$170M Hospice Scam Uncovered—State Inaction Baffles

(LibertySociety.com) – Independent journalist Nick Shirley’s explosive investigation into California’s hospice fraud has exposed a massive $170 million taxpayer-funded scam while state officials remain suspiciously slow to act—raising urgent questions about regulatory failure and government accountability.

Story Highlights

Shirley documented 89 hospice companies operating from a single Los Angeles building, with 72 showing fraud indicators
Los Angeles County hosts 1,800 licensed hospice providers—six times the national average—amid a 1,000% spending surge
State officials revoked 280 licenses in two years, but 742 of 1,800 providers still show fraud red flags
Governor Newsom dismissed fraud investigations as “political cosplay” while quietly launching a multi-agency task force

Independent Investigation Exposes Massive Medicare Fraud Network

Nick Shirley released a 40-minute investigative video in March 2026 documenting widespread hospice and daycare fraud across California’s Medicare and Medicaid systems. The independent journalist visited dozens of registered hospice facilities in Los Angeles County, finding empty buildings, padlocked gates, and residential homes fraudulently registered as healthcare providers. Shirley’s team identified over $170 million in allegedly fraudulent billing, with Van Nuys emerging as a particularly concentrated fraud hotspot. The investigation builds on Shirley’s 2025 Minnesota daycare fraud exposé that gained viral attention and established his credibility as an investigative journalist willing to confront government waste.

California’s Hospice Industry Shows Alarming Concentration Patterns

Los Angeles County experienced a 1,000% surge in hospice care spending despite maintaining stable population levels, according to CBS News analysis. The county now hosts approximately 1,800 licensed hospice providers—roughly six times the national average—with hospice care accounting for 10% of all U.S. home healthcare expenditures. State auditors identified “clustering” as a major fraud indicator, with 89 companies registered to a single building on Van Nuys Boulevard. CBS News determined that 72 of these companies showed multiple signs of fraud, with almost 40 sharing key personnel. Federal regulators had visited these suspicious locations between 2021 and 2025, yet operations continued unabated.

Fraud Mechanics Exploit Systemic Regulatory Failures

Medicare hospice fraud operates through shell companies purchasing stolen Medicare beneficiary numbers on the dark web, then billing the government for services never provided. CBS journalist Andy Yamaguchi explained this mechanism allows fraudsters to collect taxpayer dollars while providing zero actual care to vulnerable hospice patients. State officials acknowledged that networks of individual perpetrators are “engaging in a large and organized effort to defraud the Medicare and Medi-Cal hospice programs,” placing the extremely vulnerable hospice patient population at risk. The Van Nuys neighborhood exemplifies this exploitation, with Shirley noting “there is home healthcare and hospice fraud literally everywhere” in that area. This represents a fundamental failure of federal and state oversight mechanisms designed to protect both taxpayers and patients.

Government Response Raises Questions About Political Priorities

Governor Newsom’s administration launched a multi-agency Hospice Fraud Task Force bringing together the California Department of Public Health, Department of Social Services, Department of Justice, and other agencies to coordinate enforcement. However, this response came only after Shirley’s investigation gained national media attention, despite federal regulators visiting suspicious locations as early as 2021. State officials had already revoked more than 280 hospice licenses in the previous two years, with 300 more providers under investigation. Yet CBS News analysis identified 742 of roughly 1,800 hospice companies showing multiple red flags for fraud—suggesting enforcement efforts barely scratch the surface of systemic corruption.

The political dimension became clear when Governor Newsom dismissed fraud investigations as “political cosplay” and racially charged profiling, even while his administration quietly implemented enforcement actions. This contradiction highlights a troubling pattern: government officials defending their regulatory competence publicly while acknowledging massive fraud privately. Taxpayers funding Medicare and Medicaid programs deserve straightforward accountability, not political deflection. The coordinated suspension of Medi-Cal payments, license revocations, and prosecutions announced by state officials represent necessary steps, but the scale of continuing fraud demands fundamental reform of oversight systems that allowed criminal networks to operate for years despite federal awareness.