CMS Administrator Dr. Mehmet Oz has vowed to decertify up to 1,000 fraudulent hospice providers in California after investigations revealed criminal organizations are stealing billions from Medicare through ghost patients and identity theft schemes.
Story Highlights
- Over 700 of Los Angeles County’s 1,800 hospices show multiple fraud red flags, with estimated losses reaching $3.5 billion
- Dr. Oz pledges an aggressive federal crackdown to decertify roughly half of California’s suspect hospice providers
- Russian and Armenian organized crime rings recruit seniors at community centers, paying up to $3,000 per stolen Medicare number
- Fraudulent hospices bill Medicare $260 daily per “patient” while providing zero care, blocking seniors from accessing legitimate services
Federal Hammer Falls on Billion-Dollar Fraud Epidemic
Dr. Mehmet Oz toured Los Angeles County fraud hotspots in January 2026 alongside prosecutor Bill Essayli, witnessing firsthand the scale of hospice fraud plaguing California.
CMS implemented fraud-tactic checklists that trigger on-site visits, with Oz declaring that Medicare is “not open for business for fraudsters.” The administrator’s March interview with CBS confirmed plans to strip billing privileges from approximately 900 to 1,000 suspect hospices.
This represents the most aggressive federal response to healthcare fraud in recent memory, directly addressing taxpayer theft that has hemorrhaged billions from Medicare coffers while denying vulnerable seniors legitimate end-of-life care.
Organized Crime Masquerading as Compassionate Care
Russian and Armenian mafia networks transformed Los Angeles into America’s hospice fraud capital through sophisticated criminal enterprises.
Recruiters prowl senior centers, offering cash payments of $1,000 to $3,000 to elderly Americans in exchange for their Medicare numbers. Corrupt physicians then enroll healthy seniors into fake hospice programs, enabling criminals to bill Medicare $260 per day per beneficiary through upcoding and unbundling schemes.
Federal prosecutors previously indicted 73 defendants in the Mirzoyan-Terdjanian operation, which stole $100 million via phantom clinics. California Attorney General Rob Bonta labeled the situation an “epidemic,” yet hundreds of fraudulent operations persist despite the state revocation of 280 licenses.
๐๐ซ. ๐๐ณ ๐ฉ๐ฅ๐๐๐ ๐๐ฌ ๐ญ๐จ ๐ญ๐๐๐ค๐ฅ๐ ๐ก๐จ๐ฌ๐ฉ๐ข๐๐ ๐๐ซ๐๐ฎ๐: "๐๐จ ๐ง๐จ๐ญ ๐ฌ๐ญ๐๐๐ฅ ๐๐ซ๐จ๐ฆ ๐ญ๐ก๐ ๐๐ฆ๐๐ซ๐ข๐๐๐ง ๐ฉ๐๐จ๐ฉ๐ฅ๐": Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services (CMS), has pledged to combat hospice fraud, particularlyโฆ pic.twitter.com/IwBB48BfBp
— Ranked News (@RankedNews) March 14, 2026
Shocking Scale Reveals Government Failure
Los Angeles County alone accounts for 18 percent of national home health billing despite representing a fraction of the population, an impossibility under legitimate circumstances.
The county hosts approximately 1,800 hospice providers, a sevenfold increase over five years, with more than 700 displaying multiple state-defined fraud indicators, such as shared addresses and suspicious ownership patterns.
HHS Office of Inspector General data estimated $198.1 million in nationwide suspected fraud in 2023, though Los Angeles losses dwarf that figure. Dr. Oz characterized the situation as “crazy,” questioning how California allowed such blatant criminality to flourish.
This massive government failure enabled organized criminals to exploit the very system designed to provide dignified care for America’s most vulnerable citizens.
Victims Pay Double Price for Government Negligence
Seniors scammed into fraudulent hospice enrollments face devastating consequences beyond mere identity theft. Once criminals enroll a beneficiary in a fake hospice program, that Medicare number becomes “owned” by the fraudulent provider, blocking access to legitimate healthcare services when truly needed.
Auditors documented cases where elderly Americans requiring genuine end-of-life care discovered they were already enrolled in ghost hospices they’d never heard of, leaving them stranded without proper medical support.
Taxpayers simultaneously bear the $3.5 billion burden from Los Angeles County alone, representing fiscal mismanagement that fuels the very inflation and government waste frustrating American families. The fraud undermines Medicare’s solvency while enriching foreign criminal enterprises operating on American soil.
Federal-State Tensions Complicate Crackdown Efforts
Dr. Oz’s pledge to decertify suspect hospices exposed tensions between federal oversight and California’s enforcement efforts. While Governor Gavin Newsom’s office defended the state’s Hospice Fraud Task Force and claimed readiness to partner with CMS, Oz questioned California’s cooperation given the scale of the fraud.
The state imposed a new license moratorium and revoked 280 licenses, yet those actions barely dented the problem as criminal operators simply reconstituted under new names.
Federal CMS authority to decertify providers represents the decisive tool California lacked, directly cutting off fraudsters’ ability to bill Medicare.
Congressional lawmakers urged CMS to act following Oz’s visits, recognizing that state-level enforcement alone cannot stop organized crime networks from exploiting regulatory gaps between state licensing and federal reimbursement systems.
Sources:
Dr. Oz pledges to tackle hospice fraud: “Do not steal from the American people” – CBS News
‘Boots on the ground’: Dr. Oz, CMS leaders visit fraud-ridden states – Hospice News
Dr. Oz, CMS leaders visit home health fraud hot spots – Home Health Care News
