▶ Watch Video: CBS News exclusive: LA is “ground zero” for hospice fraud
At age 69, Lynn Ianni is a pickleball whiz, zipping from dinks to drives energetically. When she suffered an injury on the court two years ago, she sought physical therapy, and was surprised to learn her Medicare insurance wouldn’t cover it.
She was, according to Medicare records, dying and in hospice.
“They said, ‘you’re in hospice.’ And I said, ‘what? What are you talking about?” Ianni said. “‘Are you kidding me? Do I look like I’m in hospice?'”
Ianni’s Medicare number had been stolen, and used by a company to fraudulently enroll her in hospice – specialized, compassionate care for terminal patients nearing the end of their lives. It was another example of fraud in the hospice industry, long a nationwide problem. But her case arose well after officials had promised to stamp it out in California, where the problem has been especially acute.
Medicare is federally administered, and hospices must be certified for reimbursements. But the state issues the licenses for hospices to operate.
Three years ago, California’s state auditor sounded the alarm that Los Angeles County had seen a 1,500% increase in hospice companies since 2010 – more than six times the national average relative to its elderly population.
Auditors estimated LA County hospices overbilled Medicare by $105 million in a single year. The report called out notable red flags – key warning signs of fraud:
- Multiple hospices in one building
- Geographic clustering
- Low patient counts
- High rates of terminally ill patients later discharged alive
- Excessive billing
- Staff shared across multiple companies
The state says it proceeded to investigate and revoke the licenses of 280 hospices.
But since then, the problem has continued to fester. CBS News examined the business and financial records of every hospice currently operating in LA County, applying the same indicators identified by the state. Indications of fraud have not stopped. In fact, they’ve grown.
The CBS News analysis reveals that over 700 of the roughly 1,800 hospices in LA County, trigger multiple red flags for fraud as defined by the state.
California is confronting this problem as Gavin Newsom, its Democratic governor, eyes a potential presidential run. Fraud in public services has become a thorny political issue. Republicans and an army of social media influencers have seized on the issue as politically potent – accusing Democratic state executives of failing to prevent costly schemes, most notably in Minnesota, where the Feeding our Future pandemic relief scam cost taxpayers hundreds of millions. Minnesota’s Democratic governor, Tim Walz, announced in January that he would no longer seek reelection amid fallout from that scandal.
CBS News reached out to Governor Newsom’s office. A spokesperson sent us a January 2026 statement, which reads in part, “Under Governor Newsom’s administration, California has cracked down on hospice fraud, launched partnerships across state agencies, and the California Department of Justice has arrested criminals to hold them accountable.”
Hospice fraud is a nationwide problem. The U.S. Department of Health and Human Services Office of the Inspector General reported in 2023 that suspected hospice fraud amounts totaled an estimated $198.1 million.