Chapter 9: Coverage of hospice services (CMS Publication 100-02).
eCFR. (n.d.). 42 CFR § 418.28 — Revoking the election of hospice care.
FOX 11 Los Angeles. (2026, January 30). Newsom, Dr. Oz feud intensifies over Armenian “mafia” hospice fraud.
Governor of California. (2026, January 27). In the four years since Governor Newsom’s new hospice provider ban took effect, California has revoked more than 280 licenses.
Medicare.gov. (n.d.). Reporting Medicare fraud & abuse.
NBC Los Angeles. (2026, January 29). Dr. Oz video alleging fraud in Van Nuys prompts response from Armenian community.
Office of Inspector General, U.S. Department of Health & Human Services. (n.d.). Report fraud (Hotline).
Office of Inspector General, U.S. Department of Health & Human Services. (2016, May 5). Two doctors convicted of falsely certifying patients as terminally ill as part of $8.8 million healthcare fraud scheme.
U.S. Department of Justice, Office of Public Affairs. (2025, November 18). Four California residents sentenced to prison in connection with $16M hospice fraud and money laundering.
