House Republicans begin investigation into 'widespread fraud' at California hospices

Republicans in the House of Representatives announced Monday the launch of an investigation into what they describe asa case of "widespread fraud" in the California, especially in the southern part of the state.

The inquiries stem from an effort by the House Oversight Committee, which sent a letter to Democratic Gov. Gavin Newsom to request documentation on the mechanisms for oversight, monitoring and preventing irregularities in federally funded hospice programs.

According to the Republican-led committee, there are serious indications that improper payments may have occurred, causing the loss of tens of millions of taxpayer dollars. In their letter, the lawmakers, all Republicans,argue that recent reports show troubling signs of overbilling to Medicare and fraudulent enrollment of beneficiaries without their consent. That allegation is supported by a recent CBS News investigation into hospice operations in Los Angeles County.

The CBS News investigation, published two weeks ago, reviewed financial and business records of all active hospices in that county, finding that more than 700 of Los Angeles' nearly 1,800 hospices accumulated multiple indicators of potential fraud according to red flag criteria established in 2022 by a state audit.

Also, the media outlet detected that the amounts billed to Medicare per patient in that area were well above the national average. While nationally the average is around $13,200 per patient, in Los Angeles the typical figure was closer to $29,000 and, in specific cases, up to $74,000 per patient.

The Republican committee suggested in its missive that the Newsom Administration may not have implemented sufficient controls to detect and curb these maneuvers.

As such, the Oversight committee requested all exchanges and documents between the governor's office and various state agencies—including those responsible for public health, social services, health care and Medi-Cal-linked fraud prosecution—between Jan. 1, 2019, and the present, setting an April 6 deadline for response.

However, in comments to CBS News,the governor's California rejected the idea of inaction in the face of potential fraud. A Newsom spokesman maintained that the California state took action years ago, including a moratorium on new hospice licenses signed in 2021, which is still in effect.

In addition, the office remarked that a task force was created to combat fraud and that, in the past two years, more than 280 licenses were revoked, while another 300 providers remain under investigation.